Sky-high fines were drastically reduced by 80%, and UBS (UBS.US) settled French tax evasion lawsuits by 835 million euros

The Zhitong Finance App learned that UBS (UBS.US) reached a settlement on a long-standing legal dispute to assist French citizens in tax evasion and agreed to pay 835 million euros in fines and compensation, less than one-fifth of the initial fine. The case has now officially come to an end.

The Swiss bank announced on Tuesday that it will pay 730 million euros in fines and 105 million euros in civil compensation to the French government to settle related charges from 2004 to 2012. Compared to the sky-high €4.5 billion fine initially decided in 2019 — setting the record for the highest fine in a criminal case at the time, the final amount of compensation was drastically reduced.

Previously, UBS had been found to be in violation of the law: it had secretly sent bank staff to France to lobby potential customers to transfer funds abroad to evade taxes. Such actions are similar to the group's previous irregularities in the US and elsewhere. Currently, UBS is still dealing with a range of legal issues, including cases left over from the acquisition of Credit Suisse in 2023. The group said it has made full reserves for this fine.

The legal tug-of-war in the French tax evasion case has continued for more than 10 years, and UBS has always been committed to reducing high penalties. Previously, the group had pushed to keep the settlement amount below 300 million euros — a figure based on its reimbursement standards for handling similar cases in Germany.

UBS said in a statement: “The French Supreme Court has finally confirmed the Paris Court of Appeal's previous ruling, finding that UBS illegally solicited customers and serious money laundering, but sent back the right to approve the amount of the fine and the amount of civil compensation to a lower court for retrial.”

In another related case, UBS's former French subsidiary was found guilty in March of this year. The subsidiary is accused of harassing two whistleblowers, and the two whistleblowers previously revealed acts related to UBS assisting wealthy French people in tax evasion.

Furthermore, in August of this year, UBS also reached a settlement with the US Department of Justice, agreeing to pay 300 million US dollars in compensation for cases involving mortgage-backed securities by Credit Suisse. It is worth mentioning that in 2023, UBS paid the US $1.44 billion in settlement to resolve its own long-standing legal dispute involving similar mortgage-backed securities.