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French watchdog levies stiff fine against UBS

A French banking watchdog said on Wednesday that it fined the French branch of UBS, Switzerland's largest bank, ten million euros for helping hundreds of well-heeled clients stash money away in undeclared Swiss accounts.

French watchdog levies stiff fine against UBS
Photo: UBS

The bank immediately hit back in a statement, protesting that the fine, about $13 million, was disproportionate.

It also evoked "the contentious nature of the decision," and said it would lodge an appeal before the Council of State, which acts as the supreme court for administrative justice.

UBS France has been placed under formal investigation for trying to persuade rich clients to evade taxes through dodgy accounts in Switzerland.

The ACP, the Bank of France's regulatory arm, had been alerted to the parallel accounts that ran between 2002 and 2007.

They were not declared in France.

The investigating magistrates handling the UBS affair have sent a list containing 353 names of people suspected of having held a Swiss account and have requested details from the Swiss authorities.

The ACP on Wednesday said the bank had been "lax" in taking corrective measures, adding that the management "had waited 18 months to put controls to rectify this trans-border activity."

The French probe was launched after allegations from a former UBS employee turned whistleblower.

The issue jumped back to the top of the government's agenda in the wake of a scandal surrounding the former budget minister Jérôme Cahuzac, who in April was himself placed under investigation for tax fraud.

After months denying the allegations, Cahuzac had admitted to opening an undeclared Swiss bank account in 1992, and, after Switzerland pledged to cooperate with foreign tax authorities in 2009, transferring the some 600,000 euros ($770,000) to Singapore.

His role as budget minister included tackling tax evasion.

Switzerland's financial sector is a traditional refuge for foreign depositors and it has fought to defend its long-cherished principle of secrecy by giving ground in some areas but refusing to allow the automatic handover of account details.
   
The 27-nation European Union has asked Switzerland to open talks on 
updating a 2005 deal on taxing the savings of EU citizens held in its banks.
   
Switzerland taxes interest on the savings of such depositors at a rate of 35 
percent — raised from the original 20 percent in 2011 — and pays the funds anonymously back to member states.

But Brussels wants to widen the net to cover dividends from shares and life insurance policies, as well as capital gains from the sale of shares and real estate.
   
A recent summit of G8 leaders agreed to fight tax evasion and corporate tax 
avoidance following an initiative last year by Washington and five European countries to begin moving in this direction by drafting a model agreement on sharing banking information based on a 2010 US law.

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SKI

Franco-Swiss cold war breaks out over ski border car park

Switzerland and France are in a snowball fight over a cross-border car park which serves Swiss ski slopes but has been closed by the French due to the coronavirus pandemic.

Franco-Swiss cold war breaks out over ski border car park
The object of the Franco-Swiss war: parking lot Les Dappes. Photo by AFP

The Battle of Dappes Car Park — for the moment a rather cold war — has been rumbling for weeks, triggered by the different Covid-19 rules on either side of an invisible line in a snow-covered field.

The 650-space car park sits in the valley between the pistes of La Dole on the Swiss side, and Les Tuffes in France. It is 250 metres inside French territory.

In the Jura mountains, the summit of La Dole overlooks Lake Geneva in the west of Switzerland — a country which has kept ski slopes open despite the pandemic, while neighbouring France has closed theirs.

So the chair lifts for La Dole sit empty — because nobody can use the shared car park in France.

“I cannot understand how the French authorities can decide that the Swiss cannot go skiing in their own country. This is a unilateral decision,” fumed Gerard Produit, tourism chief in Switzerland's Nyon region.

“We are being held hostage by the politics of both countries,” he told AFP, deploring the “legal imbroglio”.

The frozen chair lifts are an unwelcome sight for Patrick Freudiger, the boss of the Tele-Dole ski lifts company.

“In mid-December, we organised a meeting between France and Switzerland to present the Covid plan” for La Dole, Freudiger told AFP.

But since the end of December, “we have received three successive orders banning the use of the car park” — the latest one being valid until February 3.

READ MORE: Large crowds on Swiss ski slopes spark concern over coronavirus spread

'They won't listen' 

The prefecture of the Jura local authority in France told AFP the car park is “likely to encourage the gathering of more than six people in a public space in France, the mixing of groups, and therefore the circulation of the virus”.

The wider Bourgogne-Franche-Comte region has the highest intensive care bed occupancy rate in France, while the Jura local authority area has one of the highest Covid-19 incidence rates in the country.

Freudiger is fuming that the French authorities did not try to reach an agreement on access to the car park.

Rubbing salt into the wounds, the site was refurbished last year thanks to Swiss investment, as part of a project to create a cross-border ski destination.

Freudiger also voiced surprise that the car park is shut while car-pooling car parks for French inhabitants who work in Switzerland remain open.

“We tried to get in touch with the prefect; we could not reach him. They do not hear us, they won't even listen to us,” said Produit.

See you in court 

Tele-Dole filed two appeals last Friday to the Besancon administrative court in France over the situation. A hearing is scheduled to take place next Monday.

Switzerland's Nyon region wrote to the Jura authorities on Thursday requesting talks “as soon as possible” on potential solutions and “financial compensation” for Tele-Dole.

According to Freudiger, the ski lifts have already lost 40 working days — almost half the season — and 300,000 Swiss francs (€280,000).

Tele-Dole cannot claim any financial assistance from the Swiss government, because there is nothing to stop ski stations remaining open during the pandemic.

Etienne Bovard, director of La Dole's Swiss Ski School, faces the same headache. The school has around 20 instructors but has had to stop all group lessons.

“In terms of turnover, we are 20 percent down at the moment, and if this continues throughout February… it will amount to an 85 percent loss,” he said.

“What's terrible is that it's the children,” who make up 80 percent of the clientele, “who are victims of this political game”.
 

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