There are systems in place to collect info from the Swiss: Is Dhaka approaching this right?

Bangladeshis' deposits in Swiss banks hitting a record Tk8,265 crore in 2021 is old news. Now the 'disagreement' between the foreign minister and the Swiss ambassador to Bangladesh over whether information about these accounts has been sought from the Swiss is the main topic of discussion.

"We told the government how to get information [from us about the Bangladeshi money stashed in Swiss banks], but we were not asked to provide any," Swiss Ambassador Nathalie Chuard said last week. "We are committed to maintaining international standards. Such information sharing is possible and must be done with the consent of both parties."

A day later, "She [Swiss ambassador] lied," Bangladesh Foreign Minister Abdul Momen responded. "The governor of Bangladesh Bank and finance secretary had previously informed us that they sought information from the Swiss bank but the bank authorities did not respond."

This Sunday, the Bangladesh Financial Intelligence Unit submitted a report to the High Court that Dhaka asked for information about the money deposits of 67 Bangladeshis from various banks in Switzerland, but the Swiss Financial Intelligence Unit provided information on only one person.

Meanwhile, Foreign Secretary Masud Bin Momen, in a comment to a local media on Tuesday, said that talks have started in Dhaka and Bern between the two countries to increase cooperation in the exchange of information about money kept by Bangladeshis in Swiss banks. "The Swiss ambassador may have had little idea about the whole technical matter. We are discussing how the misunderstanding can be reduced. We don't want to let it grow," he added.

All these contradictory statements and pieces of information have certainly created a lot of confusion. It is possible that one or both parties are not being honest, but it is possible that there is a misunderstanding between the two sides. No one really knows at this point. But what we know for sure from the experience of other countries dealing with Switzerland is that such information is indeed accessible.

Take, for example, India. New Delhi received the third set of Swiss bank details under automatic exchange of information (AEOI) framework last year.

According to the Federal Tax Administration (FTA) of Switzerland, in 2021, the exchange of information under this framework involved more than 10 countries, including Pakistan, Azerbaijan, Dominica, Lebanon, Samoa and Qatar, etc.

Under the framework, Switzerland has so far shared more than 33 lakh financial accounts with 70 countries. But they did however refuse to provide information to 26 countries, either because they do not yet meet the international requirements on confidentiality and data security, or because they chose not to take the information.

What is AEOI?

The Swiss banks have been practising the AEOI since 2017. It is an international standard practice that "governs how tax authorities amongst participating countries exchange data relating to taxpayers' cash and custody accounts."

It means that a signatory country of AEOI – that include OECD, G20 members and over 100 countries in total – can access information from Switzerland if asked for.

Dhaka is not a member of OECD, which would have automatically included Bangladesh into the AEOI. Economist Ahsan H Mansur told The Business Standard that there is an issue with GDP per capita of Bangladesh being too low to join the group.

However, there is this Common Reporting Standard (CRS) set up by OECD that allows for the automatic exchange of financial information between jurisdictions on an annual basis. Bangladesh is not a part of that either.

Why? Because we didn't become a member of the Convention on Mutual Administrative Assistance in Tax Matters jointly set by the OECD and the Council of Europe, which is regarded as "the most comprehensive multilateral instrument available for all forms of tax co-operation to tackle tax evasion and avoidance."

Now, India and Pakistan are also not OECD members. India is a G20 member state and hence an auto inclusion within the AEOI.

But how does Pakistan or Maldives, countries who are not a part of it, receive the information?

According to the OECD information brief, these are countries that "do not host a financial centre and were not asked to commit to a specific date to exchange information, but have done so voluntarily."

Pakistan had further become a signatory to the Convention on Mutual Administrative Assistance in Tax Matters in 2016, and adopted the global Standard for Automatic Exchange of Financial Account Information in Tax Matters, commonly known as the Common Reporting Standard (CRS).

There are over 20 countries in the AEOI that became a part of it voluntarily. Azerbaijan and Pakistan are two of the countries that received information from Switzerland in 2021 as part of the framework.

Bangladesh's name being absent in such platforms is in fact unusual for a country fighting money laundering.

However, the country is a member of the Egmont Group, an international organization that facilitates cooperation and intelligence sharing between national financial intelligence units to investigate and prevent money laundering and terrorist financing.

Are we utilising the existing platforms properly?

Bangladesh is a member of at least one international platform that can get information.

Besides, "one sovereign country can ask for information from another country," former BB governor Salehuddin Ahmed told The Business Standard.

"But this has to be in proper form. The application should have been done with proper knowledge of the application process. Just sending a letter doesn't work," he added.

Ahsan H Mansur said, "We have to write for specific information and clarify the reasons behind such requests. You cannot ask just in general: give us all the information you have.

"You have to be specific, that you are suspecting someone of laundering money or there are allegations against him or her, so give us information if this person has an account in your banks."

About the other unexplored platforms, he said, "We could become a member of the AEOI. There are international forums like this that we can use for our purpose. But we are not doing it… After Switzerland opened up banking information under US pressure, many countries are utilising this. India took advantage of this very well. But we don't use this."

He added that Bangladesh could have sufficient information with the existing memberships the country has (through Egmont Group for example), but "whose information are we asking for? Are we asking for information at all? It is a legal issue in developed countries, while it is a political decision in our country."

We also reached out to Bangladesh Bank Spokesperson Serajul Islam on why Bangladesh doesn't join groups like AEOI and he said, "I am not aware of what conditionality is required to become a member of AEOI. We have to learn from them."

"The membership we have at present, we are collecting information through that. They are sharing information with 147 countries through this (Egmont Group)."

Salehuddin Ahmed said, "The BFIU must know of such groups… about what other groups and platforms can we get information through. I think the BFIU should be a little more careful and serious about this."

The Business Standard reached out to the Swiss embassy in Dhaka to know what exactly is the process of applying for information regarding the wealth held by Bangladeshis in Swiss banks and if the government has made any such requests. No response came till the filing of this article.

Masum Billah. TBS Sketch