) is under probe by the Belgium regulators over doubt surrounding
money laundering and illegal activities related to tax evasion. The
regulators are scrutinizing foreign activities of Switzerland's
largest bank by assets. Notably, Belgium has become the latest
European country to investigate UBS AG's actions.
Being unaware of the investigation, which has been initiated over
the Belgium unit since the end of last year by the prosecutors, the
bank was not in a position to comment. However, UBS AG has
confirmed its operation to be fully in compliance with relevant
laws and regulations. Moreover, the bank denied its involvement in
any activities that would aid its clients to evade their tax
The current probe is not new to the bank. Previously, UBS AG has
been under the scrutiny of other European countries' regulators for
its foreign operations.
Last year, the French unit of UBS AG was under the French
authorities' probe, which accused the bank of opening clients'
accounts for evading taxes. The German unit of the bank was also
under scrutiny in 2012 for the same issue.
However, UBS AG declined the allegations then stating that since
2009 its business has been under strict vigilance and the bank is
fully abiding by the laws. Notably, the Swiss bank paid $780
million in 2009 to regulators as settlement related to U.S.
criminal and civil investigation and acknowledged that it had
helped clients evade taxes.
Following UBS AG's settlement, two other Swiss banks, Wegelin &
Co. and Liechtensteinische Landesbank AG paid settlement charges of
roughly $74 million and $24 million, respectively.
UBS AG is not the only Swiss bank to be involved in such issues. In
Credit Suisse Group AG
) pleaded guilty to criminal charges of assisting its U.S. clients
to evade tax. The company will also shell out $2.8 billion as
settlement charges to the U.S. authorities. The plea agreement
revealed that Credit Suisse in several ways aided U.S. clients in
hiding their undeclared accounts from the Internal Revenue Service
(IRS), which includes helping clients to use false entities,
destruction of account information forwarded to the U.S. and
avoiding currency transaction reporting requirements by structuring
Notably, the Swiss units of big Wall Street players like
The Goldman Sachs Group, Inc.
) have consented to cooperate with the Department of Justice (DOJ)
regarding the ongoing probe into their alleged involvement in tax
evasion practices. It must be mentioned that negligence relating to
such critical rules is unacceptable since these issues can give
rise to dire consequences.
We believe that ongoing investigations on banks will be a step
forward toward reducing the huge losses incurred due to offshore
tax evasion. Regulatory authorities are investigating scandals and
are determined to put forward a landmark judgment to terminate such
shrewd practices in the future, bring justice to the sufferers and
punish the wrongdoers.
UBS AG currently holds a Zacks Rank #3 (Hold).
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