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Swiss banking

France probes UBS over alleged tax evasion

Swiss bank UBS was placed under formal investigation in France on Wednesday over allegations that it had helped wealthy French customers evade the taxman.

UBS said in an emailed statement to the Reuters news agency that it was notified at a convocation hearing in Paris on Wednesday that a €1.1 billion ($1.48 billion) bail would be set “in the ongoing investigation of UBS AG's French cross-border case”.

“We consider both the legal basis for the bail amount and the method of calculation to be deeply flawed and will appeal... It is not acceptable to us that this has become a highly politicised process."

"We will continue to defend our case strongly," the Zurich-based bank said.

The €1.1 billion guarantee demanded by French judges reflects the size of the fine it could pay if found guilty of helping French customers evade tax, the French prosecutor's office said on Thursday.

Separately, a French Finance Ministry source said on Thursday that it had refused to try to reach an out-of-court settlement with UBS.

Last year, UBS head office and its subsidiary in France were placed under formal investigation in France on related charges of illegal sales practices and complicity in illegal sales practices.

The alleged sales practices in question involved seeking out wealthy customers in France who would be interested in opening bank accounts inaccessible to French tax authorities.

Three former and current executives with UBS' French subsidiary were also individually placed under investigation, a spokesman at the subsidiary said on Wednesday.

French judicial authorities probing UBS over the allegations visited the bank's Paris headquarters in November.

This latest move by Paris comes amid a global clampdown on tax evasion by authorities around the world. UBS has already had its reputation shaken in the United States. In 2009 it paid a $780 million fine after admitting to aiding and abetting US citizens accused of tax evasion.

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