France Fines UBS US$2bn Over Tax Fraud

A French appeals court on Monday levied 1.8 billion euros (US$2 billion) in penalties on Swiss bank UBS for its role in helping French residents commit tax fraud.

UBS took the fight to the Paris appeals court after being initially hit with 4.5 billion euros in fines and damages in a 2019 ruling, France's biggest-ever tax evasion penalty.

The appeals 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 penalties are only marginally below the two billion euros that French prosecutors had requested on appeal.

Shares in UBS rose after the ruling was handed down, peaking with a gain of 2.9 percent from Friday's close. They ended the day down 0.36 percent, however.

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's 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."

UBS later said in a statement it "will review the decision and consider all options, including appeal".

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. (AFP)