UBS Group AG (USA): A New Turn in the French Tax Case
Tax evasion cases have been mounting on UBS Group’s balance sheet; it recently got some hope from the European Court of Human Rights
(NYSE:UBS) announced today that its decision, to challenge the French court’s rulings about the tax evasion case, has been accepted at the European Court of Human Rights (ECHR). In 2014, the bank was placed under an investigation by the French authorities, and was made to provide $1.2 billion related to the lawsuit.
UBS challenged the decision in France’s appeal court and the French Supreme Court; however, they both rejected the appeal. The appeal has now been accepted by the ECHR. The bank’s annual report was published today, wherein this case’s details were mentioned.
The bank was not satisfied by the French authorities’ decisions on the case, and was looking forward to challenge it; it has now received the response it desired and awaited. Earlier this year, the bank’s French unit also paid a 10-million euro bail, following a formal investigation into its operations.
According to Bloomberg, the court has confirmed that it received UBS’ application in June, last year. The case was concluded last month after running for 19 months. The bank was accused of aiding clients in hiding funds from tax authorities for the period 2004-2012. It is yet to be determined by the judges whether the case will go to trial or not.
UBS regarded the deal as highly politicized, after France ordered it to post a bond of $1.1 billion. Currently, the bank is contesting on different aspects of this ruling. Business Finance News believes that the political influence felt during the case proceedings can be linked to the fact that the French government strengthened its efforts against tax evasion, after the former French budget minister’s secret Swiss account was exposed.
The consequences of this case can be much more far-reaching than previously realized. They may be required to receive a waiver from the US Labor Department, before starting to manage funds again in the US. The Labor Department came under immense pressure after it granted waivers to some institutions, which were found to be involved in crimes.
Another inquiry was started last month in Belgium to see whether UBS was involved in similar tax evasion activities or not. In Credit Suisse’s case, it had to wait about 18 months before it received a waiver from the Labor Department, after being found guilty in a tax evasion case in May 2014.
