A Swiss court ruled that confidential data on the wealth manager's clients can be shipped to French officials. It is a body blow for UBS as it heads into an appeal Paris.
Switzerland's highest court ruled that Swiss tax officials may send data on roughly 40,000 French clients to France's tax office, Swiss newswire «AWP» (in German) reported on Friday. The move represents another setback in a years-long tussle involving charges of money laundering and tax dodging in France.
The ruling, which fell very closely at three judges in favor against two opposing, directly affects UBS but has serious implications for the wider Swiss banking industry. It means the Swiss government will agree to comply with a French request for UBS' confidential client data – and it opens the door for French officials to pursue other Swiss wealth managers with as much vigor as it has UBS.
Defensive Stance
The world's largest wealth manager has been unbowed after a French court slammed it with a conviction and $5 billion fine in February. UBS shredded the decision, vowing to hone its strategy and fight on, but investors made their ire known in May by denying Chairman Axel Weber and CEO Sergio Ermotti a key and normally routine backing.
A spokeswoman for UBS said the bank had taken note of the decision, which reverses a lower court ruling last year and will review the written verdict. «Regardless of the decision, it is important that the Swiss Federal Tax Authority ensures that any data-sharing is subject to the specialty principle before any data is shared,» UBS said. This refers to the practice of applying principles of law to one individual matter only, not broadly.
