Attac Jersey is a Member of the International Tax Justice Network. We are Members of the Association for the Taxation of financial Transactions for the Benefit of Citizens, (ATTAC) and the Tax Justice Network, (TJN). The aims of both organisations are to research, educate and campaign to further public awareness. We are seeking to alleviate poverty through the creation of just taxation systems to fund social goods.

Tuesday, March 29, 2011

TAX INFORMATION EXCHANGE AGREEMENT - INDIA
MONEY TRAIL NEGOTIATIONS

FROM:   Tony the Prof     tonymusings.blogspot.com
This question, asked today in the States, makes it clear that it was the wording and clauses of the original TIEA that were the problem, but it doesn't give away much of substance!

WRITTEN QUESTION TO THE CHIEF MINISTER BY DEPUTY R.G. LE HÉRISSIER OF ST. SAVIOUR
ANSWER TO BE TABLED ON TUESDAY 29th MARCH 2011

Question
What were the precise reasons given by the Government of India for not signing the Tax Information Exchange Agreement?

Answer

The issues that prevented the signing of a Tax Information Exchange Agreement (TIEA) with the Government of India in New Delhi on the 18th March 2011 arose from differences discovered between the TIEA we had negotiated and those that India had recently signed with other jurisdictions.

Because of the need for the representatives of the Indian Ministry of Finance and the Jersey delegation to clear points of detail with other relevant parties there was insufficient time available to resolve the issues concerned before the Treasury and Resources Minister had to leave New Delhi. We expect the issues to be resolved in early course. The TIEA will then be able to be signed and in due course it will be presented to the States for ratification. Only when the TIEA has been ratified by both parties will it come into force.

But what triggered this upset, after months of careful planning? This story in Monday's JEP gives a clue:

INDIA has asked for Jersey's help in an investigation into bribes allegedly paid to the country's former telecom minister for granting 2G mobile phone licences. The former minister Andimuthu Raja has been under investigation for some time, but the fact the Jersey authorities had been asked to help became public last week during proceedings in India's Supreme Court. And the news happened to coincide with a visit to Delhi by a senior delegation from the Island seeking to secure a tax information exchange agreement with the Indian government. (1)
The Financial Times also notes that:

Charges are to be brought against India's former telecoms minister and two companies suspected of corruption by the end of March, the country's investigating authorities have told the Supreme Court.

The Central Bureau of Investigation said on Wednesday that it was preparing charges against Andimuthu Raja, the former minister, for his alleged role in a corruption scandal that an official audit claimed had lost the national exchequer an estimated $39bn in revenues in the auction.

In a submission to the court, which is overseeing the investigation, the CBI said as many as 31 companies had been summoned for questioning, with 26 already having been examined. It also said that its investigation had sought information from overseas, including the financial centres of Singapore, Cyprus, Jersey and the Virgin Islands, and that it had raided the offices of 'hawala' money transfer operators

and the Hindu, another newspaper, reports that:

The Enforcement Directorate on Tuesday informed the Supreme Court that the money trail of the 2G spectrum allocation transactions was traced to six countries, and their links to foreign bank accounts were established

Letters Rogatory were sent to Singapore, Cyprus, Jersey, the Virgin Islands and two other countries (3)

Links(1)  http://www.thisisjersey.com/2011/03/28/jersey-to-help-in-probe-into-india-bribes-t
(2) http://www.ft.com/cms/s/0/72130720-4f9f-11e0-a37e-00144feab49a.html
(3) http://www.thehindu.com/news/national/article1540376.ece 

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