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Secrecy Clauses in Multi-lateral Agreements vs. Customer Confidentiality in Banks and People’s Right to Know: A Possible Way Ahead

Dear all,

The attachment to this email contains a companion article to my previous one circulated on 27th October, 2014 on the subject of Double Tax Avoidance Agreements and their curbing effects on access to information.
In this sequel I have tried to argue as follows:
1) While the OECD and UN Conventions only required secrecy to be maintained according to the laws of the Contracting State, Article 22(1) of the Mutual Assistance on Tax Administration Matters Convention (MATAMC) ups the ante by subjecting the information to the legal safeguards available for such information in the partner State which provided that information- and not what is available in the requesting State. Article 22(4) requires a State to take a clearance from the Partner State which supplied the information if it is to be disclosed to any other authority including its own Supreme Court. 
2) The Multi-lateral Competent Authority Agreement is designed to operationalise the provisions related to the automatic exchange of information about persons covered by the MATAMC between Partner States. It only reinforces the secrecy requirements set down by MATAMC. India stepped back from signing this agreement, a couple of days ago.
3) The secrecy provisions of UN Convention Against Corruption are as stringent as well and do not override other treaties and agreements that cover related matters.
4) Indian Banks can disclose customer-related information under specific circumstances by applying the Tournier Principles.
5) Madras and Kerala High Courts applied the Tournier Principles to order transparency in Banks


Given the existence of clear principles both domestically and internationally where bank-related information can be disclosed where there is a duty to the public to disclose, or to disclose it to protect the bank’s own interest the Government of India can renegotiate with foreign tax jurisdictions from a position of strength. After all the Government is elected to represent the interests of its people instead of meekly giving to the interests of foreign tax jurisdictions who always negotiate from the goal of national interest. India has demonstrated its diplomatic muscle when it came to protecting national interests in the past at the discussions on Climate Change and the more recent WTO discussions on State subsidies to farmers and consumers. What is required is a sound strategy for renegotiating these matters and also solidarity building with other similarly placed developing countries that are also troubled by tax evasion by some filthy rich individuals and corporates.


It is important not to give in to the standards of secrecy that other jurisdictions have adopted when India’s own jurisprudence on transparency is robust. Will the NDA live up to its commitment to transparency even in the face of DTAAs and MTAs remains to be seen.

Please circulate this email and the attachment widely.
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Venkatesh Nayak
Programme Coordinator
Access to Information Programme
Commonwealth Human Rights Initiative
#55 A, 3rd Floor, Siddharth Chambers-1
Kalu Sarai
New Delhi- 110 016
Tel: +91-11-43180201/ 43180215
Fax: +91-11-26864688
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DATED: Monday, 03 November 2014 11:05
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