January 22, 2022

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French Appeals Courtroom Says UBS Helped Shoppers Evade Taxes

French Appeals Court Says UBS Helped Clients Evade Taxes

An appeals courtroom in France on Monday ordered the Swiss financial institution UBS to pay a high-quality of 1.8 billion euros (about $2 billion) for serving to wealthy purchasers evade taxes — lower than half the penalty the financial institution had been ordered to pay two years in the past in a sensational case that prosecutors had likened to the plot of a James Bond film.

Judges had originally ordered UBS in 2019 to pay €3.7 billion — the biggest high-quality in French historical past — for finishing up what prosecutors stated was a long-running scheme to assist rich French purchasers illegally conceal big sums of cash from the authorities, utilizing cloak-and-dagger ways.

The courtroom on Monday minimize the high-quality however upheld the costs towards UBS. The high-quality consists of a €1 billion confiscation order and €800 million in damages.

UBS has denied wrongdoing, and it stated it could attraction the most recent ruling to France’s highest courtroom. It made a failed try earlier this yr to get the case overturned on constitutional grounds. In looking for a decreased penalty, UBS legal professionals argued that whereas a few of its Swiss bankers met with rich French purchasers, they didn’t unlawfully solicit them to evade taxes.

The case blew open in 2019 following a seven-year investigation by French financial authorities. A number of whistle-blowers at UBS France got here ahead with tales of how the banks’ staff in France and Switzerland engaged in criminal activity that primarily bilked the French tax authorities of greater than 10 billion euros. UBS paid a $780 million high-quality in the USA in 2009 to resolve accusations that it had helped wealthy purchasers there dodge taxes.

Prosecutors described how bankers from UBS France, motivated by the prospect of hefty bonuses, had alerted their counterparts in Switzerland to potential “large potatoes” — French residents with property of €500,000 to €10 million.

To lure these folks to open undeclared accounts exterior of France, UBS staff traveled clandestinely from Switzerland to France, the place they organized swank actions — together with exhibits on the Paris Opera, artwork reveals and looking outings — the place the bankers might mingle with prospects in hopes of slipping round French legal guidelines prohibiting overseas firms from soliciting purchasers on French territory, prosecutors stated.

To keep away from detection, the bankers concerned within the scheme adopted a UBS “safety governance handbook” that included directions for utilizing encrypted computer systems, enterprise playing cards with out the financial institution’s brand and switching accommodations regularly, prosecutors stated. If caught, the directions described tips on how to stash paperwork and USB laptop keys in hidden pockets sewn into coats and backpacks.

The financial institution additionally created a parallel accounting system generally known as the milk books, after the small notebooks used as ledgers by Swiss cow farmers, prosecutors stated. The books have been used to maintain tabs on and masks transfers of illicit cash between Paris and Geneva, prosecutors stated.

4 UBS bankers got suspended jail sentences of as much as one yr and fines of €300,000 every.

UBS has 5 days to attraction the ruling. The financial institution’s shares jumped almost 3 % Monday following the courtroom’s announcement.

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