Swiss banking group UBS has been directed to pay a €3.7bn penalty by a French court for aiding tax evasion.
According to the judges, the bank helped clients in France illegally conceal assets worth billions of euros between 2004 and 2012.
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Apart from the fine, UBS has also been ordered to pay €800m to the French state in civil damages.
Prior to Wednesday’s ruling, the Swiss bank failed to reach a settlement with French authorities.
A year’s worth of profits
The combined €4.5bn that French authorities have ordered UBS to pay equates to the entire of 2018’s profits at the Swiss bank and more. UBS reported profits of €4.3bn for 2018 last month.
Swiss bankers are likely to be unnerved at the size of the charge: It is the biggest such fine in both France’s and UBS’s history. It is also one of the largest levied against a Swiss bank in recent years. In 2016 Credit Suisse reached $5.28bn settlement with US authorities over the sale of toxic mortgages.
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By GlobalDataUBS appeals
UBS refused to admit any misconduct on its part. “UBS strongly disagrees with the verdict,” the bank said in a statement after the ruling.
According to UBS, the verdict is not supported by concrete evidence but rather based on allegations of ex-staff.
Announcing its decision to appeal the case, UBS said that the verdict does not utilise a “credible methodology” for the calculation of the penalty.
“The charges of laundering the proceeds of tax fraud are without merit, as the predicate offence of an original tax fraud of French tax payers was not proven,” the bank noted.
A short history of UBS fines
UBS was fined €300m in Germany and $780m in the US in 2014 and 2009, respectively, over tax fraud.
The bank has been embroiled in several legal issues recently as well. Last month, a former UBS banker was convicted for selling client data to German tax officials.
In December 2018, UBS was fined $15m by US regulators for lapses in anti-money laundering controls.
Earlier last year, UBS agreed to pay $230m to resolve allegations of toxic securities sale in New York.
