UBS Slashes French Fine in Landmark Legal Battle
Swiss banking giant UBS has drawn a line under a long-running legal battle in France. Years of courtroom defiance against the French Republic have paid off – with a settlement far below the initial multi-billion-euro claims.
On Tuesday, UBS announced in a brief release that it has resolved its lingering legal liabilities in France through a settlement.
Under the agreement, UBS will pay the French state a fine of 730 million euros, along with 105 million euros in civil damages. The bank emphasized that these payments, which France’s cash-strapped treasury welcomes no doubt, are fully covered by existing provisions.
Epic Courtroom Battle in Paris
The case centered on allegations of unlawful client solicitation and money laundering related to tax evasion, with incidents dating back to 2004-2012.
The affair escalated into a near-epic legal confrontation, at one point leading to a record 4.5 billion euros penalty in a 2019 ruling. Throughout, UBS, guided by then-chief legal officer Markus Diethelm, took an unusually hard line.
2023: Conviction Upheld, Penalties Reconsidered
UBS also referenced the 2023 decision of France’s Court of Cassation, which upheld its conviction for unlawful client solicitation and aggravated money laundering.
However, the ruling sent the matter of fines and damages – then set at 1 billion euros and 800 million euros respectively – back to a lower court for reassessment.
Settlement at a Fraction of Early Demands
With the newly announced settlement, UBS eliminates a major legacy issue at significantly lower cost than most observers had expected.
Sometimes, pursuing the judicial process, or at least parts of it, pays off, even for global banks squaring off against sovereign states.
Question for Legal Debates
One hypothetical remains: would UBS have fared even better had it fought the case to the very end?
That counterfactual will provide plenty of food for thought in academic and legal circles — particularly among corporate and financial lawyers.
