Brenna Hughes Neghaiwi

ZURICH (Reuters), French judges will decide Monday whether to reverse a record 4.5 Billion Euro ($5.1 Billion) penalty against Swiss bank UBS. The fine was imposed for allegedly aiding wealthy clients to hide offshore assets.

To see whether it indicates a more aggressive European position, banks are watching the case closely. Although fines in Europe have historically been less severe than the United States for other tax offenses, UBS penalties are a notable exception.

Paris’s appeals court will decide whether or not to adjust the sanction against Switzerland’s largest lender. This penalty was originally imposed in 2019 after an initial trial.

UBS appealed the conviction that it was found guilty of soliciting illegally at French sporting events, parties and laundering tax evasion proceeds.

UBS lawyers argued that, despite the whistleblowers’ coming forward, there was no evidence to support UBS commercial experts trying to solicit French customers.

Bank wants to throw out the accusations. They also claimed that the fine inflicted was too high.

In the appeals trial, the prosecutor said they will seek a maximum fine of two billion euros. The French state wants 1 billion euros for damages. Total penalties could reach 3 billion euros.

For any possible penalty, the bank will set aside 450 millions euros.

Because of illness, one of the magistrates delayed the appeals court’s ruling until September. The case verdict can also be appealed to France’s Supreme Court.

A European record-breaking fine was imposed in the French case. UBS, on the other hand, settled in November an instance of tax evasion in Belgium with a 49 million euro penalty

French judges in 2019 UBS also set a precedent in Switzerland for seeking information from Swiss banks. But, they claimed that this information was only used to pursue tax-evaders and not against the bank.

($1 = 0.8866 euros)