UBS trial: the bank fixed on its fate on Monday

Posted on 12 Dec. 2021 at 12:10

What will be the decision of the Paris Court of Appeal? Postponed to September, it is finally this Monday that UBS should know the amount of the penalty imposed by the judges in the so-called “milk books” case.

Between 2004 and 2012, UBS would have set up in France a vast system of canvassing wealthy clients to open accounts in Switzerland, without the knowledge of the tax authorities.

In 2019, the Swiss bank was found guilty of money laundering, tax fraud and illicit canvassing, and sentenced to the biggest sanction ever pronounced by French justice: 4.5 billion euros, including 3.7 billion in fines. and 800,000 euros owed to the French State as damages.

This sentence could be slightly planed. New case law from the Court of Cassation has indeed changed the basis for calculating a fine due in the event of laundering tax fraud. The base is no longer the amount of assets evaded, but the amount of unpaid taxes on these sums.

3 billion sanctions requested

Therefore, according to the State lawyer, the amount of rights evaded by people who have “sobered” their defrauded assets would be 895 million euros. On this new basis, the public prosecutor’s office had quantified the fine requested from UBS at “at least” 2 billion euros. Xavier Normand-Bodard, the State lawyer, civil party in this lawsuit, had requested a further 1 billion in damages.

It is thus 3 billion euros that UBS would have to pay if the court were to follow these requisitions, instead of the 4.5 billion of the first instance judgment. A fine that would remain record and could, if followed, encourage the bank to appeal.

The bank will have five days to decide whether to appeal. If it chose this option, only damages would be payable, the appeal being suspensive only on the payment of the fine. Alongside the legal person, former leaders are being prosecuted who, for their part, should choose the appeal in the event of a conviction.

UBS, which has always maintained that it respected French, Swiss and European law in force at the material time, posted a deposit of 1.1 billion euros in this case and set aside 450 million euros for this dispute. .

“Bygone era”

The public prosecutor’s office also asked for confirmation of the fine imposed at first instance on UBS France, i.e. 15 million euros, as well as the sentences of the six former executives prosecuted, ranging from 6 to 18 months in prison with suspended sentence and 50,000 to 300,000 euros fine.

Fraud finds its source in a vertically structured, systematic and old organization

trial judgment February 20, 2019

However, nothing indicates that President François Reygrobellet will comply with the new jurisprudence of the Court of Cassation. It would not be the first time that the Paris Court of Appeal has made case-law “resistance”. Even if the scenario appears theoretical, the court can thus confirm the conviction at first instance.

The court will also have to rule on another subject of law: at first instance, the court had stigmatized “a fault of exceptional gravity”. The reasoning adopted by the judges was a small legal revolution: “the fraud finds its source in a vertically structured, systematic and old organization”. In short: no need to look for the details of the fraud – especially in terms of proof – since the system put in place by the legal person could only lead to it.

A “bygone era”, pleaded Hervé Temime one of the bank’s lawyers. According to him between 2004 and 2012, UBS only offered services related to banking secrecy, then “protected” by an agreement between Switzerland and the European Union.

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