Study Material | Test Series
Drishti IAS
call1800-121-6260 / 011-47532596
Drishti The Vision Foundation
(A unit of VDK Eduventures Pvt. Ltd.)
mains Test Series 2018
India Fails to Sign Multilateral Competent Authority Agreement (MCAA)
Nov 01, 2014

Conspicuous by its absence was India, who was not part of this group of signatories that include emerging economies such as South Africa and Argentina joining the OECD (Organisation for Economic Co-operation and Development) countries such as France, Germany and the United Kingdom. Some countries that have traditionally been seen as banking secrecy jurisdictions or tax havens also signed on and this includes Austria, Liechtenstein and Cayman Islands. Mauritius has also signed the agreement. Switzerland, which had committed as an early adopter, hasn’t yet signed.

Low income countries who do not have the wherewithal to collect information won't be able to sign because reciprocity is a condition. If they cannot give info under the automatic system, they cannot get info except using older methods. Tax havens would be reluctant to give information so they won't sign this agreement. Or if a country doesn't need to information, it will not sign. None of the above apply to India

The OECD said that it could not comment on why India couldn't sign but said that the agreement remains open so more countries, including India, can still sign it. It remains unclear however as to why India was unable to participate in this big signing since it had committed to early adoption.

In September, the OECD presented a new standard whereby countries signing treaties will be provided exchange of all financial information on an annual basis, automatically. 90 countries, including India, committed to early adoption.

The Multilateral Competent Authority Agreement (MCAA) which will activate the automatic exchange of information is a framework that provides a standardized set of rules. It will provide for first information exchanges by September 2017.

Bilateral treaties, on the other hand, are also an option but would need more time and resources and also leave the scope for countries shielding wrongdoers to haggle over the terms. India and Switzerland have been wrangling over such issues for many years.


Helpline Number : 87501 87501
To Subscribe Newsletter and Get Updates.

http://www.drishtiias.com/upsc-current-affairs-article-India-Fails-to-Sign-Multilateral-Competent-Authority-Agreement-MCAA