Swiss bank UBS Group AG, its French unit and six top executives were to go on trial yesterday after a long-running investigation into allegations that they helped wealthy clients avoid taxes in France.
After years of investigation and aborted settlement negotiations, UBS faces charges of aggravated tax fraud and money laundering, as well as illegally soliciting clients in France.
The largest Swiss bank risks fines of up to 5 billion euros (US$5.76 billion).
The bank intends to stand its ground in court.
“After more than six years of legal proceedings, we will finally have the opportunity to respond to the often unfounded allegations,” it said on Friday.
Banks became more rigorous after the 2008 financial crisis, a series of financial scandals at some of the world’s biggest banks and the imposition of tighter regulations, analysts have said.
UBS’ trial in France follows a similar judicial process in the US, where the bank in 2009 accepted to pay US$780 million in a settlement.
In Germany, UBS in 2014 agreed to a 300 million euro fine.
During the French investigation, UBS turned down a settlement offer of 1.1 billion euros made by the authorities.
The amount corresponded to what the Swiss bank had already paid as a court bond, judicial sources said.
Most of the trial’s first week would be spent on dealing with technicalities likely to be brought up by the defendants’ lawyers.
The investigation into UBS in the US began after UBS employee Bradley Birkenfeld revealed a scheme to funnel wealthy clients’ cash from the US to Switzerland bypassing the US tax officials.
Birkenfeld spoke separately to French investigators.
Even though he is not due to testify in court in Paris, he would attend the hearings.
The whistle-blower told reporters that he hoped for a stiff penalty for the Swiss bank.
“If they set an example with UBS, most other banks will be scared,” he said.
For money laundering, French criminal law lets judges enforce fines as high as half of the amount laundered. In the French case, prosecutors estimate that up to 10.6 billion euros was denied in taxes.
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