UBS bank penalised over French tax avoidance

Image copyright AFP Image caption Emmanuel Macron announced a €50 billion tax amnesty in January

A French appeals court has ruled that Swiss bank UBS helped wealthy French citizens hide undeclared assets from the tax authorities in Switzerland.

The Court of Cassation said the bank’s negligence meant it breached French law by not intercepting illegally transferred money.

French nationals had been able to use secret Swiss accounts to avoid tax.

UBS France’s corporate chief issued a statement after the ruling, saying: “The bank is determined to fight against tax fraud and have always respected European directives.”

In April, UBS was ordered to pay fines totalling 700,000 euros (£644,375; $850,670) and be banned from conducting new business in France.

The bank has maintained it did not knowingly aid tax evasion, according to the French news agency AFP.

Analysis

By David Lister, BBC West Asia correspondent

After years of a standoff over what many considered Swiss bank secrecy, this ruling is a powerful blow.

After Europe imposed sanctions, Switzerland accepted that its banking industry could no longer shelter the wealth of wealthy tax dodgers, after France took legal action.

The compensation to French taxpayers is a drop in the ocean for UBS, but it was always a matter of time before they were taken to court.

And, while the bank was probably going to have to pay a fine, it had no reason to panic. Swiss citizens are supposed to only ever be prosecuted in Swiss courts, so they had every hope of avoiding the same sentence that was imposed on Swiss bankers during the Second World War.

It’s a wake-up call, though. For years, French tax investigators have been hunting down taxpayers using Swiss accounts. To reach a major outcome, they had to learn to rely on existing legal precedents – and now they have.

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