Newspaper article International New York Times

Formal Inquiry by France Prompts a UBS Objection

Newspaper article International New York Times

Formal Inquiry by France Prompts a UBS Objection

Article excerpt

The Swiss bank criticized the decision of French prosecutors to place it under formal investigation for allegedly helping French clients evade taxes.

UBS, the biggest Swiss bank, on Thursday sounded a combative note, criticizing the decision of prosecutors in France to place it under formal investigation for allegedly helping French clients evade taxes.

The bank also said the government's bail demands were excessive.

Prosecutors told UBS on Wednesday that it was being investigated on charges of money laundering and tax fraud, accused of helping French clients hide funds from the national tax administration from 2004 to 2012.

The bank was ordered to post bail of 1.1 billion euros, or about $1.5 billion, by Sept 30.

"We will continue to defend our case strongly," Serge Steiner, a UBS spokesman in Zurich, said. "If in the end we end up in a court, we're ready," he added. "We have been cooperating with the authorities trying to resolve this for quite a long time."

Mr. Steiner said the amount the French authorities had demanded was "unprecedented and unwarranted." He added, "We consider both the legal basis for the bail amount and the method of calculation to be deeply flawed and will appeal."

The appeals process would probably take several months to run its course, he said.

Like other Swiss banks, UBS has found its activities under intense scrutiny from other governments. The bank in 2009 paid $780 million to settle United States charges that it had helped Americans evade taxes. The French authorities have been poring over UBS's activities in France since 2012, helped by information provided by a whistleblower.

The bank is also the subject of continuing investigations in Germany and Belgium.

Last year, the bank's French unit and the parent, UBS AG, were placed under formal investigation over allegations that it illegally sold banking services to French citizens to enable them to move money offshore. …

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