UBS has agreed to pay €835 million to resolve a long-running legal dispute with French authorities over its cross-border business activities between 2004 and 2012.

The settlement, announced on Tuesday, brings to a close a saga that has spanned more than a decade and involved allegations of unlawful client solicitation and aggravated money laundering.

The Swiss banking group will pay a fine of €730 million and €105 million in civil damages to the French state. UBS confirmed the resolution in a statement, saying, “UBS AG is pleased to announce it has resolved the legacy matter concerning its cross-border business activities in France between 2004 and 2012”. The bank added that it is fully provisioned for the payment.

The case dates back to accusations that UBS helped wealthy French clients evade taxes by concealing assets and facilitating illegal banking activities. In 2019, UBS was initially ordered to pay a €3.7 billion fine and €800 million in damages, but the penalty was reduced to €1.8 billion on appeal in 2021. The French Supreme Court confirmed the Paris appeals court’s decision in 2023, finding UBS guilty but referring the financial penalty and civil damages to be reassessed by a lower court.

UBS’s activities during the period in question were led by Sergio Ermotti, who was serving his first tenure as the bank’s chief executive officer. The bank had previously sought to settle the investigation for less than the €300 million it paid to resolve a similar case in Germany. Negotiations broke down in 2017, leading to years of litigation.

French authorities accused UBS of sending Swiss bankers to court well-heeled French clients and providing services to help them hide assets from tax authorities. The appeals court found the bank guilty of concealing serious tax fraud and illegal banking activities.

The settlement is significantly lower than the original penalty, reflecting years of legal wrangling and negotiations. UBS stated that resolving the matter is in line with its intention to act in the best interests of all stakeholders.

---