A French court issued a ground-breaking ruling which may dramatically shift the landscape for UBS' money laundering and tax evasion appeal.
An upper court in France issued a ruling that orders lower courts to factor fines and penalties for tax offenses on the basis of the tax evaded or defrauded – and not the total sum of undeclared money, according to Swiss daily «Neue Zuercher Zeitung» (in German, behind paywall).
The ruling from one of France's highest – or cassation – courts, which was handed down in September, is central for UBS: the Swiss bank is fighting a multi-billion penalty handed down earlier this year. The recent ruling, which doesn't involve UBS, may move the goalposts the Swiss bank's ongoing appeal of that decision.
Calculating Fines
In February, the Zurich-based bank was hit with a $5 billion fine by a Paris judge in a long-running criminal proceeding over allegations of tax evasion and money-laundering. The sanction was based on 3.7 billion euros ($4.1 billion) which 3,900 French citizens came clean on between 2013 and 2015.
Since then, UBS has honed its defense plan as it heads into an appeal, which is poised to last at least until the end of next year. The snafu led to an embarrassing rejection for Chairman Axel Weber and Sergio Ermotti earlier this year.
