UBS to post €1.1bn bail in French tax case

UBS will have to post €1.1bn bail to French investigators to cover a potential fine for alleged money laundering, after a court dismissed the Swiss bank’s appeal against the deposit.

The bail had been ordered in July this year when UBS was placed under formal investigation after previous settlement talks broke down.

The French probe is one of a number of investigations into UBS’s cross-border wealth management business. In July, the lender paid €300m to settle an investigation by authorities in Bochum into whether it helped German clients evade taxes.

“UBS is very disappointed at the decision which fails to take into account the arguments put forward at the hearing,” the bank said in a statement.

Switzerland’s largest lender by assets plans to appeal against the decision at the French Supreme Court and also wants to challenge the judicial process at the European Court of Human Rights.

UBS again criticised the investigation as a “highly politicised process”.

France’s banking regulator fined UBS’ French unit €10m last year and reprimanded it for control lapses that may have enabled some clients to evade taxes.

This year, settlement talks with French authorities and the Swiss bank over an at least €50m fine for the alleged laundering of proceeds from tax fraud suddenly collapsed, only weeks after French lender BNP Paribas paid a $8.9bn fine in the US for sanctions violations.

François Hollande, the French president, has stepped up efforts to crack down on tax fraud after his former budget minister was forced to resign in the wake of a scandal over his secret Swiss account.