France fines Swiss bank UBS record €3.7b in tax fraud case

Paris: A Paris court on Wednesday fined Swiss banking giant UBS €3.7 billion ($4.2 billion; Dh15.37 billion) for encouraging customers to commit tax fraud, a record in France where public opinion has grown vocal for crackdowns on tax dodging.

Lawyers for the bank, which was convicted of illegally soliciting rich clients abroad and helping them to hide billions from French tax authorities, said they would appeal the landmark ruling.

Court president Christine Mee said the bank was guilty of “exceptionally serious” misdeeds “whose origins are to be found in a structured, systemic and age-old organisation”.

Settlement attempt

UBS, the world’s largest private bank, had tried to negotiate a settlement to avoid the potentially embarrassing court showdown, but failed to agree on a fine with prosecutors.

As well as the landmark fine for UBS, the bank’s French subsidiary was fined €15 million for complicity.

And the court also awarded the French state, itself a plaintiff in the case, €800 million in damages, half the €1.6 billion sought by prosecutors.

The decision came as authorities across Europe have cracked down on tax evasion and dubious banking practices in the wake of the 2008 global financial crisis.

The trial opened last autumn after seven years of investigations, launched when former employees came forward with claims of unlawful conduct.

A series of leaks and investigations — Luxleaks in 2014, the Panama Papers in 2016, and the Paradise Papers in 2017 — have helped shed light on tax fraud by international corporations as well as world celebrities.

Pressure eventually forced Switzerland to effectively end its tradition of ironclad bank secrecy, joining more than 90 countries which agreed to automatically share more client account information with each other.