France’s highest court found UBS guilty again on Wednesday of tax fraud and money laundering. But at the same time, the Paris Court of Cassation also overturned fines amounting to billions. Business attorney Peter F. Kunz assesses the legal process surrounding the major Swiss bank.
peter f. Kunz
Kunz is Professor of Business Law at the Faculty of Law at the University of Bern and its Dean until 2020.
SRF News: How do you evaluate the ruling from UBS’s point of view?
peter f. Kunz: This is clearly a victory for UBS, especially compared to the lower court rulings. In fact, we do not yet know the extent of the victory. Against this background, a certain degree of uncertainty remains, including at UBS.
A deposit of around €1 billion and a payout of €800 million are up for discussion again. Would the amount perhaps increase or even decrease significantly?
This is difficult to say. In theory, anything can happen, from zero to a higher amount. However, the Court of Cassation also raised questions about the legality of such deposit collection as well as damages. So the trial court will take a close look at this again. There will be new negotiations and I expect things to go better for UBS than in the second case. The amount will definitely be reduced again.
This process will certainly not affect the normal business of UBS.
UBS is currently busy integrating Credit Suisse. If a process will continue for a long time, Not in weight?
I don’t think this is a problem for the merger. In-house and outside lawyers are happy to be able to litigate here a little longer. Ultimately, this will play no role for Mr. Ermotti in the integration process. At least on the condition that the amounts to be paid do not increase, which I do not suppose. So it is simply a pending matter and takes longer than expected, but it certainly will not affect the normal business of UBS.
Sergio Ermotti, head of UBS old and new, has always said he does not want to accept a guilty verdict. Has this line been more or less confirmed?
For a long time, Mr. Ermotti was heavily criticized for simply not giving up. Today we have to say that it was the right decision. At the beginning of 2019, this was so expensive that a fine of €3.7 billion was imposed, which was later reduced. Against this background, it was worth it for Ermotti, in purely financial terms and certainly also in terms of image. He actually left the field as a winner here.
We have completely new regulations and new awareness.
Does the ongoing process put pressure on Switzerland’s financial position and image?
No, obviously not. That was a legacy, and that was a UBS problem. I can imagine that one or two banks are upset today because they themselves gave in too quickly in various tax disputes. But UBS, as a large bank, can afford to exert a little counterpressure here. The tax dispute between UBS and France will certainly have no impact on the Swiss financial position. It covers topics from 2004 to 2012. A lot has changed in Switzerland in the past decade. What was possible at that time is no longer possible today, not even at UBS. We have completely new regulations and new awareness.
Interview conducted by Jan Baumann.
“Tv expert. Hardcore creator. Extreme music fan. Lifelong twitter geek. Certified travel enthusiast. Baconaholic. Pop culture nerd. Reader. Freelance student.”