UBS faces French trial in long-running tax case


Reuters

UPDATE 2-UBS faces French trial in long-running tax case


* UBS set to face trial in French tax case
    * Legal investigation has lasted more than 5 years
    * Trial for tax fraud, money laundering -source

 (Updates with comment from French senate, details)
    By Joshua Franklin and Maya NikolaevaZURICH/PARIS, March 20 (Reuters) - UBS <UBSG.S> and its
French subsidiary face trial in France after a long-running
investigation into allegations that the Swiss bank helped
wealthy clients avoid taxes.
    France and other European Union countries have launched a
campaign to encourage taxpayers to come clean on previously
undeclared assets held abroad, and clamped down on aggressive
tax optimization techniques by multinational companies.
    "We will now have the possibility to respond in detail in a
court of law," UBS said in an emailed statement on Monday. "UBS
has made clear that the bank disagrees with the allegations,
assumptions and legal interpretations being made."
    French magistrates have ordered that UBS stand trial on
charges of aggravated tax fraud and money laundering as well as
illegally offering related services, a judicial source said.
    "This is an emblematic (decision) and a little comforting,"
 Eric Bocquet, lead author of an inquiry report on tax evasion
by the French Senate's finance committee, told Reuters.
    "But this is important to see how far it will go...You can't
negotiate with justice".
    Magistrates were expected this week to order a trial after
negotiations failed to produce a settlement in the long-running
probe into allegations UBS helped clients avoid taxes, Reuters
reported on Sunday. [nL5N1GW096]
    French newspaper JDD said UBS had rejected a 1.1 billion
euro ($1.18 billion) settlement proposed by prosecutors.
    The JDD quoted Markus Diethelm, UBS's group general counsel,
as saying a 1.1 billion euro payment was "unthinkable" and out
of line with similar settlements reached in other countries.
    UBS settled a tax case with German authorities in 2014 for
around 300 million euros.
    A UBS spokesman declined to comment on the trial date.
    French authorities are also investigating HSBC Holdings
<HSBA.L> and last year a source familiar with the matter said
the country's financial prosecutor asked for a trial of Europe's
biggest bank and its Swiss private banking unit over allegations
it helped customers dodge taxes in 2006-2007. [nP6N13I01Z]
    HSBC has admitted failings in controls at its Swiss private
bank, but has denied any knowledge of wrongdoing. Investigating
magistrates will decide on whether HSBC should stand trial.
    In a previous case that went to trial, a Paris court fined
Swiss private bank Reyl 1.875 million euros for helping former
French Budget Minister Jerome Cahuzac hide undeclared funds.
($1 = 0.9301 euros)

 (Additional reporting by Simon Carraud in Paris; Editing by
Michael Shields and Alexander Smith)
 ((joshua.franklin@thomsonreuters.com; +41583067007; Reuters
Messaging: joshua.franklin.thomsonreuters.com@reuters.net))

Keywords: FRANCE UBS GROUP/TAXAVOIDANCE (UPDATE 2)



This article appears in: Economy , Stocks , World Markets , Stocks
Referenced Symbols: HSBA , UBSG


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