Analysis
14 July 2019

UBS conviction: lessons learned from the decision that made France a “B” – as in Billions – country

Bastille Day Newsletter 2019 - Enforcement / Court Decisions

 

On February 20, 2019, the Swiss company UBS AG, its French subsidiary and five former representatives was sentenced by the Paris Criminal court (Tribunal Correctionnel) to a 3.7 billion euros fine and to 800 million euros in damages to the French State for unauthorized banking solicitation, aggravated tax fraud and money laundering1 (UBS AG had neither the authorization to prospect, nor to exercise banking activities in France) but also for tax fraud2 and aggravated money laundering3 for having organized illicit transfers from Swiss undeclared accounts to offshore accounts between 2004 and 2012. UBSF was prosecuted in parallel proceedings as an accessory to both offenses.

The proof that a settled agreement is always the best strategy?

Although not reflected in the Paris Tribunal decision, UBS previously entered discussions with the National Financial Prosecutor4 (“PNF”) to explore a negotiated alternative with a Convention Judiciaire d’Intérêt Public (“CJIP”).

Indeed, UBS was offered a CJIP that would have requested the company to pay an amount in the ballpark of 1 billion euros in return for a monitoring period followed by the probable dismissal of all charges.

This offer was considered as an excessive financial burden by UBS who rejected it. The choice to leave it to the courts results in a considerably higher payout, a staggering financial loss for the bank, raising the question of the judicial strategy that prosecuted companies should adopt in such cases.

The UBS case is a signal that the French authorities – and the PNF in particular – intend to show a more hardline approach that has a real impact on companies that violate French law.

However, it would be a mistake to conclude that this decision shows that companies should always accept a CJIP. By opting to refuse the CJIP, UBS took a risk, but chose to let the legal debate run its course.

If the prosecution’s narrative can be challenged, the trial could be the better solution. The decision to opt for one or the other needs to be taken after weighing the pros and cons. In the process of a cooperation with the authorities for instance, defendants have no guarantee that the documents and information communicated will not be used at a later stage, in case of failure of the CJIP.

Either way, criminal trials will always be subject to uncertainty. UBS counsel has appealed the trial decision.

Related content

Analysis
6 May 2024
Overview of the future European Anti-Money Laundering Authority
The new Authority for Anti-Money Laundering and Countering the Financing of Terrorism will be based in Frankfurt and shall start...
Publication
27 February 2024
New sustainability reporting obligations in France: what’s new?
Navacelle contributes to The Legal Industry Reviews' fifth edition about the transposition of the Corporate Sustainability Reporting Directive (CSRD) in...
Publication
The discreet ramping up of environmental criminal law
5 December 2023
The discreet ramping up of environmental criminal law
Navacelle contributes to The Legal Industry Reviews' fourth edition about recent gradual application of environmental criminal law in France, with...
Press review
24 May 2024
Press review – Week of 20 May 2024
This week, the press review covers the fine imposed on bank company N26, the trial of EDF and its former...
Press review
17 May 2024
Press review – Week of 13 May 2024
This week, the press review covers the death of Renaud Van Ruymbeke, the conviction of former Mayor of Toulon for...
Event
16 May 2024
Anticorruption initiatives in Latin America: Lessons from the last decade (webinar)
To contribute to the Latin America and Caribbean Weeks event, organised by the French Ministry of Europe and Foreign Affairs...
Publication
14 May 2024
LIR 6th Edition : Focus on ADP INGENIERIE and SEVES Group/SEDIVER CJIPs
Navacelle contributes to The Legal Industry Reviews' sixth edition, focusing on the last two CJIPs (kind of French DPAs) concluded....
Press review
3 May 2024
Press review – Week of 29 April 2024
This week's press review focuses on the indictments of Arnaud Lagardère for misuse of company assets and abuse of power,...
Press review
26 April 2024
Press review – Week of 22 April 2024
This week, the press review covers the European Parliament’s adoption of the Corporate Sustainability Due Diligence Directive, the definitive conviction...
Video
25 April 2024
Webinar: Economic Sanctions Law – Similarities and Differences between the U.S. and French Approach
Roxane Castro has been invited by the Philadelphia Chapter of the French American Chamber of Commerce (FACC Philadelphia) and Buchanan...
Analysis
22 April 2024
Focus on the CJIPs respectively concluded at the end 2023 by ADP Ingénierie and SEVES...
By approving the CJIPs signed between the National financial prosecutor’s office (procureur national financier - PNF) as well as ADP...
Press review
19 April 2024
Press review – Week of 15 April 2024
This week, the press review covers the publication of TRACFIN’s 2023 report on professionals’ suspicious transaction reports, the decision of...
Analysis
16 April 2024
The AFA’s new practical guide to corporate sponsorship operations
On 26 March 2024, the French Anti-Corruption Agency (“AFA”) published its new practical guide to securing patronage and sponsorship operations.
Analysis
16 April 2024
Overview of the “anti-gift” procedure applicable to actors operating in the health sector in the...
The “anti-gift” procedure provided by the French public health code prohibits actors operating in the health sector, except for some...