Swiss Said to Send Data on UBS French Client Accounts
UBS AG (UBSN), the Swiss bank facing French allegations of helping clients evade taxes, has handed over details on about 100 accounts, according to a person with knowledge of the matter.
Swiss authorities at the start of the year notified UBS of a request from France for information on 300 suspected tax evaders, said the person who asked not to be identified because the details of the request are confidential. The bank turned over account details for about a third of the people to Swiss tax officials who decided to pass the data along to French authorities, the person said. The person said UBS found no accounts under the other 200 or so names.
Andreas Kessler, a spokesman for UBS contacted by phone yesterday, would not comment on whether it had received a request for account information from France.
UBS is under investigation in France on allegations of money laundering and of illegally soliciting clients. Prosecutors estimate the bank hid about 9.8 billion euros ($12.4 billion) for French taxpayers, with a possible fine of half that amount, or 4.9 billion euros, people with knowledge of the case said last month. The potential French fine dwarfs earlier payments made by Swiss banks to settle similar probes in the U.S.
The bank, based in Zurich, last month paid a 1.1 billion-euro bail against potential penalties in the case after losing an appeal against the bond request.
“From UBS’s perspective this isn’t dramatic,” Maurice Pedergnana, a professor at the Institute of Financial Services in Zug, Switzerland, said about the French request for account information. The number of clients affected isn’t very high, he said.
Clients Appeal
The Swiss newspaper Neue Zuercher Zeitung reported earlier today that information on about 100 UBS clients was sent to France. Beat Furrer, a spokesman for the Swiss Federal Tax Administration, would not discuss the motive for the request or the number of accounts concerned. All “affected clients have been been notified,” he said in an e-mail.
The Swiss Federal Administrative Court so far has received 10 appeals from clients whose data was to be passed on to the French authorities, Rocco Maglio, a spokesman for the court, said by phone today. One appeal was withdrawn and decisions on the remaining nine are pending.
France’s bulk demand for bank data became possible after Switzerland relaxed its decades-old bank secrecy laws after the financial crisis prompted an international crackdown on tax evasion. Earlier this year, the country turned over account details on three French soccer players, also cases involving UBS accounts.
French President Francois Hollande stepped up efforts to fight tax evaders after a former budget minister resigned in March 2013 amid allegations he had a secret Swiss bank account.
Record Penalty
In 2009, UBS turned over information on about 4,700 Swiss accounts to the U.S. and paid a $780 million fine to settle allegations it helped Americans evade taxes. In May, the U.S. fined Credit Suisse Group AG (CSGN) $2.6 billion after its Swiss bank pleaded guilty to helping Americans evade taxes. The Justice Department said at the time that it was the biggest penalty in a criminal tax evasion case.
Swiss law prohibits banks from transmitting information about their clients to a third party unless it’s in connection with suspected tax fraud or other criminal proceedings. While tax evasion is not a criminal offense in Switzerland, the country abandoned the distinction between tax fraud and tax evasion for disclosure purposes after coming under international pressure for more transparency, especially after the U.S. case.
