Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

French court rules UBS must deposit 1.1B euro in tax probe

Reprints

(Reuters) — A French appeals court ruled on Monday Swiss bank UBS must deposit a guarantee of 1.1 billion euros ($1.41 billion) in an investigation of charges it helped wealthy French customers avoid tax, the prosecutor’s office said.

The decision comes as banks around the world are building up their reserves for litigation risks in the face of investigations ranging from foreign exchange price-rigging to embargo violations.

France has also stepped up efforts to crack down on citizens with Swiss bank accounts in an attempt to bring to light tax cheats and bolster its tax intake.

The Zurich-based bank was put under formal investigation in July on allegations it laundered the proceeds of tax evasion. Investigators say they consider UBS’ case especially serious because its actions continued from 2004 until 2012.

The French judges who requested the payment said it reflects the size of the fine UBS could pay if it is found guilty.

UBS, which appealed in July, had already paid a much smaller 2.875 million-euro guarantee in the case. That was raised by judges in July to 1.1 billion to be paid by Sept. 30, and in one single transfer.

UBS lawyer Denis Chemla said on Sept. 8 the bail demand was “without legal basis” and contested the way it was calculated. The amount came to 42.6 percent of UBS’s profits after tax last year and 2.8 percent of its capital, Chemla said.

The French case is one of several legal issues the bank is facing. It hiked its provisions against future litigation to 1.98 billion swiss francs ($2.10 billion) but warned this might still not be enough to cover possible fines and charges.

UBS booked a near $300 million charge in the second quarter mainly to settle claims it helped wealthy Germans to dodge taxes. It faces a similar probe in Belgium.

UBS is also among a handful of large banks regulators are investigating over alleged rigging of the $5 trillion-a-day foreign currency market.

UBS said during the presentation of the second-quarter results that U.S. regulators are probing its off-market “dark pool” share trading venue.

Read Next