A French court ordered Switzerland's largest bank, UBS to pay €4.5bn ($5.1bn) in fines and damages in a landmark tax fraud case, setting a record for France.
A court in Paris found that the bank had illegally helped French clients hide billions of euros from French tax authorities between 2004 and 2012.
UBS said it had consistently contested any criminal wrongdoing. In a statement, the Swiss bank said it "strongly disagrees with the verdict" and plans to appeal the verdict. "The conviction is not supported by any concrete evidence, but instead is based on the unfounded allegations of former employees who were not even heard at the trial."
UBS suggested the ruling was based on prejudices in France — which is known for its high taxes — against Swiss tax practices. It insisted that the bank was only offering "legitimate and standard services under Swiss law that are also common in other jurisdictions."
The Paris court disagreed, and ordered exceptional criminal fines of €3.7bn ($4.2bn) for UBS' Swiss head office and €15m ($17m) for its French subsidiary, and civil damages of €800m ($907m). Five former UBS executives were also given fines and suspended prison sentences.
The case concerns thousands of French citizens who moved funds to undeclared Swiss accounts to avoid taxes. The court found evidence that UBS provided services to conceal such fraudulent funds. France's national financial crimes unit estimates around €10bn went unreported to French tax authorities.
Five years ago, France ordered UBS to deposit €1.1bn as a form of corporate bail after prosecutors said the bank systematically helped French citizens avoid paying taxes from 2004 to 2012. The two sides came close to finding a settlement, only for the deal to collapse at the last minute.
Following similar cases in the US in 2009 and Germany in 2014, the bank accepted large fines.
UBS has allocated roughly $2.5bn in total provisions to settle past scandals.
Authorities across Europe have been cracking down on tax evasion and suspicious banking practices following the global financial crisis in 2008. This also led to the collapse of bank secrecy practices in Switzerland.
France introduced a US-style settlement procedure two years ago intended to help financial prosecutors take on a more global role. Société Générale negotiated with the PNF last year to pay £250m to end a bribery case. HSBC settled a tax probe in 2017 for £300m, which was the largest criminal fine in France.