The tax dispute between Switzerland's largest bank and French authorities has lasted almost ten years. Now it wins on appeal although France's highest court upholds the original verdict.
The legal to and fro between UBS and the French authorities has taken a new – and – surprising turn.
The highest court in the country ruled to annul the penalty and send the case back to a lower court to be retried, according to various news information services on Wednesday (collated Google search results).
No Full Acquittal
In short, that means that the dispute is by no means over. Moreover, the fact that the court held to the original verdict against UBS that convicted the bank of illegal client solicitation and aggravated laundering of tax fraud proceeds should clearly be seen as a setback.
UBS itself had always vehemently contested the original decision and wanted to see a full acquittal. The reasoning was that it wasn't in a position to accept a criminal conviction because of the serious reputational damage it would cause.
Moderately Satisfied
A media release sent by UBS on Wednesday indicated that it was, unsurprisingly, both pleased and disappointed: «While UBS is pleased that the highest court in France agrees with its position on these important aspects of the legal case, UBS is disappointed that the French Supreme Court has confirmed the previous court decision regarding unlawful client solicitation and aggravated laundering of the proceeds of tax fraud».
It also maintained that it had acted in accordance with all applicable laws and regulations «at all times» and indicated it would defend itself in the upcoming trial in France.
Paid Damages
In December 2021, UBS was found guilty by an appeals court in Paris following a ruling after the first hearing that threatened the bank with a then-record fine of 4.5 billion euros ($5.1 billion at the time). The bank was found guilty after being charged with soliciting French clients to open undeclared accounts in Switzerland.
On appeal, the penalty was very significantly cut to 1.8 billion euros, of which 1 billion of the total comprised the fine itself and 800 million euros in damages to the French state. Beyond the court's ruling, the appeal on Wednesday only relates to the fine itself as the damages to the French government have already been paid.
