PARIS: UBS is fighting a bitter battle in France over hidden offshore accounts. Now, French officials have found a new and untested way to extract millions from the Swiss bank.
Zurich-based UBS is going as far as the European Court of Human Rights in Strasbourg to defend itself against the accusations: tax investigators in France have charged the bank with devising a complicated scheme for billion of euros to avoid taxes through clandestine transactions up until 2012.
The bank already had to cough up 1.3 billion euros as a so-called caution payment in 2014, and observers estimate the bank may have to pay as much as 6 billion euros to ultimately set aside the case.
UBS has defended itself vigorously, not least because an admission of wrong-doing would have far-reaching consequences for the bank’s international wealth management operations.French officials appear to be looking for a way out of the imbroglio, French newspaper «Les Echos» reports – by borrowing a page from the playbook of their American colleagues.
Specifically, French officials want to test a recently-introduced legal procedure on UBS for the first time. The method, called «convention judiciaire d’intérêt public» or CJIP, can be used in cases of corruption, tax fraud or money-laundering and allows firms to reach regulatory settlements without the risk of a court trial or admitting any wrong-doing.
France’s CJIP resembles American deferred prosecution agreements, or DPAs, which were widely used in a crackdown by U.S. justice officials on Swiss banks which helped wealthy Americans cheat on their taxes. If firms under criminal investigation fulfill certain requirements under its DPA and remains clean for a certain period of time, criminal charges are dropped.
The newspaper reported both sides have taken up negotiations over a CJIP to set aside the French charges. If the French investigation is one of UBS’ biggest remaining legal headaches, French officials have nearly as much at stake, with the fate of a high-profile and lucrative case resting in a novel and untested legal procedure.
