Newspaper article International Herald Tribune

French Court Steps Up Its Tax Inquiry at UBS ; Swiss Bank Is Suspected of Helping Clients Hide Their Wealth Abroad

Newspaper article International Herald Tribune

French Court Steps Up Its Tax Inquiry at UBS ; Swiss Bank Is Suspected of Helping Clients Hide Their Wealth Abroad

Article excerpt

A week after a local subsidiary was placed under investigation for allegations of assissting tax evaders, France said it will be looking into the activities of the parent company as well.

UBS, the biggest Swiss bank, is the target of a widening tax- evasion investigation in France, a spokeswoman for the Paris prosecutor's office said on Friday, an indication that the lender's problems with the French government are growing.

A French judge on Thursday placed UBS, the Swiss parent company, under formal investigation on suspicion that it illegally sold banking services to French citizens that helped them to set up secret accounts abroad, according to Agnes Thibault-Lecuivre, the spokeswoman for the Paris prosecutor's office. The bank was also declared an "assisted witness," a less serious status, in a concurrent investigation of suspected money laundering and tax evasion, she said.

The expanded inquiry comes just a week after the bank's local subsidiary, UBS France, was put under formal investigation on similar suspicions. In the French legal system, a formal investigation, sometimes compared with an indictment in the American system, can drag on for years, and does not necessarily lead to charges or trial. An assisted witness is required to answer prosecutors' questions with a lawyer present, but is thought less likely to ultimately face charges.

Yves Kaufmann Lobato, a UBS spokesman in Zurich, played down the significance of the latest development, noting that the investigation had been the subject of news reports since early last year.

"We will continue working with the authorities in France within the applicable legal framework to arrive at a resolution to this matter," he added, citing a statement by the bank.

The investigators are examining whether bankers from the Swiss parent company broke a French law against "illicit solicitation" by actively approaching potential clients in France.

According to a report on Friday in the French newspaper Le Monde, UBS bankers regularly sought to ingratiate themselves in networks of affluent people, mingling at sporting events and concerts to seek out possible clients for tax evasion. …

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