UBS ordered to pay US$2b after French tax fraud appeal

[PARIS] UBS Group got a boost after judges ordered the lender to pay a heavily reduced US$2 billion penalty for helping wealthy French clients to stash undeclared funds in Swiss accounts.

The Paris court of appeals on Monday upheld a 2019 ruling that the bank had illegally laundered funds by providing customers with a range of services to hide assets from tax authorities. But in line with changes to case law, the initial 4.5 billion-euro (S$6.9 billion) levy was reduced and includes 800 million euros in damages and a confiscation order of 1 billion euros.

While hardly a victory for UBS, it's still a significant cut on the original penalty that stunned the Swiss bank two years ago and led to shareholder revolt over the management's handling of the case. According to French law, UBS will be required to pay the damages granted to the state but appealing to France's top court should put the fine on hold.

Expectations that UBS would win a reduction on appeal peaked during the trial hearings after prosecutors conceded that recent guidance from France's top court forced them to seek a lower fine, bringing the total penalty and damages sought to 3 billion euros.

BLOOMBERG