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UBS is set to face criminal charges in France. finews.asia recounts why the Swiss bank, normally docile when its scandals threaten to spill into court, couldn't avoid it this time. 

The U.S. led the way: American prosecutors were the first to extract a huge sum from a Swiss bank – UBS – by cracking down on tax dodgers and cheats in 2009.

European nations have followed the blueprint in recent years: A regulator or prosecutor saber-rattles with threats of charges, the bank clams up, only to bury the disclosure of a new probe in increasingly long litigation sections of its annual report.

Offshore Account Maintained

France is among the nations to scrutinize tax offenders. Memorably, French government minister Jérôme Cahuzac has to leave his job in President François Hollande's administration after it emerged that he had maintained an offshore account.

The bank already had to cough up 1.3 billion euros ($1.5 billion) as a so-called caution payment in 2014, and estimates for the bank to ultimately set aside the case run more than four times that.

Whistle Blown

Like in the U.S., where whistleblower Bradley Birkenfeld blew the case vs UBS open, the Swiss bank was also implicated by a whistleblower, Stéphanie Gibaud. The former marketing staffer told officials that she was instructed by her superiors at UBS to delete evidence of secret meetings between Swiss private bankers and French clients.

Gibaud has since been vocal about the probe, including penning a book about the bank's alleged tax offenses two years after she was let go in 2012. Her campaign has hurt her credibility, UBS' French boss Jean-Frédéric de Leusse argued two years ago. Statements from Gibaud and a former colleague Nicolas Forissier, previously head of internal auditing, were grist to the mill for UBS detractors.

Uncooperative Swiss

The proceedings have been laborious for both sides: French prosecutors got zero legal aid from Switzerland on the 45,000 accounts it had received from Germany, which had also been pursuing its own probe.

French law, in turn, effectively cut off UBS' option to seek a quick settlement by admitting wrong-doing and paying a fine – which has been its modus operandi for the Swiss bank on everything from U.S. tax to rigging of benchmark interest rates and foreign exchange trading. A deferred prosecution-style deal wasn't even possible in France until last year, when a new law was introduced. 

Stamped «Guilty» 

Money aside, UBS shrunk from settling in France because it would have meant entering a guilty plea. Being stamped as «guilty» of a crime would have given rise to problems in the U.S., where criminally guilty corporations require special waivers to conduct certain types of business.

To be sure, UBS, like Credit Suisse, has already had to plead guilty in the U.S. once: UBS for rigging Libor rates, and Credit Suisse for helping American tax cheats. Both banks won political support to ultimately be exempted from business bans following their respective pleas.

Astronomical Bail

Long before a settlement between France and UBS was possible (remember: the case has been simmering since 2012), French officials set a huge obstacle: 1.1 million euros ($1.3 billion) in «caution,» or a form of corporate bail.