France’s banking regulator has fined Swiss bank UBS’s French unit €10 million (CHF12.2 million) for «suspected illicit sales», insufficiencies in controls and compliance with French clients. The bank says it will appeal.
UBS’s French unit has been put under formal investigation in Paris for alleged complicity in suspected illegal business practices in France. It is being investigated by the French judiciary, which opened a procedure in April 2012, on whether it offered potential French clients investments that were allegedly designed to evade taxes.
The Autorité de contôle prudentiel (ACP), the Bank of France’s regulatory arm, said it had been alerted to parallel accounts that ran between 2002 and 2007 which were not declared in France.
The ACP said on Wednesday that UBS had been «lax» in taking corrective measures, adding that the management «had waited 18 months to put in controls to rectify this trans-border activity».
Appeal
The bank protested at what it said was a disproportionate fine. It also evoked «the contentious nature of the decision» and said it would lodge an appeal before the Council of State, which acts as the top court for administrative justice.
«We disagree with many of the disciplinary commission’s conclusions. UBS does not tolerate any activities intended to help its clients circumvent their tax obligations,» the Zurich-based bank told Bloomberg News in an emailed statement on Wednesday.
This is an issue from the past and we are pleased to note that the disciplinary commission acknowledges in its report that UBS France has taken appropriate steps to strengthen its compliance framework since 2009,« the bank said.
»UBS France has operated under a new leadership since 2012 and has continuously strengthened its rules and processes. UBS France has the fullest support of its parent company.«
Minister’s undeclared account
French tax investigators last year searched UBS offices in various cities including Strasbourg, Lyon and Paris. Three individuals were also put under formal investigation last year.
Cash-strapped governments around the world are cracking down on tax evasion and money laundering in the wake of the financial crisis.
The issue took on particular importance in France after former budget minister Jérôme Cahuzac quit over allegations that he had an undeclared Swiss bank account, which he later acknowledged.