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A French court fined Swiss bank UBS 1.8 billion euros ($2.0 billion) on appeal on Monday for its role in helping French residents commit tax fraud.
UBS took the fight to the Paris appeals court after being initially hit with a 3.7-billion-euro fine in a 2019 ruling, France’s biggest-ever tax evasion penalty.
The court found UBS guilty of concealing serious tax fraud and illegal banking activities in France between 2004 and 2012, when it was sending Swiss bankers to court well-heeled French clients.
The fine is only marginally below the two billion euros that French prosecutors had requested.
Shares in UBS rose after the ruling was handed down, and were up 1.5 percent in mid-afternoon trading.
According to prosecutor Muriel Fusina, UBS was “gathering large amounts (of money) by offering efficient wealth management, but also concealing that wealth, or part of it, from the French taxman” between 2004 and 2012.
That was when former employees came forward with allegations of unlawful conduct and French authorities launched what turned out to be a seven-year investigation.
French prosecutors said almost 10 billion euros were shielded from the eyes of their tax officials over that eight-year period ending in 2012.
Since then Switzerland’s once-renowned banking secrecy has become more transparent with the introduction of automatic financial data-sharing between countries from 2018.
“The ruling is difficult to understand,” said UBS’ lawyer, Herve Temime. “It’s a ruling that is 2.7 billion less … than the trial court”, but “in principle it is a conviction, so we will consider if we’ll appeal further.”
Four of six UBS bankers who also faced charges were handed down suspended jail sentences of up to one year and 300,000-euro fines, which were mostly less than what was handed down by the trial court which convicted five of them.
The French subsidiary of UBS was fined 1.875 million euros for complicity in illegal banking activities, compared to 15 million-euro fine handed down by the trial court. It was cleared of conspiracy in aggravated fraud.
UBS was accused of organising or inviting prospective clients to prestigious outings such as the French Open or luxury hunting retreats, where bankers would meet their “prospects” – something they were not allowed to do under French law.
UBS France directors then used notes called “milk tickets” to keep track of how many “milk cans” – amounts of money – were transferred to Swiss accounts.
Only one “milk ticket” was found during the inquiry, but prosecutors pointed to the roughly 3,700 French UBS clients who took advantage of an amnesty to regularise their tax declarations with the French authorities.
(AFP)
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