UBS Spared $2 Billion Fine After French Supreme Court Calls for New Tax Fraud Trial -- Update

   By Mauro Orru and Pierre Bertrand 
 

UBS Group won't have to pay around $2 billion after the French Supreme Court partly overturned a decision from a lower court that had fined the bank in a long-running tax-fraud case, but confirmed a ruling that the bank had helped wealthy clients in France evade taxes.

The latest ruling, announced Wednesday by the Supreme Court, effectively rescinds the financial penalties imposed on UBS in December 2021.

At the time, a Court of Appeal had levied a fine of 3.75 million euros ($4.1 million) on the bank, the confiscation of EUR1 billion, and awarded civil damages of EUR800 million to the French state, which UBS appealed.

Wednesday's decision can't be appealed as it comes from the highest court in France. However, the Supreme Court said in its ruling that it would send the case back to the Paris Court of Appeal to reconsider potential penalties on the elements of the case that were overturned.

UBS said it acted in accordance with all applicable laws and regulations at all times and that it would defend itself in the forthcoming trial.

"While UBS is pleased that the highest court in France agrees with its position on these important aspects of the legal case, UBS is disappointed that the French Supreme Court has confirmed the previous court decision regarding unlawful client solicitation and aggravated laundering of the proceeds of tax fraud despite the treaty between Europe and Switzerland on the taxation of savings income and a lack of specific evidence for the alleged facts," the bank said in a statement.

The Zurich-based bank and some former employees have been under investigation in France since 2013. Back in 2019, a court of first instance had imposed a fine of EUR3.7 billion on UBS and ordered the bank to pay EUR800 million in damages to the French government for lost tax revenue. That fine was subsequently reduced by the Court of Appeal in 2021.

UBS said in its latest financial report that its balance sheet at the end of September had provisions of EUR1.1 billion in relation to the tax case, a figure that it said reflected its best forecasts of possible financial implications.

At 1602 GMT, UBS shares traded 2.3% higher to CHF22.61.

Write to Mauro Orru at [e-mail] and Pierre Bertrand at [e-mail]

(END) Dow Jones Newswires

November 15, 2023 11:24 ET (16:24 GMT)

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