The settlement, while hefty, represents only a fraction of what the French state was originally claiming.
The settlement, while hefty, represents only a fraction of what the French state was originally claiming.
Zurich-headquartered UBS – no stranger to litigation in multiple jurisdictions following its Swiss-government-mandated 2023 purchase of erstwhile rival Credit Suisse – has agreed to pay EUR 835 million to the French state, drawing a line under a protracted tax and money-laundering case that has dogged the Swiss lender for more than a decade. The settlement, announced on 23 September, comprises a EUR 730 million fine and EUR 105 million in damages. UBS confirmed that it was fully provisioned for the payment, ensuring no further financial impact on its balance sheet.
The dispute centred on UBS’s cross-border business with French clients between 2004 and 2012. Prosecutors alleged that the bank unlawfully solicited wealthy clients in France to move funds to Swiss accounts, enabling tax evasion. They also pursued charges of aggravated money laundering for handling undeclared assets.
The case made its debut in a Paris courtroom in 2019, culminating in one of the heaviest financial penalties ever imposed on a bank in France. UBS was fined EUR 3.7 billion and ordered to pay EUR 800 million in damages to the French state, resulting in an immediate appeal, with the bank labelling the ruling “unfounded” and arguing that it had not broken French law.
In December 2021, the Paris Court of Appeal reduced the total liability, cutting the fine to EUR 3.75 million while lowering damages to EUR 1 billion. UBS nevertheless pressed ahead with further appeals, maintaining that the evidence did not support such punitive sanctions.
The case reached the Cour de cassation in 2023, with mixed results. The court confirmed the underlying criminal findings of unlawful client solicitation and aggravated money laundering but overturned the financial penalties, remitting the case to the Paris Court of Appeal for reassessment. This decision created uncertainty over the ultimate size of the penalty and prolonged the dispute so, rather than continuing with years of further litigation, UBS opted to enter negotiations with French authorities to resolve the matter definitively. The result was this week’s EUR 835 million settlement, representing less than one-fifth of the original EUR 4.5 billion penalty imposed in 2019 – so, not insubstantial, but still a positive outcome for the bank under the circumstances.
UBS said in a statement that the agreement “resolves all outstanding matters relating to the legacy French cross-border business” and allows the bank to move forward.
Nevertheless, the Supreme Court’s 2023 ruling means that the criminal findings against UBS stand. The settlement resolves only the financial aspects of the dispute, leaving the historic reputational damage intact.
For France, the outcome secures a substantial recovery and reaffirms the state’s determination to pursue aggressive enforcement against banks implicated in tax evasion.
UBS’s payment will now be finalised, closing a case that has spanned over a decade, involved three levels of French courts, and reshaped the debate over the responsibilities of international banks in policing cross-border wealth management.