UBS goes on trial in France over alleged tax fraud

UBS’s trial in France follows a similar judicial process in the US where the bank accepted in 2009 to pay $780 million in a settlement. (AFP)
Updated 08 October 2018

UBS goes on trial in France over alleged tax fraud

  • The largest Swiss bank risks fines of up to €5 billion
  • The bank intends to stand its ground in court

PARIS: Swiss bank UBS Group , its French unit and six top executives go on trial on Monday after a long-running investigation into allegations they helped wealthy clients avoid taxes in France.
After years of investigation and aborted settlement negotiations, UBS faces charges of aggravated tax fraud and money laundering as well as illegally soliciting clients in France.
The largest Swiss bank risks fines of up to €5 billion ($5.76 billion).
The bank intends to stand its ground in court. “After more than six years of legal proceedings, we will finally have the opportunity to respond to the often-unfounded allegations,” it said on Friday.
Banks became more rigorous after the 2008 financial crisis, a series of financial scandals at some of the world’s biggest banks and the imposition of tighter regulations, analysts say.
UBS’s trial in France follows a similar judicial process in the United States where the bank accepted in 2009 to pay $780 million in a settlement. In Germany, UBS agreed to a 300 million euro fine in 2014.
During the French investigation, UBS turned down a settlement offer of €1.1 billion made by the authorities. The amount corresponded to what the Swiss bank had already paid as a court bond, according to judicial sources.
Most of the trial’s first week will be spent on dealing with technicalities likely to be brought up by the defendants’ lawyers.
The investigation into UBS in the US began after UBS employee Bradley Birkenfeld revealed a scheme to funnel wealthy customers’ cash from the United States to Switzerland bypassing the US taxman.
Birkenfeld spoke separately to French investigators. Even though he is not due to testify in court in Paris he will attend the hearings.
The whistleblower told Reuters that he hoped for a stiff penalty for the Swiss bank. “If they set an example with UBS, most other banks will be scared,” he said.
For money laundering, French criminal law lets judges enforce fines as high as half of the amount laundered. In the French case, prosecutors estimate that up to €10.6 billion was denied to the taxman.


Japan’s capital sees prices fall most in over 8 years as COVID-19 pain persists

Updated 7 min 23 sec ago

Japan’s capital sees prices fall most in over 8 years as COVID-19 pain persists

  • Tokyo core CPI marks biggest annual drop since May 2012
  • Data suggests nationwide consumer prices to stay weak

* Nov Tokyo core CPI -0.7% yr/yr, matches forecast
* Tokyo core CPI marks biggest annual drop since May 2012
* Data suggests nationwide consumer prices to stay weak (Adds analyst quote, background)
By Leika Kihara
TOKYO, Nov 27 : Core consumer prices in Tokyo suffered their biggest annual drop in more than eight years, data showed on Friday, an indication the hit to consumption from the coronavirus crisis continued to heap deflationary pressure on the economy.
The data, which is considered a leading indicator of nationwide price trends, reinforces market expectations that inflation will remain distant from the Bank of Japan’s 2% target for the foreseeable future.
“Consumer prices will continue to hover on a weak note as any economic recovery will be moderate,” said Dai-ichi Life Research Institute, which expects nationwide core consumer prices to fall 0.5% in the fiscal year ending March 2021.
The core consumer price index (CPI) for Japan’s capital, which includes oil products but excludes fresh food prices, fell 0.7% in November from a year earlier, government data showed, matching a median market forecast.
It followed a 0.5% drop in October and marked the biggest annual drop since May 2012, underscoring the challenge policymakers face in battling headwinds to growth from COVID-19.
The slump in fuel costs and the impact of a government campaign offering discounts to domestic travel weighed on Tokyo consumer prices, the data showed.
Japan’s economy expanded in July-September from a record post-war slump in the second quarter, when lockdown measures to prevent the spread of the virus cooled consumption and paralyzed business activity.
Analysts, however, expect any recovery to be modest with a resurgence in global and domestic infections clouding the outlook, keeping pressure on policymakers to maintain or even ramp up stimulus.