India, Britain see progress at G20 in tackling tax havens

April 1st, 2009 - 11:16 pm ICT by IANS  

Manmohan Singh By Arvind Padmanabhan
London, April 1 (IANS) India and Britain see progress at the G20 in addressing the lack of transparency among tax havens that hide behind strict secrecy laws in their banking system to protect people who park their funds with them.

Briefing reporters after a meeting between Prime Minister Manmohan Singh and his British counterpart Gordon Brown, Foreign Secretary Shivshankar Menon said G20 leaders were coming to a consensus on the need to share information on bank accounts by the tax havens.

“There seems to be a coming of minds,” Menon said, after the bilateral talks that focused mainly on the issues concerning the Group of 20 (G20) summit here Thursday - the primary purpose for which Manmohan Singh is in the British capital.

He said both prime ministers were in agreement.

There have been growing demands by opposition parties in India that the United Progressive Alliance (UPA) government write to tax havens like Switzerland and Liechtenstein for the names of Indians who have stashed away ill-gotten money there.

“Our prime minister also spoke of some form of international agreement on the exchange of information in the banking system - a transparent banking system,” Menon said.

“This addresses several problems, apart from transparency also confidentiality. And this is something we have been speaking about in the G20 process for some time,” he said, adding there were indications that a broader consensus was emerging.

According to Menon, one of the reasons for the current global financial crisis was the lack of transparency and surveillance of the global financial system. He said it was logical that more the transparency and surveillance the better the regulation.

“It is not the question of illegal money alone, but also illegal flows,” said the foreign secretary, alluding to the fact that some of the funds may also go into financing illegal activities like terrorism.

Menon said he was also told by Planning Commission Deputy Chairman Montek Singh Ahluwalia that significant progress was being made ahead of the G20 summit Thursday in addressing the global financial crisis.

Ahluwalia, who participated in a series of preparatory meetings Wednesday, will be the prime minister’s key aide or ‘Sherpa’ for the summit Thursday, when the G20 leaders including Brown and US President Barack Obama meet.

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