French authorities fined UBS bank $ 4 billion for helping customers avoid tax
Image: Martin Abegglen | CC BY-SA 2.0
According to media reports, the Swiss bank UBS helped large French customers to avoid paying taxes at home by hiding their assets from government agencies. Now, a 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).
What is the essence of 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 wealthy customers from France hide assets of € 10 billion from the country's tax authorities.
According to an investigation by the French national financial prosecutor’s office, the bank was subjected to the largest financial burden in the country in the amount of € 3, 7 ($ 4.2 billion). Representatives of the department said that the bank and its management "were well aware that they were violating the laws of the country," helping customers avoid taxation at home.
In addition, a fine of € 15 million will be imposed on the French “daughter” of UBS, and six top managers of the company will be fined up to half a million euros each.
Bank representatives refused to plead guilty to tax violations, stating that the company acted in accordance with the norms and laws of Switzerland. The bank also said that it was “not aware” of some French customers hiding assets in Switzerland from the tax authorities of their home country. Representatives of UBS called the allegations of former employees unfounded.
Background
UBS was among the major financial companies that lobbied for the possibility of pre-trial settlement in cases of money laundering and tax crimes in French law. In 2016, the changes took effect.
In the current proceedings, the French authorities initially demanded compensation from UBS in the amount of € 1.1 billion. UBS paid a fine of $ 780 million in 2009 on similar charges in the United States, but in this case the bank offered to pay only € 180 million. This proposal was rejected, and then the UBS legal department decided to proceed to litigation in the hope of a complete acquittal of the company. This plan failed miserably.
French financial prosecutors have previously made similar allegations against another Swiss bank, HSBC Private Bank. During the country's first tax litigation against a bank, the company paid a fine of € 300 million.
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