Swiss wealth manager UBS has only set aside €450m (£383m, $509m) for its €4.5bn tax evasion fine in France.
The firm said, in its end of year results: “Notwithstanding the strength of our legal arguments and the lack of evidence to support the charges, we have increased the provision for this matter to a total of €450m.
“Under the accounting standard, we are required to judge if an outflow is probable and to estimate the extent of such an outflow considering a wide range of outcomes.
“In light of the first judgement and considering the full range of potential final decisions, the provision on our balance sheet reflects our best estimate of possible financial implications.
“That said, we still believe the verdict should be reversed, at which time we would release the provision.”
The bank added that all provisions made are “appropriate under the applicable accounting standard”.
Between 2004 and 2012, it is accused of illegally concealing assets worth €10bn in Switzerland on behalf of French clients.
UBS said after the verdict that there were “significant flaws” in the French judges’ decision to find it guilty of aggravated money laundering and illegal bank soliciting.
Issues with the case
The case is reportedly based on accusations that UBS sent employees to solicit wealthy executives and athletes at sport or music events in France, urging them to place their money in Switzerland.
The Zurich-based bank was hit with a €4.5bn fine, which it is appealing.
It includes a €3.7bn penalty for UBS AG, a €15m fine against UBS (France) and civil damages worth €800m.
It said the charges were around three specific types of unpaid taxes (income tax, wealth tax and corporate tax).
“We are confident in our legal position, and contesting these cases has also allowed us to present our arguments to stakeholders publicly,” UBS said. “We strongly disagree with the verdict in France.
“UBS respected and followed its obligations under Swiss and French law, as well as the European Savings Tax Directive.
“The judgement is not supported by the facts. For example, no evidence was provided that any French client was solicited on French soil by a UBS AG client adviser to open an account in Switzerland.
“This is acknowledged by the decision itself. Even assuming liability, which we contest, the calculation of the fine and the damages are, in our view, inconsistent and not in line with applicable law.
“We have appealed the French court’s decision to the Court of Appeal, which will retry the case in its entirety.
“The Court of Appeal operates under the supervision of the French Supreme Court and is required to address our arguments in its decision. Based on the law and the facts, we believe the verdict should be reversed.”
