Europe court upholds French bond for UBS in tax fraud case

2 min

Strasbourg (France) (AFP)

The European Court of Human Rights on Thursday rejected a challenge by Swiss bank UBS to a 1.1 billion euro ($1.24 billion) bond set by French judges over a wide-ranging tax fraud case.

UBS had argued before the ECHR that the record-setting bond, a guarantee against an eventual fine upon conviction, violated its right to the presumption of innocence.

But the court, which normally hears complaints from individuals, ruled that the bond was "an interim measure which did not prejudge the outcome of the proceedings," it said in a statement.

It said its ruling was unanimous and "final" against UBS and its French subsidiary UBS France, which face charges of orchestrating a vast system of tax fraud in France.

They are accused of setting up dual accounts to hide the movement of capital into Switzerland between 2004 and 2011.

The bond was set in July 2014 on the basis that the alleged tax fraud had cost French state coffers an estimated 10 billion euros.

The ECHR ruling stressed "the growing and legitimate concern both in Europe and internationally in relation to financial offences, which constituted socially unacceptable behaviour, and the difficulty of combating such offences."

UBS turned to the ECHR in June 2015 after exhausting efforts in France to reduce the bail amount.

In June last year, French prosecutors recommended that UBS face trial for "aggravated laundering of tax fraud proceeds" while its French branch be judged for complicity in these crimes.

France opened a probe into UBS after former employees blew the whistle over the bank's alleged system of setting up dual accounts to hide the movement of capital into Switzerland between 2004 and 2012.

The bank's employees allegedly approached French clients, from wealthy businessmen to sports stars, during receptions, golf tournaments or concerts to convince them to hide their money in Switzerland.