French court reduces UBS fine to 1.8 billion euros

UBS bank was ordered by an appeals court in France to pay 1.8 billion euros ($11.4 billion) for helping wealthy customers evade taxes, less than half the fine the Swiss bank initially faced in a lawsuit. which disturbed the creditor for seven years.

After several adjournments of the case, a judge at the Paris appeals court announced the length of the sentence on Monday afternoon.

UBS was found guilty in 2019 of helping wealthy clients avoid paying taxes after a historic trial in Paris. The court also ordered the bank to pay a record €3.7 billion (£23.5 billion) fine and a further €800 million (£5 billion) in damages, a penalty the bank has appealed.

The fine ordered by the French appeals court on Monday consists of €800 million in civil damages and a €1 billion confiscation order (R$6.3 billion). UBS has five days to appeal the decision and take it to the highest court in France.

“The bank takes note of this decision,” said Hervé Temime, a lawyer representing UBS. “Compared to the lower court decision, there is a financial gain of 2.7 billion euros (BRL 17.28 billion), but it is a criminal conviction and therefore we will make our decision very quickly.”

The 2019 decision was the culmination of a seven-year investigation by French authorities, who accused the bank of using James Bond tactics to illegally lure clients and help them launder money.
Prosecutors said UBS bankers had used self-erasing hard drives, business cards without logos and evasive tactics to move around France in secret and illegally recruit clients at corporate events.

Whistleblowers claimed that UBS bankers attracted clients at operas, hunting tours and the French Open tennis tournament.

UBS said its bankers went to France and participated in social events, but promoters had no evidence of client attraction.

At the time, the bank’s chief executive, Sergio Ermotti, described the “superficial nature of the verdict [como] surprising” in a memo to employees.

The case was a blemish on Ermotti’s nine-year record at the helm of UBS and has upset his successor, Ralph Hamers, who took over last year.

After appealing the original fine, UBS set aside just 450 million euros (BRL 2.8 billion) in provisions to cover legal costs associated with the case.

During the appeal, French authorities reduced the amount they were demanding to a maximum of 3.2 billion euros (BRL 20.48 billion), consisting of 2.2 billion euros (BRL 13.9 billion) in fine and up to 1 billion in civil damages.

Earlier this year, UBS tried to overturn the original decision on constitutional terms, but a French court rejected the challenge.

The French penalty followed similar tax judgments against UBS in the United States, where the bank was ordered to pay $78 million (R$432.9 million) in 2009, and in Germany, where it was exposed to a fine of 300 million euros (R$1.9 billion) in 2014. A parallel case in Belgium was resolved last month, with UBS agreeing to pay 49 million euros (R$313.6 million).

UBS shares jumped nearly 3% after the latest decision was announced.

Translated by Luiz Roberto Gonçalves