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UBS will appear in court once again in Paris on Wednesday. It’s about the tax dispute with France. At the end of 2021, the large bank was fined the equivalent of 1.74 billion francs before the appeals court. This includes approximately 800 million francs in compensation paid to the French state. Money that UBS transferred to an account that was already blocked.
This is significantly less than in the first case. In 2019, UBS was ordered to pay approximately 4.5 billion francs. But it was always clear that UBS would fight this French tax dispute to the last resort. Then and current UBS boss Sergio Ermotti quickly made this fight for justice in France a top priority; Losing was not allowed.
For this reason, UBS also appealed against the second decision to the Supreme Court, the highest court in France. UBS will now be heard on Wednesday. However, this is a very technical process because it is about whether the lower court applied the law correctly. No new facts or arguments will be discussed.
If the Supreme Court concludes that the lower court did not correctly apply the law or part of the law, this court of final instance may overturn or overturn UBS’s conviction in whole or in part. Anything overturned would have to be repeated later in an appellate court.
If the Supreme Court fully accepts the lower court’s decision, UBS’s only option will be to appeal to the European Court of Human Rights.
There’s a lot at stake for UBS next Wednesday, according to legal expert Peter V. Kunz: “Things can only get better for the bank. “UBS had a bad start during this period but then recovered.” This also has to do with a change in French jurisprudence, as UBS can actually hope for a reduction in penalties: “It is now only about the amount of tax evaded, and not about the amount of assets seized from the state, as before. tax authorities »
There is a significant difference as the assets are much higher than the taxes payable on them. The bank could even deal with an eventual conviction against UBS in its tax dispute with France today: “The criminal charge will probably remain with UBS,” Kunz said. “The chances of full acquittal are slim.” But this is a much smaller problem today than it was a decade ago. “Requirements for institutional investors have changed, and pension funds and teachers unions in the US are no longer as responsive.”
This also has to do with the fact that criminal convictions of major banks are now considered almost “bad”. This means that anyone who takes banks’ track records into account when making investment decisions could lose out on many returns. It seems like fewer and fewer institutional investors want to do without it.
The amount UBS has had to pay for legal cases in recent years (in francs):
If UBS’s case in the tax dispute actually goes to the lower court, then the bank could hope to have the penalty reduced again. The Supreme Court is expected to decide within a few weeks whether this will happen. The exciting question remains whether UBS will be able to recover some of the 1.1 billion franc deposit it has already paid, depending on the amount of the fine that the appeals court must re-determine.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
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