UBS has closed another chapter in the long-running legal battle with German tax authorities. This time, the bank escaped almost unscathed because the prosecution lacked conclusive evidence.
UBS has reached an out-of-court settlement in the tax-evasion trial in Mannheim: Switzerland’s largest bank agreed to pay 4 million euros ($4.5 million) to the German state. The judge will stop proceedings against the bank this week, according to a report in «Mannheimer Morgen» newspaper (behind paywall, in German).
The Evidence Wasn't There
The bank will not be convicted and the prosecution will drop the charge of abetting tax evasion against the bank. The trial is the second on the same charges after a court in Bochum ordered UBS in 2014 to pay 300 million euros for helping German citizens avoid paying taxes.
The second trial was going ahead because the prosecutor successfully claimed that the first had been directed at the Swiss-based headquarters, but explicitly didn’t include the misdemeanors of its German division. The evidence put forward in the trial against UBS Europe SE in Frankfurt clearly didn’t suffice to again convict the bank for the same reason, a development that had become a likely outcome in recent days.
No Comparison to Dimension of French Case
The prosecution had pushed for a payment of 83 million euros. The sum included 82 million euros the bank allegedly gained from helping the tax avoidance and a fine of 1 million euros. What’s left after the out-of-court settlement is a fraction of this claim.
By contrast, UBS is facing a retrial in Paris of quite another dimension. The first instance court ruled against the bank and ordered it to pay 4.5 billion euros.
