UBS faces trial in France over tax al­le­ga­tions

Financial Times Middle East - - Companies - JEN­NIFER THOMPSON, RALPH ATKINS AND MICHAEL STOTHARD

UBS faces crim­i­nal trial in France af­ter fail­ing to agree a set­tle­ment with pros­e­cu­tors over al­le­ga­tions it helped wealthy clients to evade tax au­thor­i­ties.

The Swiss bank said the group and its French unit have been told that the in­ves­tiga­tive judges from PNF, the na­tional fi­nan­cial prose­cu­tor’s of­fice, havede­cid­ed­to­takethe­case­to­court.

“We will now have the pos­si­bil­ity to re­spond in de­tail in a court of law,” the bank­said­i­nas­tate­men­tyes­ter­day.

“UBS has made clear that the bank dis­agrees with the al­le­ga­tions, as­sump­tions and le­gal in­ter­pre­ta­tions be­ing made,” it added. “We will con­tinue to strongly de­fend our­selves and look for­ward­toafair­pro­ceed­ing.”

PNF has sug­gested that UBS pays at least €1.1bn, an amount that cor­re­sponds to a fig­ure the Swiss bank has al­ready paid as a court bond as part of the dis­pute, ac­cord­ing to people briefed on the failed talks. But UBS has been push­ing for a fig­ure closer to the €300m it had to pay in 2014 to Ger­man au­thor­i­ties over a sim­i­lar in­ves­ti­ga­tion into whether it helped Ger­man clients evade taxes, ac­cord­ing to the people.

The in­ves­tiga­tive judges or­dered that UBS be tried for al­leged “illegal bank­ing” as well as “ag­gra­vated money laun­der­ing and tax fraud”, ac­cord­ing to a PNF spokesman. They also or­dered a trial for five se­nior bank of­fi­cials in France­andSwitzer­land.

The PNF has es­ti­mated that some €9.76bn worth of fraud­u­lent money was held by UBS on be­half of French in­di­vid­u­als, ac­cord­ing to one per­son briefed on its probe. If the bank loses at trial, the fine may amount to “up to half of the value or funds in­volved in laun­der­ing op­er­a­tions”, ac­cord­ing to the French Crim­i­nalCode.

The PNF has re­cently launched sev­eral high-pro­file in­ves­ti­ga­tions, in­clud­ing one into em­bez­zle­ment al­le­ga­tions against François Fil­lon, the centre-right pres­i­den­tial can­di­date. The DoJ’s move makes it the lat­est reg­u­la­tor to drop its in­ves­ti­ga­tion into the forex busi­ness of Ger­many’s largest lender, af­ter the US Com­mod­ity Fu­tures Trad­ing Com­mis­sion ended its own probeinOc­to­ber­lastyear.

Thede­ci­sion­comest­woyearsafter­six global banks — Bar­clays, Cit­i­group, JPMor­gan, Royal Bank of Scot­land, UBS and Bank of Amer­ica — reached a $5.6bn deal with US and UK au­thor­i­ties

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