French authorities fined UBS $ 4 billion for helping customers to avoid taxes

Image: Martin Abegglen | CC BY-SA 2.0

According to media reports, UBS, a Swiss bank, helped large French clients avoid paying taxes at home by hiding their assets from government. Now the court in France has imposed on the bank the largest fine in the history of the country in the amount of $ 4.2 billion (€ 3.7 billion).
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What are the charges?

The investigation of this case lasted seven years, the proceedings began after several former UBS employees filed allegations of illegal operations. According to the calculations of the French authorities, from 2004 to 2012, the bank helped rich clients from France to hide € 10 billion in assets from the country's tax authorities.

Following the investigation of the national financial prosecutor's office of France, the bank imposed the largest in the country's financial sector in the amount of € 3.7 ($ 4.2 billion). Representatives of the ministry said that the bank and its management "were well aware that they were violating the laws of the country," helping clients avoid taxation at home.

In addition, a fine of € 15 million will be imposed on the French subsidiary of UBS, and six top managers of the company will be fined up to half a million euros each.

Representatives of the bank refused to admit guilt in tax violations, stating that the company acted in accordance with the rules and laws of Switzerland. The bank also stated that it was “not in the know” that some French clients were hiding assets in Switzerland from the tax authorities of their home country. Representatives of UBS called the charges of former employees unfounded.

Prehistory

UBS Bank was among the large financial companies that lobbied for the emergence in French law of the possibility of pre-trial settlement in money laundering and tax offense cases. In 2016, the changes came into force.

In the course of the current proceedings, the French authorities initially demanded damages of € 1.1 billion from UBS. Back in 2009, UBS paid a $ 780 million fine on similar charges in the US, but in this case the bank offered to pay only € 180 million. This offer was rejected, and then the legal department of UBS decided to proceed to legal proceedings in the hope of fully justifying the company. This plan failed miserably.

The French financial prosecutor’s office has previously made similar accusations against another Swiss bank, HSBC Private Bank. During the first in the history of the country proceedings against the bank in the case of tax evasion, the company paid a fine of € 300 million.

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