UBS French tax evasion appeal: what's at stake

(MENAFN- Swissinfo)

UBS disputes a court verdict that it deliberately targeted French tax cheats. © Keystone / Ti-press / Alessandro Crinari

UBS shareholders will be closely watching the bank's appeal against a €4.5 billion (CHF4.9 billion) tax evasion penalty in France. It is equally of interest to anti-corruption campaigners, who contend that tough sanctions are the only way to clean up the financial system.

This content was published on March 8, 2021 - 09:00 March 8, 2021 - 09:00 Matthew Allen

When not covering fintech, cryptocurrencies, blockchain, banks and trade, swissinfo.ch's business correspondent can be found playing cricket on various grounds in Switzerland - including the frozen lake of St Moritz.

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  Les enjeux du procès en appel d'UBS pour évasion fiscale en France

In February 2019, a Paris court fined UBS €3.7 billion for aiding and abetting tax evaders and ordered the bank to pay an additional €800,000 in damages. UBS immediately said it would appeal , a case that starts on March 8 and is expected to last more than two weeks.

A main pillar of the bank's defence is that it was complying with the tax regulations of the day – the European Union Savings Directive, which did not compel banks to hand over client data to other countries. The automatic exchange of tax information between Switzerland and the EU came into force in 2017 – after the offences are said to have taken place.

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UBS's lawyers say the original trial was wrong to state that the bank went out of its way to attract tax cheats and that the verdict was legally flawed.

There are some that think the French prosecution and court verdict were politically motivated. Nicholas Shaxson of the British-based NGO Tax Justice Network agrees, although he sees nothing wrong with this.

'Politicians and voters are getting angrier and angrier about tax evasion and money laundering,' he said. 'As a result, I would expect to see more large fines. Sanctions of this magnitude are absolutely essential to stop this type of behaviour. They have not been used often enough.'

The puzzling thing for many people is that dirty money still appears to be rife in the financial system despite the much-hyped death of banking secrecy several years ago . In a recent case, one in eight Swiss banks were suspected to have hidden embezzled Venezuelan funds . Doubts have been raised as to whether Switzerland has either the political will or the legal clout to properly curtail the illicit activities of the financial centre.

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