6 Oct 2014
UBS has lashed out at French authorities investigating whether it helped wealthy French clients avoid tax, following reports that the bank could face a fine of up to almost € 5bn if the long-running probe were to lead to charges followed by a trial and a conviction .
"As we have said previously, the base for any calculations in this matter are completely artificial, speculative and not based on facts," the Swiss bank said in a statement on Friday.
"We can not control the irresponsible disclosure of confidential documents or their selective interpretation. This matter is currently still in the stage of a formal investigation and we will continue to defend ourselves strongly."
French authorities have been probing the activities of Switzerland's largest bank for more than a year. In mid-2013 they placed both UBS AG and its French unit under formal examination for alleged complicity in having illicitly solicited clients on French territory.
In July, following the collapse of settlement talks, they placed UBS AG under formal examination with respect to the potential charges of laundering the proceeds of tax fraud.
Last month, after losing an appeal against a bail charge, UBS was also forced to post a bail payment relating to the case worth € 1.1bn, which it denounced as part of a "highly politicized process".
UBS will appeal against the bail decision at the French Supreme Court and has stressed that it has "taken significant and broad steps to ensure tax compliance of our clients and will continue to do so".
The French investigative news website Media part and Swiss newspaper Le Temps reported they had seen court documents drawn up by two judges investigating the case that showed the bail payment was calculated on the basis of a potential maximum fine of € 4.88bn.
A spokesman for the court told the Financial Times it could not confirm the contents of the document.
Stung by revelations more than a year ago that the former budget minister charged with tackling tax evasion held € 600,000 in a secret Swiss bank account, the government of Francois Holland has been keen to take a tough line on tax offenses.
As well as the case against UBS, it has worked with the Swiss authorities to crack down more broadly on French citizens holding bank accounts in Switzerland that have been beyond the reach of the French taxman.
The campaign, which also extends to other territories, has become an important part of France's efforts to reduce its budget deficit. Earlier this year the government said it hoped to recover more than € 2bn from individual tax evaders this year.
But this would pale in comparison to the size of the apparent potential fine that UBS could now face if it were sent for trial and ultimately found guilty, a sum that would represent a dramatic escalation of the long-running case.
Before negotiations broke down this summer - shortly after US authorities had levied an $ 8.9bn fine on BNP Paribas, France's flagship bank - the French authorities and UBS were discussing a settlement than would have cost UBS close to € 100m.
Shares in UBS were down 1.5 per cent at SFr16.08 in midday trading in Zurich.
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