Case n°19/05566 Judgement n°192/21

COUR D'APPEL DE PARIS

Pole 2 - Ch.12

Delivered publicly on 13 December 2021, by Pôle 2 - Ch.12 des appels correctionnels.

On appeal from a judgment of the tribunal de grande instance de Paris - 32nd chamber - of 20 February 2019, (P11055092033).

PARTIES IN THE CASE :

Defendants BAUDRY Olivier

Born on 23 June 1963 in LANCY (SWITZERLAND)

Son of BAUDRY Gérard and GLAUTIER Colette Swiss nationality

Emolové

Residing at: 30 chemin de la Lécherette - 1233 BERNEX - SWITZERLAND

Security measures :    

-Warrant of arrest dated 9 January 2015: order of placement under judicial supervision dated 3 July 2018. with the obligation to pay into the hands of the Court's revenue officer the sum of 150,000 euros in one instalment before 15 July 2018. up to 30,000 euros for representation in all the acts of the proceedings and the execution of the other obligations provided for in this order. up to 120,000 euros for the payment in the following order of the compensation for the damage caused by the offence and the restitutions as well as the maintenance debt when the accused is prosecuted for the non-payment of this debt and of the fines: [The administrator of this court before recula sum of 150,000 euros on 04 July 2018 - bond paid].

 

Appellant,

Appearing. assisted by Maître CORNUT-GENTILLE Pierre, lawyer at the PARIS bar, chamber P 71.

D'HALLUIN Hervé. Francois. Bernard

Born on 27 December 1968 in ROUBAIX. NORD (059) Son of D'HALLUIN Marc and FONTAINE Monique

 French nationality

Financial Director

Residing 162 Boulevard Carnot - 59420 MOUVAUX

Security measures :

- Order of placement under judicial supervision dated 12 July 2012 with the obligation to pay into the hands of the Court's revenue officer the sum of 70,000 euros in one instalment, in addition to 5,000 euros for representation at all the acts of the proceedings and the performance of the other obligations provided for in this order. 65,000 for the payment, in the following order, of the costs advanced by the civil party, the compensation for the damage caused by the offence and the restitutions, as well as the maintenance debt. this part of the bond shall be paid by orovision in accordance with article 142-1 of the Code of Criminal Procedure. and the costs advanced by the public party and the fines [The administrator of this court before receiving the sum of 35,000 euros on 10 October 2012: the sum of 35,000 euros on 26 November 2012 - bond paid]:

- Order of release from judicial supervision dated 5 November 2012: order of maintenance under judicial supervision. art 179 of the CPP dated 17 March 2017: maintenance under judicial supervision by the trial court on 22 February 2018: maintenance under judicial supervision by the trial court on 04 June 2018.

Comoarant. assisted by Maître MAREMBERT Thierrv. lawyer at the PARIS bar. chamber P 200 and by Mai "tre Arthur SUSSMAN, lawyer at the Paris bar, chamber P0200.

DE FAYET Patrick        

Born on 30 June 1955 in NEUILLY SUR SEINE, HAUTS-DE-SEINE (092)         

Son of DE FAYET Arnaud and DE WOUTERS Monique

French nationality      

Retired.

Residing at 147-Boulevard Malesherbes - 75017 PARIS

Security measures :

- Order of placement under iudicial supervision dated 18 October 2012. with the obligation to pay into the hands of the Court's revenue officer, the sum of 150,000 euros in 2 instalments on the following dates: the first of 80,000 euros before 18 November 2012 and the second of 70,000 euros before 18 December 2012. this bond guaranteeing representation at all acts of the proceedings. up to 5. This bond shall guarantee representation in all the acts of the proceedings and the performance of the other obligations provided for in this order. up to 145,000 euros for the payment, in the following order, of the costs advanced by the civil party, compensation for the damage caused by the offence and restitution, as well as the maintenance debt. this part of the bond shall be paid in advance in accordance with Article 142-1 of the Code of Criminal Procedure, the costs advanced by the public party and the fines.

-Order of maintenance under judicial control. art 179 of the CPP. dated 17 March 2017 [The administrator of this court before receiving the sum of 80,000 euros on 13 November 2011: the sum of 70,000 euros on 13 December 2012 - security paid] :    -.-

-The court of first instance, on 6 November 2017, maintained the appellant under judicial supervision - the court of first instance, on 4 June 2018.

Appellant 

Appearing. assisted by Maître LE BORGNE Jean-Yves. lawyer at the Paris bar. chamber R264 substituting Maître SAINT PALAIS, chamber R264.

KIEFER Dieter

Born on 04 November 1950 in SARRK.IRCH-WIL (SWITZERLAND)

Son of KIEFER Willy and BORN Rose-Marie Swiss national

Retired

Resident Soeerstrasse 12b - 08832 WILEN BEI WOLLERAN - SWITZERLAND

Security measures :

- Warrant of arrest dated 9 January 2015 :

- Order of placement under judicial supervision dated 3 July 2018. with the obligation to pay the sum of 150,000 euros in one instalment before 15 July 2018.

30,000 for representation in all the proceedings and the performance of the other obligations provided for in this order. up to a maximum of 120,000 euros for the payment of compensation for the damage caused by the offence and restitutions, as well as the maintenance debt when the accused is prosecuted for the failure to pay this debt and the fines [The administrator of this court received the sum of

150,000 on 06 July 2018 - bond paid].

Appellant.

Appearing, assisted by Maître STASSE Julia, lawyer at the PARIS bar. chamber C1402 and by Maître PARTOUCHE Clara. lawyer at the Paris bar. chamber Cl402. assisted throughout the hearing by ROSSI Sarah. English interpreter. who took the oath of article 407 of the Code of Criminal Procedure and assisted whenever necessary.

UBS AG in the person of NOVAKOVIC Christine, with power of attorney, assisted by AMOUROUX Mathilde, English interpreter

Before elected domicile at Maître CHEMLA Denis - 52 avenue Hoche - 75008 PARIS

Appellant.                   

Assisted by Maître CHEMLA Denis. lawyer at the PARIS bar. Maître TEMIME Hervé. lawyer at the PARIS bar. chamber M.27. and Maître MAROUETIY Hippolyte, lawyer at the Paris bar, chamber J022:

UBS FRANCE in the person of Jean Frédéric De LEUSSE. Chairman of the Management Board and LORIN-GUERIN Béatrice, member of the Management Board.

Domicile 69 Boulevard Haussmann - 75008 PARIS

Appellant.

Assisted by Maître DEZEUZE Eric, lawyer at the PARIS bar, chamber chamber T12.

WEIL Raoul

Born on 13 November 1959 in BASEL (SWITZERLAND)

Son of WEIL Wania and NACHBUR Margot

 Swiss nationality

Consultant, married

Before electing domicile with Mr DUPEUX, residing at 282 Bld Saint Germain- 75007 PARIS

Security measures :    

- Order of placement under judicial supervision dated 29 September 2015, with the obligation to pay the sum of 200,000 euros in one instalment before 15 December 2015 into the hands of the revenue administrator of the Court. up to 20,000 euros for the reappearance at all the acts of the procedure up to 180,000 euros for the payment in the following order of the repair of the damages caused by the inftaction and the fines [The administrator of this court before receiving the sum of 200,000 euros on 2 December 2015 - deposit paid].

- order of maintenance under judicial supervision, art 179 of the CPP. dated 17 March 2017: maintenance under judicial supervision by the trial court on 22 February 2018:

-Maintained under judicial supervision by the trial court on 04 June 2018.

 

Respondent.

Appearing. assisted by Maîtres DUPEUX Jean-Yves. lawyer at the PARIS bar. chamber P 77 and AUTAIN Xavier. lawyer at the PARIS bar. chamber P0077 with a power of attorney dated 14/10/2019. and assisted throughout the hearing by Stéphan SCHMUCK, English interpreter. who took the oath of article 407 of the code of criminal procedure and his assistance whenever necessary

WICK Philippe. ,

Born on 22 March 1958 in LAUSANNE (SWITZERLAND)

Son of WICK Alplionse and WICK Lotti Ammann

 Swiss nationality

Service employee

Residing at 7 chemin de Panlièvre - 1266 DUILLIER - SWITZERLAND

Security measures :

-Warrant of arrest dated 9 January 2015:

-report of notification of an arrest warrant dated 3 July 2018: report of the Judge of Freedom and Detention dated 3 July 2018: order of placement under judicial supervision dated 3 July 2018. with the obligation to pay into the hands of the Court's revenue officer. the sum of 150,000 euros in 1 instalment before 15 July 2018. up to 30. 120,000 for the payment, in the following order, of compensation for damage caused by the offence and restitution, as well as maintenance debts where the defendant is prosecuted for failure to pay such debts and fines:

[The administrator of this court received the sum of 150,000 euros on 04 July 2018 - bond paid].

Appellant

Appearing. assisted by Maître BOUGARTCHEV Kiril, lawyer at the PARIS bar, chamber P48 and by Maître MORIN Nathan, lawyer at the Paris bar, chamber P0048.

Public prosecutor

Principal appellant and incidental appellant

Civil party

FRENCH STATE

With address for service at Maître NORMAND-BODARD Xavier - 7 place de Valois - 75001 PARIS

Appellant.

Represented by Maître NORMAND-BODARD Xavier, lawyer at the PARIS bar, chamber P 141.

Composition of the court

during the debates and the deliberation :

president: Francois REYGROBELLET.

Councillors: Hervé ROBERT, president acting as councillor

Dominique MALLASSAGNE,

Composition of the court

at the time of delivery of the judgment :

President: Francois REYGROBELLET,

Councillors: Catherin CHAZE

Anne Marie BELLOT. appointed by order of the President of the Court of First Instance in application of the provisions of article R 312-3 of the Code of Judicial Organisation.

Clerks

Laëtitia 1PRADIGNAC.  Marine CARION.  Marie-Madeleine PORCHER at the debates and Laëtitia PRADIGNAC at the delivery of the judgment.         -

Public Prosecutor

represented at the debates and at the delivery of the judgment by Muriel FUSINA, Advocate General and Serge ROQUES, Advocate General

THE PROCEDURE :

Referral to the court and prevention

 

1) BAUDRY Olivier

BAUDRY Oliyier was prosecuted by order of referral to the criminal court dated 17 March 2017. followed by a summons to the Public Prosecutor's Office on 6 February 2018 and to the Foreign Prosecutor's Office on 6 February 2018 followed by a registered letter with acknowledgement of receipt signed on 13 February 2018. followed by a contradictory referral to the hearing of 22 February 2018. followed by a counter-confirmatory referral to the hearing of 4 June 2018, he is accused of having :      ,

- In Paris (75) and on national territory. from October 2007 to March 2009. while neither he nor his business charges were authorised to operate on French territory. Marketing and unlawfully canvassing French tax residents. in his capacity as manager of the France International office. In particular, to receive their funds and to hold or manage their financial instruments, the canvassing being carried out by UBS AG client advisors acting under his authority. and by using a network of financial intermediaries, business introducers.

Acts prohibited and punished by Articles L 3532; L 353-3; L341-3; L341-4; L341-J, - L341-2 of the Monetary and Financial Code and 313-1 of the Criminal Code

- in Paris (75) and on the national territory. in Switzerland. from October 2007 to March 2009. in his capacity as head of international private banking ("head of Wealth Management International") and from October 2007 as head of private banking ("Wealth Management CEO"). provided assistance. in a habitual manner and using the facilities provided by the exercise of the activity of manager of a banking establishment. in operations of placement, concealment or conversion of the direct or indirect proceeds of a crime or offence. in this case, the offence of tax fraud with regard to income tax and wealth tax or corporation tax (IS) committed by taxpayers of the French Treasury. by the clandestine opening of bank accounts outside France and the setting up of a series of services for its French tax resident clients, procedures or devices designed to conceal, invest or convert undeclared funds deposited by clients committing the offence of tax fraud (so-called numerical or numbered accounts. the creation of legal persons or other interposed entities (offshore companies, trusts, foundations, life insurance contracts), remaining service. making available to fraudulent clients means of payment that are not in their name or in the name of the interposed entity). the assets on which the money laundering is based were estimated at 8.5 billion euros as at 30 November 2008.

Offences provided for and punishable under Articles 324-1, 324-2, 324-3, 324-6, 324-7 of the Criminal Code

 

2) D'HALLUIN Hervé, François, Bernard D'HALLUIN Hervé. François. Bernard was prosecuted by order of referral to the criminal court dated 17 March 2017, followed by a referral to the hearing of 22 February 2018, followed by a referral to the hearing of 4 June 2018, accused of having :     

- in the North and on national territory. from 2004 to 2009. being an accomplice, by providing means (in particular organising events) of the offence of illegal canvassing committed by UBS AG on national territory. consisting. while UBS AG was not a company authorised to operate on French territory, in canvassing French residents in France to receive their funds and to keep or manage their financial instruments.

Offences provided for and punishable under Articles L353-2, L353-4, L341-3, L341-4, L341-1. L341-2 of the Monetary and Financial Code, and 121-6, 121-7, and 313-1 of the Criminal Code,

-In the North of France. from 2004 to 2009. knowingly benefited from the proceeds of this illegal canvassing. via his bonuses calculated in particular on the proceeds of the illegal canvassing (offence of concealment).

Offences provided for and punishable under Articles 321-1, 321-31 and 321-9 of the Criminal Code

 

3) DE FAYET Patrick

DE FAYET Patrick was prosecuted following an order to appear before the criminal court dated 17 March 2017 for the purpose of prior recognition of his guilt and this procedure, which was not attached to the file, was not successful.

- in Paris (75) in any case on national territory. from 2004 until 2009. in any case since the time not covered by the statute of limitations for public action, was an accomplice to the offence of illegal canvassing committed by UBS AG on national territory (the acts of canvassing being carried out by UBS AG's account managers (clientadvisors) acting under the authority of their employer). UBS AG was not a company authorised to operate on French territory. to canvass French tax residents by knowingly helping or assisting them in the preparation or consumption of their business. In this case, in particular by organising promotional events financed by UBS AG in conjunction with its counterparts at UBS AG, targeting in particular the HNW and UHNW segment, and by exploiting synergies between Coreaffiuent teams. Acts prohibited and punishable under Articles L 353-2; L 353-3; L341-3; L341-4: 1.341-1:

L341-2 of the Monetary and Financial Code 313-1, 0121-6 and 121-7 of the Criminal Code.          - '.,.,

- In this case, the soliciting of money from the private sector is a criminal offence, which is not covered by the statute of limitations for public action. In this case, the illegal banking and financial canvassing committed by the business managers of the UBS AG bank by concealing, by compensation, in the computer tool known as Adjustement Transfer Assets (ATA), business knowledge that had previously been recorded in the "milk books".

Offences provided for and punishable under Articles 324-1; 324-3; 324-6; 324-7; - 324-8 of the Criminal Code.

324-8 of the Criminal Code.

 

4) KIEFER Dieter

KIEFER Dieter was prosecuted by order of referral to the criminal court dated 17 March 2017. followed by a summons to the Public Prosecutor's Office on 6 February 2018 and to the Foreign Public Prosecutor's Office on 6 February 2018. followed by a referral to the hearing of 22 February 2018. followed by a referral to the hearing of 4 June 2018, accused of having:

- in Paris (75) and on the national territory. from 2004 to September 2008. while neither he nor his business managers were authorised to operate on French territory, unlawfully canvassed and caused to be canvassed French tax residents; in his capacity as head of the Western Europe division (CEO Wealth management Western Europe). to receive their funds and to keep or manage their financial instruments, the canvassing being carried out by UBS AG client advisors acting under his authority, and using a network of financial intermediaries, business introducers.

Facts f)révus and réTJrimés f)ar articles L 353-2 ; L 353-3 ; L341-3 ; L341-4 ; L341-1,- L341-2 of the monetary and financial code and 313-1 of the penal code

- in Paris (75) and on the national territory. in Switzerland, from 2004 to September 2008. in his capacity as head of the Western Europe division (CEO Wealth Management Western Europe). provided assistance. in a habitual manner and using the facilities provided by the activity of manager of a banking establishment. in investment operations. In this case, the offence of tax evasion with regard to income tax and wealth tax or corporation tax (IS) committed by taxpayers of the French Treasury, by the clandestine opening of bank accounts outside France and the setting up of a series of services for his clients who are French tax residents. The purpose of these services is to conceal, invest or convert undeclared funds deposited by clients committing the crime of tax fraud (so-called digital or numbered accounts, creation of legal entities or other interposed entities (offshore companies, trusts, foundations, etc.). Life insurance contracts), the remaining bank service, the provision to fraudulent clients of non-negotiable means of payment or in the name of the interposed entity). The assets on the fraudulent accounts are estimated at 10.6 billion euros as at 1st June 2006 and 8.5 billion euros as at 30 November 2008.

Offences covered and punishable under Articles 324-1, 324-2, 324-3, 324-6, 324-7 of the Criminal Code

 

5) UBS AG

UBS AG was prosecuted by order of referral to the criminal court dated 17 March 2017, followed by a summons to its lawyer on 5 February 2018, followed by a referral to the hearing on 22 February 2018, followed by a referral to the hearing on 4 June 2018, accused of having:

- in Paris (75) and on the national territory. from 2004 to 2011. when it was not a company authorised to operate on French territory. unlawfully canvassing French tax residents in order to receive their funds and to hold or manage their financial instruments, the canvassing being carried out by UBS AG's client advisors acting under the authority of their manager and using a network of financial intermediaries, business providers.

- Offences provided for and punishable under Articles L 353-2: L 353-3; L341-3: L341-4; L341-1: L341-2 of the French Monetary and Financial Code and 121-2 and 313-1 of the French Criminal Code

- in Paris (75) and on the national territory, in Switzerland. from 2004 to 2012. provided assistance. in a habitual manner and using the facilities provided by the exercise of the activity of a banking establishment. to investment operations. concealment or conversion of the direct or indirect proceeds of a crime or an offence. In the case in point, the offence of tax evasion with respect to income tax, wealth tax or corporation tax (OS) committed by taxpayers of the French Treasury by clandestinely opening bank accounts outside France and setting up a series of services for its French tax resident clients. of procedures or devices intended to conceal: to place or knowingly convert undeclared funds deposited by clients committing the offence of tax fraud (so-called numbered accounts or numbered accounts, constitution of legal entities or other interposed entities (offshore companies. trust. foundations. Life insurance contracts). Remaining bank service, provision of non-nominal payment instruments to fraudulent clients or in the name of the interposed entity). The assets on which the aggravated money laundering was based were estimated at 10.6 billion euros on 1 June 2006 and 8.5 billion euros on 30 November 2008,

Offences provided for and punished by Articles 121-2, 324-1, 324-2, 324-3, 324-6, 324-9 of the Criminal Code

 

6) USB FRANCE

UBS France was prosecuted by order of referral to the criminal court dated 17 March 2017. followed by a summons given to an assistant iuridiaue on 5 February 2018. followed by a contradictory referral to the hearing of 22 February 2018. followed by a contradictory referral to the hearing of 4 June 2018, accused of having:

- The Court found that the defendant had been an accomplice to the offence of unlawful canvassing by UBS AG on French territory from 2004 to 2009, which consisted of canvassing French residents in France to receive their funds and to hold or manage their financial instruments, in particular by acting as a relay or intermediary between prospective customers and UBS AG's business representatives. by the joint organisation of promotional events aimed at the HNW and UHNW segment and the organisation of synergies between teams in the Core Affiuent segment, which are prohibited by Articles L353-2 and L353-4 of the French Monetary and Financial Code and Articles 121-2, 121-6, 121-7 and 313-1 of the French Penal Code, on French territory from 2004 to 2008 was an accomplice, by supplying movens, to the aggravated laundering of tax fraud in Switzerland. from 2004 to 2012, accused of UBS AG, in particular by acting as a relay or intermediary between prospective clients and UBS AG's business managers, by organising promotional events aimed at the HNW and UHNW segment in particular, and by organising synergies between teams in the Core Affluent segment.

Facts orevised and reorimised by articles 121-2. 121-6. 121-7. 324-1, 324-2 and 324-9 of the Criminal Code and 1741 of the General Tax Code.

 

7) WEIL Raoul

WEIL Raoul was prosecuted by order of referral to the criminal court dated 17 March 2017. followed by a summons given to his lawyer on 5 February 2018, followed by a referral to the hearing on 22 February 2018. followed by a referral to the hearing on 4 June 2018, accused of having :

- in Paris (75) and on national territory, from 2004 to November 2008, when neither he nor his business managers were authorised to operate on French territory. In his capacity as head of international private banking ("Head of Wealth Management International") or as of October 2007 as head of private banking ("Wealth Management CEO"), in order to receive their funds and to keep or manage their financial instruments. The acts of canvassing were carried out by UBS AG's client advisors acting under his authority and using a network of financial intermediaries. Facts orévus and réorimés 1Jar articles L 353-2: L 353-3: L341-3; L341-4: L341-l; L341-2 of the monetary and financial code and 313-1 of the penal code  

- in Paris (75) and on the national territory. in Switzerland. from 2004 to November 2008, in his capacity as head of international private banking ("head of Wealth Management International") and from October 2007 as head of private banking ("Wealth Management CEO"). In this case, the offence of tax fraud with respect to income tax and wealth tax or corporation tax (IS) committed by taxpayers known as the French Treasury. by the clandestine opening of bank accounts outside France and the setting up for its clients who are French tax residents of a series of services, procedures or devices intended to conceal, invest or knowingly convert undeclared funds deposited by clients committing the offence of tax fraud (so-called numerical or numbered accounts. Setting up legal entities or other interposed entities (offshore companies, trusts, foundations, life insurance contracts), remaining bank services, providing fraudulent clients with non-nominal payment instruments or in the name of the interposed entity), the assets on which the aggravated money laundering was based being estimated at 10.6 billion euros as at 1st June 2006 and 8.5 billion euros as at 30 November 2008.

8.5 billion as of 30 November 2008. Facts orévus and réorimés by articles 324-1, 324-2, 324-3, 324-6, 324-7 of the penal code –

 

8) WICK Philippe

WICK Philiope was prosecuted by order of referral to the criminal court dated 17 March 2017. followed by a summons delivered to ParQuet on 6 February 2018 and to ParQuet étranger on 6 February 2018. followed by a referral to the hearing on 22 February 2018. followed by a referral to the hearing on 4 June 2018, accused of having:

- in Paris (75) and on the national territory. from 2004 to October 2007. while neither he nor his business managers were authorised to operate on French territory. unlawfully canvassed and caused to be canvassed French tax residents. in his capacity as manager of the France International office. The acts of canvassing were carried out by UBS AG's client advisors acting under his authority, and by using a network of financial intermediaries, business introducers, to receive their funds and keep or manage their financial instruments.

Acts prohibited and punishable under Articles L 353-2: L 353-3: L341-3: L341-4; L341-1; L341-2 of the Monetary and Financial Code and 313-1 of the Criminal Code

- in Paris (75) and on the national territory. in Switzerland. from 2004 to October 2007. in his capacity as manager of the Fronce International office. provided assistance. in a habitual manner and using the facilities available to him for the exercise of the activity of manager of a banking establishment. to investment operations. dedissimulation or conversion of the direct or indirect proceeds of a crime or an offence. in this case the offence of tax fraud with respect to income tax and wealth tax or corporation tax (IS) committed by taxpayers of the French 2nd public treasury. by the clandestine opening of bank accounts outside France and the setting up for its clients who are French tax residents of a series of services. procedures or devices intended to conceal. invest or knowingly convert undeclared funds deposited by clients committing the offence of tax fraud (so-called numerical or numbered accounts. Setting up legal entities or other interposed entities (offshore companies, trusts, foundations, life insurance contracts), remaining bank service. Making available to fraudulent clients payment instruments that are not in their name or in the name of the interposed entity). The assets involved in the aggravated money laundering are estimated to be worth 10.6 billion euros as of June 1, 2006,

10.6 billion as of June 1, 2006, as provided for and punishable under Articles 324-1, 324-2, 324-3, 324-6, 324-7 of the Criminal Code.

 

The judgment

 

The TRIBUNAL DE GRANDE INSTANCE DE PARIS - 32nd

CHAMBER - by contradictory judgment, dated 20 February 2019, has : On the request for referral by Mr Hervé D'HALLUIN :

- rejected the request for referral

On the priority questions of constitutionality :

- On the transmission to the Court of Cassation of the following priority question of constitutionality:

"Do Articles 324-1 of the Criminal Code and L.228 of the Book of Tax Procedures, which according to the interpretation of the case law adopted by the Court of Cassation in its decision no. 7-82.977 of 20 February 2008 - do not make public action in matters of tax fraud laundering subject to a prior complaint by the tax authorities, infringe the constitutional principle of the separation of powers. Do they infringe the constitutional principle of the separation of powers, the independence of the legislative and executive powers, and Articles 7 and 8 of the Declaration of the Rights of Man and of the Citizen of 1789?

- SAID THAT THERE WAS NO NEED TO REFER THE PRIORITY QUESTION OF CONSTITUTIONALITY TO THE COURT OF CASSATION.

On the transmission to the Court of Cassation of the following priority question of constitutionality:

"Do the combined provisions of Articles 324-1, paragraph 324-2 and 324-3 of the Criminal Code infringe the constitutional principle of equality before the law, which derives from Article 1 of the Constitution of 4 October 1958 and Article 6 of the Declaration of the Rights of Man and of the Citizen of 1789. in that they can be used to prosecute under the heading of aggravated tax fraud. provided for and punished by Articles 121-6 and 121-7 of the Criminal Code and Articles 1741 and l 742 of the General Tax Code. which, without the slightest objective justification, entails a repressive regime that is radically different from that of aggravated tax fraud?

- SAID THAT THERE WAS NO NEED TO REFER THE PRIORITY QUESTION OF CONSTITUTIONALITY TO THE COUR DE CASSATION.

On the transmission to the Court of Cassation of the following priority question of constitutionality:

"Do the combined provisions of Articles 121-6 and 121-7, 324-1 paragraph 2, 324-2 and 324-3 of the Criminal Code infringe the constitutional principle of equality before the law, which derives from Article 1 of the Constitution of 4 October 1958 and Article 6 of the Declaration of the Rights of Man and of the Citizen of 1789. in that they can be applied to prosecute, under the charge of aggravated tax fraud, acts that fall under the charge of complicity in tax fraud. provided for and punished by Articles 121-6 and 1217-7 of the Criminal Code and 1741 and 1742 of the General Tax Code?

- SAID THAT THERE WAS NO NEED TO REFER THE PRIORITY QUESTION OF CONSTITUTIONALITY TO THE COURT OF CASSATION.

ON THE NULLITIES

On the nullities raised by UBS AG :

- declared UBS AG inadmissible to raise nullities before the criminal court.

On the nullities raised by Mr. Hervé D'HALLUIN:

- rejected the exception of nullity.

On the nullities raised by Mr Philippe WI K :

- declared inadmissible Mr. Philippe WICK to raise the nullity of the proceedings before the criminal court.

On the nullities raised by Mr Dieter KIEFER :

- declared inadmissible Mr. Dieter KIEFER to raise nullities in the proceedings.

On the nullities raised by Mr. Olivier BAUDRY:

- declared Mr Olivier BAUDRY inadmissible to raise invalidity of the proceedings.

On the nullities raised by UBS FRANCE :

- declared UBS FRANCE inadmissible to raise nullities before the criminal court.

ON THE COURT'S JURISDICTION

- Dismissed the objection of lack of jurisdiction.

ON THE STATUTE OF LIMITATIONS

- rejected the pleas of prescription of the public action.

ON THE PUBLIC ACTION :

- declared Hervé. Francois. Bernard D'HALLUIN NOT GUILTY and remanded him FOR PROSECUTION of the alleged facts of:

*RECEIVING PROPERTY FROM AN OFFENCE PUNISHABLE BY A SENTENCE NOT EXCEEDING 5 YEARS IMPRISONMENT,

committed from 2004 to 2009 in the North,

- declared Hervé. Francois. Bernard D'HALLUIN NOT GUILTY and dismissed him PARTIALLY FROM THE PROSECUTION of

facts qualified as :       , ,

THE COURT OF CASSATION FOUND THE DEFENDANT GUILTY OF: *COMPLICIT BANKING OR FINANCIAL SOLICITING BY AN UNAUTHORISED PERSON.

committed from 16 September 2008 to 31 December 2009, in the North of France and on the national territory,

- declared Hervé, François, Bernard D'HALLUIN GUILTY of the acts qualified as :    , ,

*COMPLICIT BANKING OR FINANCIAL SOLICITING BY AN UNAUTHORISED PERSON.

committed from 2004 to 15 September 2008, in the North of France and on the national territory,

- sentenced Hervé-Francois.   Bernard D'HALLUIN to a criminal prison sentence of SIX MONTHS,

In view of Article 132-31 al.l of the Criminal Code:

- said that the execution of this sentence would be suspended in full, under the conditions provided for by these articles,

- ordered Hervé, François, Bernard D'HALLUIN to pay an amount of

FIFTY THOUSAND EUROS (50,000 euros).

***

- declared Patrick DE FAYET NOT GUILTY AND dismissed him FROM PROSECUTION.

 

 

FINS DE LA POURSUITE of the facts qualified as :

*MONEY LAUNDERING: PARTICIPATION IN AN INVESTMENT OPERATION.

CONCEALMENT OR CONVERSION OF THE PROCEEDS OF AN OFFENCE PUNISHABLE

A SENTENCE NOT EXCEEDING 5 YEARS. committed from 2004

until 2009. in any case for a period not covered by the statute of limitations for public action, in Paris, in any case on national territory,

 

- declared Patrick DE FAYET GUILTY of the facts qualified as :

*COMPLICITATION OF BANKING OR FINANCIAL SEARCHING BY AN UNAUTHORISED PERSON.

committed from 2004 to 2009. in any case since the time not covered by the statute of limitations for public action, in Paris, in any case on national territory,

- sentenced Patrick DE FAYET to TWELVE MONTHS in prison,

In view of Article 132-31 a/.1 of the Criminal Code:

- said that the execution of this sentence would be suspended in its entirety, under the conditions provided for by these articles;

- ordered Patrick DE FAYET to pay a fine of TWO HUNDRED THOUSAND EUROS (200,000 euros),

- DECLARES THAT THERE IS NO REASON TO REQUEST A CHALLENGE as an accomplice to tax fraud.

Identification of the body or representative of the legal entity within the meaning of Article 121-2 of the Criminal Code and L 51 1-13 of the Monetary and Financial Code: Patrick DE FAYET

in his capacity as Head of Front Office, member of the Executive Board of UBS FRANCE, Managing Director (2008)-organ.

***

- declared UBS FRANCE GUILTY of the facts qualified as :

* COMPLICITY IN BANKING OR FINANCIAL CANVASSING BY AN UNAUTHORISED PERSON,

committed from 2004 until 2009. on national territory:

*COMPLICITY IN MONEY LAUNDERING: PARTICIPATION IN AN

INVESTMENT OPERATION. CONCEALMENT OR CONVERSION OF THE PROCEEDS OF AN OFFENCE PUNISHABLE BY A SENTENCE NOT EXCEEDING

Concealment or conversion of the proceeds of an offence punishable by a sentence not exceeding 5 years, committed from 2004 to 2008, on national territory,

Combined application of Articles 131-38 of the Criminal Code, which states that the maximum fine rate applicable to legal persons is equal to five times the rate set for natural persons by the law punishing the offence, and Article 324-3 of the Criminal Code, which provides that the fines set out in Articles 324-1 and 324-2 may be increased to half the value of the assets or funds involved in the money laundering operations.

- ordered UBS FRANCE to pay a fine of FIFTEEN MILLION EUROS (15,000,000 euros).

***

- declared Raoul WEIL NOT GUILTY AND dismissed him from the prosecution of the alleged facts of :

The court found Raoul Weil not guilty and sent him back for prosecution of the following offences: *BANKING OR FINANCIAL OFFENDING BY AN UNAUTHORISED PERSON. committed from 2004 to November 2008. in Paris and on the national territory.

*AGGRAVATED MONEY LAUNDERING: HABITUAL PARTICIPATION IN AN INVESTMENT OPERATION. DISSIMULATION OR CONVERSION OF THE PROCEEDS OF A CRIME. committed from 2004 to November 2008, in Paris and on the national territory.

***

- declared Dieter KIEFER NOT GUILTY AND dismissed him in part from the prosecution of the facts qualified as:

*BANKING AND FINANCIAL SOLICITATION BY A

The court ordered the prosecution of the following offences: *banking and financial solicitation by an unauthorised person. committed from 1 July 2008 to 30 September 2008 in Paris and on the national territory:

*AGORAVE MONEY LAUNDERING I HABITUAL ASSISTANCE TO AN INVESTMENT OPERATION. DISSIMULATION OR CONVERSION OF THE PROCEEDS OF A DELIBERY.

July 2008 to 30 September 2008 in Paris and on national territory;

- declared Dieter KIEFER GUILTY of the offences of:

*BANKING OR FINANCIAL SOLICITATION BY A

committed from 1 January 2004 to 30 June 2008 in Paris and on national territory:

*AGGRAVATED MONEY LAUNDERING: HABITUAL ASSISTANCE TO AN INVESTMENT OPERATION. DISSIMULATION OR CONVERSION OF THE PROCEEDS OF A DELIBERY.

I January 2004 to 30 June 2008 in Paris and on the national territory.

- sentenced Dieter KIEFER to a criminal prison term of TEN

EIGHT MONTHS,

Having regard to Article 132-31 paragraph 1 of the Criminal Code:

- In view of Article 132-31 paragraph 1 of the Criminal Code: "The execution of this sentence shall be suspended in its entirety, under the conditions provided for by these articles,

- ordered Dieter KIEFER to pay a fine of THREE HUNDRED THOUSAND EUROS (300,000 euros).

- declared Olivier BAUDRY GUILTY of the alleged facts of:

*BANKING OR FINANCIAL SOLICITATION BY A

committed from October 2007 to March 2009 in Paris and on the national territory: .

*AGORAVE MONEY LAUNDERING: HABITUAL ASSISTANCE TO AN INVESTMENT OPERATION. DISSIMULATION OR CONVERSION OF THE PROCEEDS OF A Felony. committed from

October 2007 to March 2009 in Paris and on national territory;

- sentenced BAUDRY Olivier to TWELVE MONTHS in prison,

Having regard to Article 132-31 al.J of the Criminal Code:

- said that the execution of this sentence will be suspended in full, under the conditions provided for by these articles;

- ordered BAUDRY Olivier to pay a fine of TWO HUNDRED THOUSAND EUROS (200,000 euros).

- declared Philippe WICK NOT GUILTY AND dismissed him in part from the prosecution of the facts qualified as:

*BANKING OR FINANCIAL SOLICITATION BY A

committed from 1 April 2007 to 31 September 2007 in Paris and on the national territory:

*AGORAVE MONEY LAUNDERING: HABITUAL ASSISTANCE TO AN INVESTMENT OPERATION. DISSIMULATION OR CONVERSION OF THE PROCEEDS OF A DELIBERY - committed from 1 April 2007 to 31 September 2007 in Paris and on the national territory;

- declared Philiooe WICK GUILTY of the facts qualified as :

*BANKING OR FINANCIAL CANVASSING BY A

committed from 2004 to 31 March 2007 in Paris and on national territory:

*AGGRAVATED MONEY LAUNDERING: HABITUAL ASSISTANCE TO AN INVESTMENT OPERATION. DISSIMULATION OR CONVERSION OF THE PROCEEDS OF A DELIBERY. committed from 2004

to 31 March 2007 in Paris and on the national territory,

- sentenced Philippe WICK to TWELVE MONTHS in prison.

Having regard to Article 132-31 paragraph / of the Criminal Code:

- said that the execution of this sentence will be suspended in its entirety, under the conditions provided for by these articles.

- ordered Philippe WICK to pay a fine of TWO HUNDRED THOUSAND EUROS (200,000 euros).

 

***

-Declared UBS AG GUILTY of the alleged facts of:

*BANKING OR FINANCIAL SOLICITATION BY A

unauthorised person, committed from 2004 to 2011 in Paris and on the national territory:

*AGORAVE MONEY LAUNDERING: HABITUAL ASSISTANCE TO AN INVESTMENT OPERATION. DISSIMULATION OR CONVERSION OF THE PROCEEDS OF A CRIME, committed from 2004

and until 2012 in Paris and on the national territory, in Switzerland;

Combined application of Articles 131-38 of the Criminal Code, which provides that the maximum fine applicable to legal persons is five times that provided for legal persons by the law that punishes the offence, and Article 324-3 of the Criminal Code, which provides that the fines mentioned in Articles 324-1 and 324-2 may be increased to half the value of the assets or funds involved in the money laundering operations.

- ordered UBS AG to pay a fine of THREE BILLION SEVEN HUNDRED MILLION EUROS (EUR 3,700,000,000).

***

It will be necessary to proceed with the distribution of the sureties pursuant to Articles 142-2 paragraph 1 and 2 and 142-3 paragraph 2.

1 and 2 and 142-3 paragraph 2 of the Code of Criminal Procedure.

***

ON THE CIVIL ACTION :

- declared the French State's civil action admissible,

- condemned UBS FRANCE SOLIDARILY. UBS AG. KIEFER

Dieter. WICK Philippe, BAUDRY Olivier. to pay to the FRENCH STATE. civil party. the sum of EIGHT HUNDRED MILLION EUROS (800,000,000 euros) in damages,

- ordered EACH of UBS FRANCE, UBS AG. KIEFER Dieter,

WICK Philippe, BAUDRY Olivier. to pay to the FRENCH STATE, as a civil party, the sum of TWENTY THOUSAND EUROS (20,000 euros) on the basis of Article 475-1 of the Code of Criminal Procedure.

Appeal lodged by :

- UBS FRANCE, on 20 February 2019, its appeal relating to both the criminal and civil provisions.

- UBS AG, on 20 February 2019, its appeal concerning both the criminal and civil provisions.

- Mr DE FAYET Patrick, on 20 February 2019, his appeal being limited to the criminal provisions.

- The Public Prosecutor on 20 February 2019 against Mr DE FAYET Patrick. UBS FRANCE. UBS AG.

- Mr BAUDRY Olivier. on 28 February 2019, his appeal being limited to the civil provisions.

- Mr. Public Prosecutor, on 28 February 2019 against Mr. BAUDRY Olivier.

- The public prosecutor, on 01 March 2019 against Mr WEIL Raoul

- Mr D'HALLUIN Hervé, on 01 March 2019, his appeal relating to both criminal and civil proceedings.

- Mr WICK Philippe, on 01 March 2019, his appeal concerning both criminal and civil sanctions.

- Mr. KIEFER Dieter, on 01 March 2019, his appeal concerning both criminal and civil provisions.

- The Public Prosecutor, on 01 March 2019 against Mr D'HALLUIN Hervé, Mr WICK Philippe, Mr KIEFER Dieter.

- FRENCH STATE. 06 March 2019 against Mr WEIL Raoul. Mr D'HALLUIN Hervé. Mr WICK Philiooe. Mr DE FAYET Patrick. Mr KIEFER Dieter. Mr BAUDRY Olivier. UBS FRANCE, UBS AG, its appeal being limited to the civil provisions.

PROGRESS OF THE DEBATES:

The president noted the presence of the defendants, both natural and legal persons, and assisted by their counsel, at the hearing on March 8, 2021.

Mr CORNUT-GENTILLE Pierre, lawyer for the defendant Olivier BAUDRY, submitted conclusions in limine litis, which were endorsed by the president and the clerk of the court and attached to the file.

Maître MAREMBERT Thierrv and Maître SUSSMAN Arthur, lawyers for the defendant Hervé D'HALLUIN, filed submissions in limine litis, which were endorsed by the President and the Registrar and attached to the file.

Maître STASSE Julia and Maître PARTOUCHE Clara, lawyers for the defendant Dieter KIEFER, have filed submissions of objection to the nullity of the proceedings, which have been endorsed by the President and the Registrar and attached to the file.

Mr CHEMLA Denis and Mr MAROUETTY Hiopolvte, lawyers for the defendant legal entity UBS AG, have filed submissions on the inadmissibility of the motions for dismissal and on the statute of limitations, which have been referred to by the president and the clerk of the court and attached to the file.

Mr. DEZEUZE Eric, lawyer for the defendant legal entity UBS FRANCE, submitted conclusions on the exception of nullity, which were approved by the president and the clerk of the court and attached to the file.

Mr. BOUGARTCHEV Kiril and Mr. MORIN Nathan, lawyers at the Paris bar, clerk's office P0048, have filed pleas of nullity, which have been approved by the president and the clerk of the court and attached to the file.

Mr Francois REYGROBELLET gave notice of the document that was referred to the court.

Mr François REYGROBELLET informed the defendants, legal entities and individuals, of their right during the debates to make statements, to answer the Questions put to them or to remain silent, in accordance with the provisions of article 406 of the code of criminal procedure,

Mrs. NOVAKOVICH Christine, legal representative of UBS AG, did not speak French sufficiently. the president appointed AMOUROUX Mathilde as interpreter and made her take an oath "to assist the justice system in its honour and conscience". This interpreter provided assistance whenever necessary.

Mr. Stéohan SMUCK took the oath of article 407 of the Code of Criminal Procedure and assisted whenever necessary.

The defendants summarily indicated the reasons for their appeal.

The Public Prosecutor's Office indicated that it was maintaining its appeal against Raoul WEIL.

Francois REYGROBELLET indicated that a Question orioritaire de constitutionnalité was filed with the clerk's office by Maître DEZEUZE, lawyer for the defendant UBS FRANCE.

The following were heard on the priority question of constitutionality

Mr DEZEUZE, lawyer for UBS FRANCE, in his observations in support of the priority question of constitutionality that he has filed, and requests that it be examined together with the merits;

Maître Normand-BODARD indicates that he does not see any objection to the priority question of constitutionality being examined with the merits.

The ministry forgets that it is satisfied with the priority question of constitutionality as well as with the conclusions in limine litis.

The president asks if there are any other priority questions of constitutionality.

No other counsel wishes to file a priority question of constitutionality.

The question put by Maître DEZEUZE will be studied with the merits of the case.

 

***

Mr MAREMBERT, counsel for D'HALLUIN Hervé, informed the court that an objection to the nullity of the order for referral to the criminal court, already raised before the court, was brought before the court.

The President asks to record that the nullities raised are strictly limited to the written submissions.

Maître BOURGARTCHEV, lawyer for WICK Philippe, informed the court that an exception of nullity tending to see the nullity of the arrest warrant, already invoked before the court, is taken up before the court.

Maître STASSE - lawyer for KJEFER Dieter informed the court that an exception to the nullity of the arrest warrant, already invoked before the court, was taken up before the court.

Mr CORNUT-GENTILLE, BAUDRY's lawyer, informed the court that an exception to the nullity of the arrest warrant, already raised before the court, was brought before the court:

-of the reQuisition addressed to the DNEF on 16 July 2015 (D2154) as well as the transmission and inclusion in the file

- the summons sent by the examining magistrates to the DNEF to obtain information from the Swiss tax authorities (D1096 to D1098: D1162: D1166 to D1167: D1720: D1721: D1728:

D2133) and the subsequent requests for assistance (Dl 163: D1164: Dl 168: Dl 169: Dl 171: Dl 172)) as well as all the elements, documents, acts and reports obtained through administrative assistance with Switzerland (i.e. mainly the documents marked D1724. D1726. D1727. D1918. D1924, D1987, D2036, D2037, D2057, D2136. D2137. D2138. and D2139).

-The transmission and inclusion in the file of all the elements, documents, acts and reports relating to French taxpayers who were clients of UBS AG and who used a so-called "regularisation" procedure (in particular documents D1786. D1912. D1914. D1919. D1935. D1937. D1940. D2021. D2022. D2024. D2025. D2026. D2027. D2028. D2340. D2341. D2342. D2343. D2381. D2383. D2384. and seals UBS ONE, UBS TWO, UBS THREE, UBS FOUR, UBS CINO).

-All the elements, documents, acts and minutes relating to witness no. 119 (in particular his deposition in D1640).

Mr TEMIME and Mr CHEMLA, counsel for UBS AG, informed the court that submissions seeking a declaration of inadmissibility of evidence had been filed.

The exceptions of nullity and conclusions in limine litis were heard:

Mr MAREMBERT, lawyer for D'HALLUIN Hervé, in his observations in support of his conclusions concerning the objections of nullity concerning the application for annulment of the ORTC, filed.

Maître BOURGARTCHEV - lawyer for WICK Philippe in his observations in support of his conclusions concerning the exceptions of nullity concerning the request for annulment of the arrest warrant and the subsequent acts up to the ORTC; filed.

Maître STASSE - lawyer for KIEFER Dieter in his observations in support of his conclusions concerning the objections of nullity concerning the request for cancellation of the arrest warrant, filed.

Maître NORMAND-BODARD in response to the objections of nullity. He specified that these submissions were not directed against Mr D'HALLUIN.

The Advocate General wishes to reply in one go to the objections of nullity.

Maître BOURGARTCHEV, lawyer for WICK Philippe, wishes to reply to the French State's submissions.

Maître CORNOT-GENTILLE, lawyer for BAUDRY, in his observations in support of his conclusions requesting the annulment of certain procedural acts.

Maître TEMIME, lawyer for UBS AG, in his observations in support of his submissions for the inadmissibility of the means of proof.

Mr CHEMLA, lawyer for UBS AG, in his observations in support of his conclusions concerning the documents removed from the debates and requesting that the incident not be joined to the merits in accordance with article 459 of the CPP.

Mr DEZEUZE, lawyer for UBS France SA, raises issues that were not raised either at the investigation stage or at first instance, requesting the cancellation of the documents referred to in the conclusions filed.

The President asked the defendants' lawyers if any of them had new objections to raise or wished to take the floor.

No lawyer wished to take the floor.

Then. the debates could not be completed during the same hearing. the court ordered that they continue at the public hearing of 9 March 2021 at 9:00 a.m.

***

At the public hearing of 9 March 2021, the president noted the presence of

The President noted the presence of the defendants, both individuals and legal entities, assisted by their counsel, and indicated that the floor would be given to the civil party and the public prosecutor.

The following were heard on the objections of nullity:

Xavier NORMAND-BODARD, counsel for the FRENCH STATE, in his observations in support of his conclusions seeking the rejection of the objections to nullity raised by the defence.

 

The Ministry of Justice in the person of Mrs. FUSINA and Mr. ROQUES in its replies concerning the objections of nullity raised by the defence, in support of their submissions transmitted to the court on 8 March 2021:

- In accordance with Article 459 of the Code of Criminal Procedure, which obliges it to do so, the court should examine the merits of all the objections raised by the parties, since no provision affecting public order is at issue,

- As a main point, declare that Messrs WICK. BAUDRY and KIEFER. UBS France SA and UBS AG are inadmissible to raise objections of nullity under Article 385 paragraph 3 of the Code of Criminal Procedure,

- In the alternative, dismiss all the objections and rule on the merits in a single judgment.

Maître MAREMBERT in reply to the prosecution's submissions concerning M D'HALLUIN and indicating that he reiterates his requests.

Maître CHEMLA in reply to the prosecution's submissions concerning UBS AG.

Maître DEZEUZE in reply to the prosecution's submissions.

Maître BOUGARTCHEV in reply to the prosecution's submissions.

The President asks the lawyers if they have any documents to submit. The President asks the lawyers if any of them wish to intervene

again. No other counsel wished to speak.

The Court indicates that it will suspend the hearing to deliberate on the exceptions.

After deliberating, the court indicated that it would hear the incidents on the merits in application of article 459 paragraph 3 of the code of criminal procedure.

The President indicated before the report that the defendants or their lawyers had the possibility of expressing themselves if they so wished after the report.

The following were heard on the merits

ROBERT Hervé was heard in his report.

Then. the debates could not be completed during the same hearing. the court ordered that they continue at the public hearing of 15 March 2021 at 9:30 am.

 

***

At the public hearing of 15 March 2021, the President noted the presence of the defendants, both individuals and legal entities, assisted by their counsel, and indicated that D'HALLUIN Hervé would be heard in his examination.

The Advocate General stated that she did not question the partial acquittals of D'HALLUIN Hervé and DE FAYET Patrick.

The defence of D'HALLUIN Hervé stated that it would not be submitting any submissions on the merits at this stage of the examination of the case.

The President again informed the defendants, both individuals and legal entities, of their right to make statements during the debates, to answer the Questions put to them or to remain silent, in accordance with the provisions of Article 406 of the Code of Criminal Procedure,

The following were heard:

The defendant D'HALLUIN Hervé was questioned and heard in his defence.

The defendant DE FAYET Patrick was questioned and heard in his defence.

Then, as the debates could not be completed during the same hearing, the court ordered that they continue at the public hearing of 16 March 2021.        **

At the public hearing of 16 March 2021, the President noted the presence of the defendants, both natural and legal persons, assisted by their counsel.

The following were heard:

The defendant WICK Philippe was questioned and heard in his defence.

The defendant BAUDRY Olivier was questioned and heard in his defence.

The defendant KIEFER Dieter was questioned and heard in his defence.

Then, as the debates could not be completed during the same hearing, the court ordered that they continue at the public hearing of 17 March 2021.

***

At the public hearing of 17 March 2021, the presence of the defendants, both natural and legal persons, and assisted by their counsel, was noted.

The following were heard:

The defendant WEIL Raoul. assisted by the interpreter, was questioned and heard in his defence.

DE LEUSSE Jean Frédéric. in his capacity as Chairman of the Management Board of UBS SA was questioned and heard in his defence on behalf of UBS SA.

LORIN-GUERIN Béatrice, in her capacity as member of the Management Board of UBS SA was questioned and heard in her defence on behalf of UBS SA.

Since the debates could not be completed during the same hearing, the court ordered that they be continued at the public hearing of 22 March 2021.

***

At the public hearing of 22 March 2021, the President noted the presence of the defendants, both natural and legal persons, assisted by their counsel.

Maître NORMAND-BODARD, lawyer for the civil party ETAT FRANCAIS, filed submissions which were approved by the President and the Registrar and attached to the file.

Maître CORNOT-GENTILLE, lawyer for the defendant BAUDRY Olivier, has filed pleadings which have been approved by the president and the clerk and attached to the file.

Maître MAREMBERT and Maître SUSSMAN, lawyers for the defendant D'HALLUIN Hervé. Francois, Bernard have filed pleadings which have been approved by the president and the clerk and attached to the file.

Maître LE BORGNE, lawyer for the defendant DE FAYET Patrick, substituting Maître SAINT PALAIS, has filed pleadings which have been approved by the president and the clerk of the court and attached to the file.

Maître STASSE Julia and Maître PARTOUCHE Clara, lawyers for the defendant K.IEFER Dieter, filed submissions which were approved by the president and the clerk and attached to the file.

Mr CHEMLA Denis - Mr TEMIME Hervé and Mr MAROUETTY Hippolyte, lawyers for the defendant UBS AG, filed submissions which were approved by the president and the clerk of the court and attached to the file.

Maître DEZEUZE, lawyer for the defendant UBS SA, filed submissions which were approved by the president and the clerk of the court and attached to the file.

Maîtres DUPEUX Jean-Yves and Maitre AUTAIN Xavier, lawyers for the defendant WEIL Raoul, filed submissions which were approved by the president and the clerk and attached to the file.

Maître BOUGARTCHEV, lawyer for the defendant WICK Philiooe, filed pleadings which were approved by the president and the clerk and attached to the file.

These submissions having been completed, the court resumed the questioning of the representatives of UBS SA.

The following were heard:

DE LEUSSE Jean Frédéric. in his capacity as Chairman of the Management Board, continuing his examination.

LORIN-GUERIN Béatrice in her capacity as member of the Management Board, continuing her examination.

Then, the court heard the representative of UBS AG.

NOVAKOVIC Christine representing UBS AG was questioned and heard in her defence.

The questioning having ended, the floor was given to counsel for the civil party.

Mtre NORMAND-BODARD in his plea. The Public Prosecutor's Office in its submissions.

Then, as the debates could not be completed during the same hearing, the court ordered that they be continued at the public hearing of 23 March 2021.

***

At the public hearing of 23 March 2021, the President noted the presence of the defendants, both natural and legal persons, assisted by their counsel. -

The following were heard:

Mr MAREMBERT and Mr SUSSMAN, lawyers for the defendant D'HALLUIN Hervé in their pleadings in support of their conclusions. The defendant was the last to speak.

Maître LE BORGNE. substituting Maître SAINT PALAIS. lawyer for the defendant DE FAYET Patrick, in his plea, in support of his conclusions.

The defendant was the last to speak.

The defendant was the last to speak.

Maître CORNUT-GENTILLE, lawyer for the defendant BAUDRY Olivier, in his plea. in support of his conclusions.

The defendant was the last to speak.

Maître BOUGARTCHEV, lawyer for the defendant WICK Philippe, in his plea. in support of his conclusions.

The defendant was the last to speak.

Maître STASSE and Maître PARTOUCHE, lawyers for the defendant KIEFER Dieter, in their pleadings in support of their conclusions.

The defendant was the last to speak.

Maître AUTAIN and Maître DUPEUX, lawyers for the defendant WEIL Raoul, in their pleadings in support of their conclusions.

The defendant was the last to speak.

Maître DEZEUZE lawyer for the defendant legal entity UBS FRANCE in his plea in support of his conclusions.

DE LEUSSE Jean Frédéric and LORIN-GUERIN Béatrice spoke last.

Then the debates could not be continued during the same hearing. The court ordered that they continue at the public hearing of 24 March 2021.

***

At the public hearing of 24 March 2021, the president noted the presence of the defendants, both natural and legal persons, assisted by their counsel

The following were heard:

Maître CHEMLA. Maître TEMIME. Mr. MAROUETIY, lawyers for the defendant legal entity UBS AG in their pleadings in support of their conclusions.

NOVAKOVIC Christine spoke last.

Then the court informed the parties that the case was taken under advisement and the President declared that the judgment would be delivered at the public hearing of 27 September 2021.

And on this day, 27 September 2021, the President informed the parties that due to the impediment of one of the judges of the chamber for health reasons, the deliberation effective 30 June 2021 could not be finalised. Consequently, these deliberations are extended to 13 December 2021.

And this iour. on 13 December 2021. decision rendered after deliberation in accordance with the law. pursuant to Articles 485. 486 and 512 of the Code of Criminal Procedure, and in the presence of the Public Prosecutor and the clerk, deliberated, read out the judgment.

DECISION:

Rendered after deliberation in accordance with the law, Ruling on the appeals lodged against the above-mentioned judgment,

Having regard to the judgment of this Court before 28 June refusing to transmit the priority question of constitutionality filed by the Bank UBS SA

 

REMINDER OF THE FACTS AND THE PROCEDURE

On 22 February 2011, the President of the Autorité de contrôle prudentiel (ACP), acting on the basis of Article L. 612-28 of the Monetary and Financial Code, forwarded to the Paris public prosecutor letters that could reveal the commission of tax fraud and unlawful canvassing involving the bank UBS SA, a subsidiary of the Swiss bank UBS AG.

The ACP sent a letter dated 27 September 2010, addressed by Nicolas Forissier, former head of the internal audit department of the bank in question, and an anonymous letter, accompanied by documents, addressed on 27 December 2010 to the members of its inspection department, which had just begun an on-site inspection mission at the premises of UBS SA.

According to the documents sent by the ACP, account managers of UBS AG, a Swiss company, had approached French clients or prospects in France with the complicity of its subsidiary UBS SA. In addition, UBS SA's account managers allegedly contributed to tax evasion operations by French clients or prospects. These cross-border operations were allegedly monitored by the management of UBS SA through notes taken in notebooks known internally as "milk books", a summary method used between 2002 and 2007 to avoid leaving traces of the flows in the bank's applications, while allowing the recording of what would have given rise to a sharing of commissions between the French sales teams and those of the Swiss parent company.

The ACP's inspection mission, which focused on UBS SA's compliance control system, was to examine the procedures and resources in force within the bank in this area, including with regard to cross-border client transactions. The on-site inspection began in early December 2010 and continued until 22 April 2011.

 

The inspection report led to the opening in April 2012 of sanctioning procedure no. 2012-03 by the CPA's banking sector sub-college against UBS AG.

 

According to the anonymous letter (second letter received), UBS AG, relayed by the management team of UBS SA, was exerting strong pressure on French employees in order to obtain their cooperation. Thierry de CHAMBURE, Chairman of the Management Board of UBS AG, was designated as one of those responsible for the implementation of the "milk book" and the "bullying" of employees who opposed these illegal actions.

 

On 1 March 2011, the preliminary investigation was entrusted to the National Judicial Customs Service (SNDJ). The first investigations made it possible to identify the authors of the anonymous letters sent to the CPA in the persons of Stéphanie GIBAUD, Olivier FORGUES, Thomas LE FORESTIER and Serge HUSS, former employees of UBS SA, who, after their dismissal, had referred the matter to the Labour Inspectorate or summoned their employer to appear before the competent industrial tribunals, in particular for acts that they qualified as moral harassment.

 

The opening of a judicial investigation was requested on 12 April 2012, in particular for the charges of illegal canvassing, complicity in this offence and organised money laundering. The examining magistrates referred the matter to the SNDJ to continue the judicial investigation.

 

At the administrative level, the inspection conducted by the ACP's inspection department led to the opening of a sanction procedure notified by the AMF Board on 24 May 2012 to UBS SA in accordance with Articles L. 612-38 and R. 612-35 et seq. of the Monetary and Financial Code.

 

On 25 June 2013, the CPA Enforcement Committee issued a reprimand and a financial penalty of EUR 10 million. In a decision dated 5 November 2014, the Conseil d'Etat rejected UBS SA's appeal to overturn the decision of 25 June 2013.

 

Hervé d'HALLUIN was indicted on 12 July 2012 for complicity in unlawful canvassing of French or domestically resident prospective customers, money laundering.

 

On 18 October 2012, Patrick de FAYET was indicted for complicity in unlawful canvassing of banks and financial institutions, and laundering of funds derived from this offence. He contested the facts of which he was accused. He claimed that he had carried out his duties at UBS in all honesty, i.e. in compliance with banking and tax regulations.

 

On 17 March 2015, UBS SA was indicted for having, on national territory, from 2004 to 2008, been an accomplice by providing means for the aggravated laundering of tax fraud committed in Switzerland, from 2004 to 2012, for which UBS AG was accused, by being an accomplice to the illegal canvassing on national territory for which UBS AG was accused and by referring to UBS AG clients or prospects wishing to open an undeclared account in Switzerland; it was placed under the status of assisted witness for acts with the same legal qualification, but allegedly committed between 2009 and 2012.

 

On 6 June 2013, UBS AG, represented by Oliver BARTHOLET, General Counsel Wealth Group Managing Director, was indicted for the offence of unlawful canvassing of banks or financial institutions and was granted assisted witness status for the offences of laundering of unlawful canvassing of banks or financial institutions and aggravated laundering of tax fraud.

The investigating magistrate's referral was, by supplementary indictment of 26 March 2014, extended to cover tax fraud laundering committed between 2004 and 2012, concerning sums that were not the proceeds of the illegal canvassing initially referred to the investigating magistrate. This extension of the scope of their referral led to additional indictments of both legal entities and natural persons.

 

Dieter KIEFER refused to be heard by the investigating magistrates. As a result, on 9 January 2015, the latter issued an arrest warrant for him.

Philippe WICK refused to be heard by the investigating magistrates. Consequently, on 9 January 2015, an arrest warrant was issued for him.

Olivier BAUDRY refused to be heard by the investigating magistrates. Consequently, on 9 January 2015, an arrest warrant was issued for him.

Raoul WEIL was indicted for illegal canvassing and aggravated tax fraud laundering on 29 September 2015.

 

The judicial investigations led to the collection of information and elements allowing the organisation and operation of the two banking establishments denounced to be understood.

 UBS SA, a public limited company with a management and supervisory board, was created in 1999 with an initial capital of €49 million. Its registered office was located at 69, boulevard Haussmann in Paris and remains there today. Internally called UBSF, it was a sub-subsidiary of UBS AG (Aktien Gesellschaft - joint stock company), the parent company of the UBS group. Its share capital is held by UBS Holding AG, which in turn is wholly owned by a Dutch company, a wholly owned subsidiary of the Swiss company UBS AG.

 

UBS Holding SA was responsible for supervising the risk, compliance and periodic audit departments of UBS SA and two French subsidiaries of the UBS Group. It had no operational activities.

The creation of the banking company under French law was the result of UBS AG's decision, following the adoption of the euro, to develop its presence outside the Swiss Confederation and to invest in "mature" European domestic markets, including the French market, in order to win over new clients by offering its proven asset management services.

 

UBS SA, responsible for the "Wealth Management" business, was attached to the "Private Banking France International" division of UBS AG, commonly known as the "France Business Unit". It had several branches or desks in the provinces, including Bordeaux, Cannes, Lille, Lyon, Marseille, Nantes and Strasbourg.

 

Under the terms of UBS AG's commercial charter, which came into force on 27 February 2008, the wealth management business was to be managed by the Bank's own subsidiaries.

In 2008, the wealth management activities of the French private bank were divided into three segments according to the amount of assets entrusted by clients: 1° Core 4ffluent (CorA): from 250 K€ to three ME - sector entrusted to Anne LONGIN; 2° High Net Worth (HNW): from three to thirty M€ - sector managed by Gérald MATTHIEU;

 

3° Key Clients (KC): over thirty million euros - sector managed by Joëlle Pacteau.

In addition to the central offices in Paris, the regional branches or "provincial desks" had their own teams of sales representatives, qualified as "Client Advisors" (CA), who were placed under the direction of the sales manager or "Head qf Front", then a manager qualified as "DeskHead", for each business segment. The sales staff were then grouped into teams for each segment under the responsibility of a 'Head'. Between 2007 and 2008, UBS AG strengthened its teams by recruiting forty new CAs. The bank encouraged internal mobility between teams and synergy between the French desk (e.g. "CorA France Domestic") and the Swiss desk (equivalent to "CorA International"). In this context, UBS SA offered one- to three-year rotations in equivalent teams abroad, particularly in Switzerland.

 

805 natural persons and 322 legal entities were declared as direct sellers for UBS SA.

 

Jean-Frédéric de LEUSSE, Chairman of the Management Board, told the examining magistrate that UBS SA had reached its break-even point in 2006-2007 with assets under management of more than ten billion euros (cumulative collection since the company was founded).

 

In 2009, heavily impacted by the subprime crisis, UBS SA recorded losses of more than 60 million euros. UBS AG reorganised, placing the two lower segments Core 4ffluent and High Net Worth under the responsibility of a single manager. The Key Client segment became Ultra High Net Worth and CoreA became Private Wealth. As part of the restructuring in 2009, its Lille, Cannes, Aix-en-Provence and Toulouse branches were closed. At the end of 2010, UBS SA had 263 employees; the assets deposited in its books amounted to €9.4bn, i.e. less than 1% of the funds managed globally by the group, for around thirteen thousand clients, half of whom were not French residents. Over the period 2007-2011, its net banking income amounted to €65 million.

The defendants Hervé d'HALLUIN and Patrick de FAYET were dismissed as part of the redundancy plan in autumn 2009. The first had managed the UBS SA office in Lille from the last quarter of 2005 to the summer of 2008, which he had joined in December 2002 as a senior account manager. The second, who joined UBS SA as a sales manager in 2003, was from 2004 until his dismissal coordinator of the commercial activity of the various private client segments of UBS SA.

 

Some of the witnesses interviewed confirmed that UBS SA was not making any profits, or very little, and that the entity was not profitable. Keeping the French subsidiary was a way for UBS AG to "suck in French savings".

 

Olivier FORGUES stated that UBS SA was losing money every year. If its majority shareholder UBS AG continued to inject funds and operate its subsidiary, it was, according to him, because it ended up making more money than it lost. It had set up a tax evasion process, he said. In the United States, it encouraged its clients to transfer funds to offshore accounts by pretending to buy works of art at the Art Base! Miami Beach event.

 

In May 2013, the CPA disclosed to the investigation file, following a judicial request, the various types of financial support provided by UBS Holding SA to UBS SA and by UBS AG to the French entities of the group over the period 2000-2012. It can be seen that the annual results of UBS SA remained in deficit from 2000 to 2005 inclusive, in 2006, 2008 and 2009 and that UBS Holding SA proceeded in 2001, 2002, 2003 to capital increases of 30 M€, 40.6 ME and 120.7 ME, then of 15 ME, 25 ME and 75 ME respectively in 2006, 2008 and 2009. In 2005, it granted a subordinated loan of €50m and an interest-free loan of €500m, which it refinanced in full with UBS AG.

 

Most of the remuneration of the company's directors, Jean-Louis de Montesqulou and Pierre Poyet, successive chairmen of UBS SA from 2004 to 2007, was in fact paid by UBS AG, namely

- a percentage of 80% in 2004,

- a percentage of 100% in 2005,

- 75% in 2006.

 

In 2007, salaries, expenses, bonuses and allowances were re-invoiced by UBS AG to UBS AG.

 

This invoicing by the French subsidiary to the Swiss parent company also concerned UBS SA employees seconded to Switzerland (Xavier BELJ Emmanuel DESLANQUES, Mickal DEFARGE, Lison JOURDE and Stephan SCHUTZE). Although they were employed by UBS SA, they were in fact working for UBS AG.

 

UBS SA invoiced UBS AG for numerous expenses, such as workstation equipment (central units and screens), mobile telephony, the use of videoconferencing equipment, and the maintenance of private banking applications (WM&SB). According to the information provided by UBS SA, the amounts re-invoiced amounted to

- in 2009 to €532,710,

- in 2010 to €94,899,

- in 2011 to €195,050.

This invoicing from France to Switzerland had the effect of increasing the turnover of the French subsidiary.

 

In May 2011, Thierry de CHAMBURE, Chairman of the Management Board of UBS SA, was replaced at the head of the credit institution by Alain ROBERT-TISSOT, a Swiss national, who was also Chairman of the bank's Supervisory Board. He was succeeded in March 2012 by Jean-Frédéric de LEUSSE, until then Deputy Managing Director, responsible for international development at Crédit Agricole.

 

In autumn 2011, UBS SA implemented a new job protection plan. The sales teams were reorganised. Customer advisor positions had been created to ensure the link between the ACs and the customers.

 

UBS SA appeared to be dependent on its Swiss parent company UBS AG. Each department of the French bank had a counterpart department in Switzerland with which the French employees worked directly. Its UBS AG databases were managed on servers in Switzerland or London, which was susceptible to incursions from the parent company.

 

The ACP inspection team noted in its report that for the control of the legal compliance with French law of cross-border operations conducted by its own employees, UBS SA had no other means than to rely on its parent company, in view of the lack of human resources in the compliance system and the inaccessibility for the employees of the control function to all the information necessary for the proper conduct of this control.

 

Florence MERCIER-BAUDRJER, inspector, stated that all requests for access to the institution's applications where the ACP was auditing were subject to the prior agreement of UBS AG, which had "surprised her team". -

 

To define the links between UBS SA and UBS AG, Omar BERKOUK reported a statement made by the chairman of the management board, Pierre POYET: "UBS SA was under the supervision of UBS AG, a wholly-owned subsidiary, and as such, when I spoke to Pierre Poyet about the bank's excesses, he replied that he was just a simple civil servant in the service of the Swiss head office.

In his alert dated 19 December 2008, Nicolas FORISSIER mentioned 'panni five points about the hierarchical and functional attachment to Philippe WICK, of the Sport Entertainment Group (SEG) department of UBS SA, headed by Caroline DURET.

 

In order to clarify the facts before them, the investigators conducted a new search at the headquarters of UBS SA on 2 July 2015. The investigating magistrates asked the representatives of the person under investigation to make available to them the e-mail archives of nine high-level employees or managers of UBS SA (Béatrice LORIN-GUERIN, Pierre POYET, Patrick de FAYET, Béatrice PANTEGNIES, Emmanuel BUCAILLE, Thierry de CHAMBURE, Gabriel CASTELLO, Thierry CHOUVELON, François VERNET), for the period between 1 January 2004 and 31 December 2009.

 

On 3 August 2015, UBS SA handed over a first hard disk containing the mailboxes of six people for the period between 15 December 2008 and 15 December 2009 (UBS seal 4-2). On 9 September 2015, the bank handed over a second hard drive containing the mailboxes of nine people between January 2004 and December 2008. These archives contained only a very small number of e-mails with Raoul WEIL as a recipient or sender. For example, in the case of Philippe WICK, Patrick de FAYET's Swiss counterpart, for the period from 2004 to 2007, only four direct e-mails were provided. In view of this limited documentary base, this limited number of exchanges led one to believe that the archives handed over to the investigators appeared incomplete.

UBS AG, a global bank in the field of asset management, was formed by the merger of Union Bank of Switzerland and Swiss Bank Corporation in 1998.

 

UBS AG was not allowed to prospect or canvass clients in France as it did not have the "European passport" provided for by Directive 2006/48/EC and Directive 2004/39, nor did it have a French banking licence. It had set up direct or indirect subsidiaries in the countries where it was embarking on a policy of conquering banking markets. UBS AG's Wealth Management International division was organised by major geographical areas (Western Europe, Southern Europe, etc.), which were themselves divided into sectors. It had an attached France International department with offices in Geneva (the largest), Lausanne, Basel and Zurich.

 

UBS AG had accounts in its books for French clients, which its "France International" department managed. It was headed from 2001 by Philippe WICK, head of the France Desk, assisted by Daniel LIPP from 2004 for the CoreA. Olivier BAUDRY succeeded him in April 2007 before the department was taken over by Joëlle PACTEAU, who left UBS SA in April 2009.

 

It was noted that, in a letter to his teams, Olivier Baudry wrote181: "Philippe Wick will continue to work alongside me to ensure the success of the France Inti market through his coaching and advice in complex situations. He will also put his skills and extensive client experience at the service of the entire market and the bank.

 

According to information provided to the investigating judges (17 June 2014) by UBS AG the French market managed by its France International department, never accounted for 10% of the overall European market volume.

 

According to an answer given to the investigating magistrates on 29 April 2015, the France International department of UBS AG had the following 'approximate' staff numbers between 2008 and 2015

 

2008: 210 employees (as at 31 December)

2009: 182 employees (at 31 December)

2010: 153 employees (at 31 December)

2011: 149 employees (at 31 December)

2012: 143 employees (as at 31 December)

2013: 159 employees (as at 31 December)

2014: 145 employees (as at 31 December)

2015: 143 employees (at 31 March)

 

According to Pierre GERBIER CONDAMIN, an employee of UBS AG in Geneva, within the France International team, from March 2005 to January 2006, with the title of Deputy Director for the Family office, the France market was handled by UBS in Geneva, Basel and Lausanne and many French people worked in the same department as him. The Key Clients and HNW departments were respectively headed by Philippe WICK and Olivier BAUDRY and the Mass 4ffeuent by Rosario RIENZO. He was in charge of the large French clients, except for the professional sportsmen who were mainly "managed" by Philippe WICK, a former professional footballer.

 

His contact at UBS SA was mainly Patrick de FAYET. During a visit to Paris, Patrick de FAYET had made it clear to him that the links between UBS SA and UBS AG had to remain secret ("qfficially non-existent"). Some letters were sent to the personal addresses of employees, the witness said.

 

The witness, referred to in the proceedings as "anonymous no. 119", who had started working with UBS AG in 2000 as a CA with a portfolio of clients in the France International team in the Lausanne office, and had left in 2010, provided a description of the organisation chart of UBS AG and the way the bank operated: In Lausanne, there were two Desk heads, i.e. two segment managers: the Core 4ffeuent segment for assets between 250 KCHF and 2,000 KCHF, and the segment from 2,000 KCH titled HNWI (HiKh Net Worth Individuals), and which also included an account manager who dealt with Key Clients (over 50,000 KCHF).

 

In 2003, Philippe WICK, who was head of the France International department, was responsible for Daniel LIPP, who was in charge of the Core Affluent segment, Jean Baptiste AVENI, who was in charge of the HNWI segment, and Olivier BAUDRY, who was in charge of support, i.e. product campaigns, marketing, etc. In 2004, Daniel LIPP reported directly to Dieter KIEFER, as did Philippe WICK. This is evidence that the Core A segment was growing until 2007.       -

 

In October 2007, there was a change. Olivier BAUDRY had replaced the tandem of Philippe WICK and Daniel LIPP, and in turn reported directly to Dieter KIEFER.

 

In addition, the Core A segment in Geneva had grown significantly. In April 2009, Joëlle PACTEAU succeeded Olivier BAUDRY and, as head of the HNWI segment, Karel GAULTIER replaced Olivier BAUDRY.

 

The France International department reported to Dieter KIEFER, head of the Western Europe division of the wealth management business line (CEO Wealth Management Western Europe) from 2004 to August 2008. At UBS AG, the development of the international segment and its structuring began in 2001. Prior to that, the teams appeared to be very busy with the merger of the Swiss Bank Corporation (SBS) and UBS (which resulted in UBS).

 

In 2008 and 2009, the top management had changed. Raoul WEIL, global head of Wealth Management, was replaced by Jurg ZELTNER. France International was attached to Wealth Management Southern Europe, whereas previously this department was attached to Western Europe. This change in management seemed to be linked to the fact that UBS had been involved in litigation in the United States. In this respect, the BIRKENFELD case, in which Raoul WEIL's name already appeared, should be mentioned.

 

UBS AG sent the investigating magistrates the organisation chart of its France International department and its evolution from 2003 to 2007.

It identified :

1) Raoul WEIL as head of Wealth Management International;

2) Dieter KIEFER as head of Wealth Management Western Europe

3) Philippe WICK, Regional Market Manager France International.

From 2003 to 2006, Philippe WICK, Head of France International, but also Chairman of the Management Board of UBS SA at the time, Head of France Domestic, both reported to Dieter KIEFER, who reported to Raoul WEIL.

 

In 2007 and 2008, both Olivier BAUDRY, head of France International, and the President of UBS SA, still head of France Domestic, reported to Francesco MORA.

 

Finally, after October 2010, Joëlle Pacteau acted under the authority of Jakob STOIT, as did the President of UBS SA.

 

In its introductory statement, freely translated by Olivier BARTHOLET, UBS AG stated that it did not and would not assist in circumventing the regulatory obligations in force in France and that it had taken internal measures to ensure that its French clients made the necessary declarations to the French tax authorities.

 

The organisational charts of UBS AG's Wealth Management Division from 2003 to 2007 (not 2003 to 2013) superseded those previously disclosed. UBS AG provided a model of the document "Taxation of savings income by the EU - authorization for voluntary disclosure".

 

During the interrogation on 23 March 2015, UBS AG was particularly evasive in its answers on the evolution of the staff of its France International department within the WMI.

The investigations conducted in relation to the search for French clients led to the following data being collected:

 

UBS SA had approximately 13,000 clients, mostly individuals, at the end of 20 l O according to the decision of the Enforcement Committee of the Autorité de contrôle prudentiel issued on 25 June 2013. It had received some €9.4 billion in deposits in its books, i.e. less than 1% of the funds managed by the group as a whole. It was therefore a small banking institution on the French domestic market.

The clientele was segmented, as recalled in a presentation on 6 March 2007 by Anne Longin, head of sales at UBS SA, on the organisation of the Core Affluent in Paris.

Each segment had its own account managers, divided into "hunters" or "developers" responsible for canvassing clients and "farmers" (or "sit-downs" or "managers"), who managed accounts "as a good father". Each CA managed a portfolio of clients and was set targets in terms of Net New Money (NNM) deposited or invested in UBS accounts, on which their bonus was largely based.

 

Potential clients (or 'prospects') were targeted in a variety of ways, as evidenced by the testimonies collected and by internal UBS documents gathered:

- the specialised press (business circles, asset disposals, large fortunes, etc.), obituaries, "people" news

- regional legal and accounting professionals: notaries, business lawyers, chartered accountants

- former professional players or show business personalities.

In order to establish a business relationship with new clients, prescribers, the Swiss sales representatives were invited by UBS to approach business providers or intermediaries, in particular lawyers and notaries. These meetings took place during conferences organised at the La Pelle club in Marseille.

 

The main arguments developed with potential clients were the bank's long-standing experience in asset management and its Swiss discretion.

 

Qualified promotional events within the group of events were organised regularly by UBS AG to help connect CAs with their clients and individuals targeted as potential clients. The bank was mainly involved in sports tournaments (tennis, golf, etc.) or cultural and artistic events (concerts, art exhibitions, etc.). A chronological table of events organised by UBS SA between 2004 and 2011 was drawn up by the investigators, who used the bank's internal documentation seized during the search: it lists several dozen events organised throughout France.

 

The guests were chosen according to their centres of interest and French staff were instructed to be discreet about the identity of clients invited to these so-called "cross-border" events. There was clearly an approach to targeting individuals who were supposed to have "homogeneous behavioural characteristics" (Senator Marini's formula in his report on the security bill).

 

UBS AG had established a series of internal procedures to comply with anti-money laundering regulations and to enable the activities of its staff to be monitored. According to the conclusions of Eric DUPUY, the legal director of UBS SA, who was in charge during the period in question, and who had alerted his management as early as 2003, these procedures were not always respected and the databases concerned by the subject were defective or badly informed. On several occasions, the exhaustive collection of information on clients required to open an account (in particular the supporting documents to be provided) had been neglected. This was one of the conclusions reached by the internal audit department, particularly with regard to the missing documents in client files and the lack of client risk assessment for 50% of the files (CRP: Client Risk Profile).

 

The Swiss parent company was also developing a commercial approach to attracting French wealth management and fundraising clients through its "France International" department of the Wealth Management division, which had account managers attached to its various offices in Geneva, Lausanne, Basel and Zurich - 76 in total in France.

 

numbering 76 in 2014, a figure declared during questioning by its representative Andrew WILLIAMS. Its commercial prospection field also extended to the banking markets of the province of Quebec and the French-speaking states of Africa.

 

In 2003, on the initiative of Ursula SUTER, General Counsel of the Global Wealth Division between April 2002 and the end of April 2009, after the work of a working group set up by Peter KURER, UBS AG had put in place guidelines on the activity of its commercial agents in France by adopting and distributing a country paper, which it had successively revised in 2005 and 2009, under the name of supplementary instruction, and which it had again revised in 2012. To produce these instructions, the Swiss bank had relied on the advice or consultation of Parisian lawyers, first the firm Clifford Chance and then the firm Kramer Levin. Ursula SUTER stated that she had not been personally involved in the drafting of the country papers. The revision and updating of the country papers was done in conjunction with external lawyers. She therefore assumed that the documents complied with the provisions of Law No. 2003-706 of 1 August 2003 on direct marketing. The aim was also to make these 'country manuals' easier to understand for the ACs. This is why the presentation of the documents had evolved over time.

 

Peter KURER, a lawyer at the Zurich bar, Group General Counsel from 1 July 2001 to April 2008, when he was appointed chairman of the bank's board, generally confirmed Ursula SUTER's statements, adding that the bank had made every effort to achieve the best possible compliance. The UBS group had spent around one billion Swiss francs and mobilised 1500 to 2000 employees to achieve this goal. However, it did not remember the precise content of the country papers and had not personally monitored their drafting.

 

According to its usual policy on the subject, the bank indicated in points 3.2 and 4.2 that 'banking forms should, as far as possible, be signed outside France'. In paragraph 4.2, it was stated that the travelling AC should not cross the border with these documents, which should be 'sent directly to the booking centre, i.e. Switzerland or Luxembourg'. This sentence seemed to correspond to the hypothesis that the Swiss AC had made the client sign contractual documents on French territory.

 

After Raoul WEIL had raised the possibility that ambiguous or imperfect country papers had been distributed without his approval, the investigating magistrates proceeded to hear two senior members of the legal department of UBS AG, Ursula SUTER and Peter KURER, as assisted witnesses. They were then confronted with Raoul WEIL, the representative of UBS AG (Andrew WILLIAMS) and those of UBS SA (Jean-Frédéric de LEUSSE and Hervé MERCIER YTHIER). This confrontation focused in particular on the evolution and the revision process of the legal documents that serve as instructions to the Boards of Directors and that relate in particular to the notion of illicit canvassing under French law, the country papers. The wording of these documents contained a number of ambiguous formulations and did not always take account of changes in French legislation on direct marketing. They had been amended several times. A table showing this evolution was drawn up.

 

Raoul Weil told the investigating judge that 'the worst violations' of local legislation had been committed by former UBS CAs but at their new employers. He was referring to the US business unit.

 

The 2003 and 2005 country papers authorised cooperation with financial intermediaries in the following terms

- cooperation between UBS AG and CIFs (conseillers en investissements financiers) or FIMs (financial information management) established in France (2003) was not to lead to active marketing but was to be based on solicitation of FIMs ("sollicitation f!fforts qfthe FIM") (in 2003)

- Cooperation between UBS AG and FIMs established in France was presented as permissible provided that they were not used as an undue distribution channel of UBS AG in France: the FIM had to limit itself to "identifying" (i.e. indicating or signalling) UBS AG as a potential provider of banking or financial services and giving the prospect the name of a UBS AG contact person whom he or she could contact (in 2005). This cooperation was to be established by the conclusion of a contract.

 

Unlike the 2008 country paper, neither the November 2003 nor the December 2005 country paper indicated which department of UBS AG had produced them, when they came into force or the scope of their distribution.

 

Ursula SUTER argued that the use of the services of paid intermediaries (FIMs) / business introducers was not a means of circumventing the terms of the legislation on unlawful solicitation. Under Swiss law, there was a clear distinction between the role of the FIM and that of the bank: the FIM gave investment advice and the bank held the account and was only a custodian. Therefore, she said, the bank was not at all seen as using the FIM as a distribution channel for the bank's products. It refused to accept that the illegal soliciting could have been 'outsourced'.

It was unable to cite any individual case of violation of the relevant internal rules. It attached great importance to the bank's reputation, for which every failure, dispute or accusation was a disaster. The top bodies of UBS AG therefore wanted compliance at the highest level. According to her, Raoul Weil had always acted in the same way. It was only because he was facing criminal charges that he had been laid off in 2008. She stated that she was not aware of either Bradley Birkenfeld's or Nicolas Forissier's warning.

 

The written instruction relating to cross-border banking activities and the provision of financial services (the "France Country Paper" of November 2005), initially communicated by Olivier FORGUES, who explained that this document recalled a certain number of rules but also explained how to circumvent them.

 

The country papers were subject to revision and/or updating. The information stated that a first country paper for France had been drawn up in November 2003, a second in December 2005 and a final one in December 2008. This document had been updated on 3 April 2013 by 'supplementary instructions'. The 2003 instructions had been produced by the GWM Lega/ and compliance department headed by Ursula SUTER, both in 2002 (Roberto BAITEGAY) and in 2005 (Roland STUCKJ).

 

The 2003 and 2005 country papers referred to an independent document relating to "the supply of products and services by UBS AG to prospects and clients in France", called "product specific guidance" in the 2003 country paper and "Product Paper France" in the 2005 country paper.

 

In 2003 and 2005, the law firm Clifford Chance was consulted. In 2005, Roland STUCKI only asked Clifford Chance for a simple review of a draft of the 2005 country paper, without the formulation of a legal opinion ("Tour work shou/d be limited to a mark-up of the attached papers, no separate /ega/ opinion is required.").

 

In his e-mail of 15 November 2005 to Clifford Chance, Roberto BATTEFAY indicated that the 2003 country paper had been used as a basis for a number of education sessions organized for our Swiss client advisors.

 

Regarding promotional events organised on French territory, UBS AG (referred to as UBS SA in the French-language country paper) indicated, as early as the 2003 country paper, that UBS AG representatives could attend, but that these events had to be organised on behalf of UBS SA. This clarification was removed in 2008.

 

The 2005 Instructions recalled in the introduction the prohibition of "solicited or unsolicited visits to persons at their homes, places of work or places not dedicated to the marketing of products or services". They stated in section 3.1: "UBS (Switzerland) may respond to unsolicited requests from prospects. ("UBS may answer to unsolicited prospect requests"). This meant that, provided that these requests were not solicited by UBS AG, the bank could respond in France to prospect requests, wherever they were made, i.e. wherever the business managers met the prospects to establish the business relationship.

 

The 2005 country paper reiterated that UBS AG's CROs could not receive any investment orders from prospects or clients on French territory. When there were allegations about the milk books, the compliance department ordered an investigation.

 

The investigation procedure includes minutes of hearings in which it was reported that employees of the Swiss bank came to France. According to the statements of former French business managers and other employees who had witnessed these practices, the visits of their Swiss counterparts to France were to remain clandestine. They had business cards without the bank's logo. The Swiss CAs were canvassing in France with the help of a manual entitled Security Risk Governance, which contained the following recommendations

- Do not carry any client's name on your person;

- remove sensitive data in the event of an audit;

- use different hotels from those of other UBS employees;

- Be unpredictable in your travels (change your habits: restaurants, taxis, meetings with clients);

- remove sensitive computer data before crossing the border. To do this, they used encrypted UBS AG computers (the "TAS") and had a card to call a Swiss line in case of emergency.

Joëlle PACTEAU stated that there was no policy of cross-border cooperation between the UBS AG and Swiss CAs. According to her, there was no possibility of canvassing for Swiss CAs. As head of the France International department, she ensured that the relevant rules were observed.

 

Olivier FORGUES did not remember that when the Swiss CAs travelled to Paris, his superior, Anne Longin, instructed him to take charge of them and organise outings paid for with his professional bank card ("to buddy up" with them).

 

Olivier FORGUES had had discussions with the head of the Swiss CoreA, Rodolphe SOIRA, who wanted to recruit him. He had contacted him through Daniel LIPP (head of CorAflluents Switzerland in Geneva WMI) and Anne Longin (head of CorAffluent France). Rodolphe SOIRA had explained to him that he wanted to entrust him with a mission to canvass French clients wishing to invest in undeclared accounts opened in the books of UBS Geneva. The latter headed a team of 'hunters', i.e. canvassers in charge of collecting funds and assets from French clients. His ambition in recruiting Olivier FORGUES was to exceed his commercial objectives. The objective was to "steal as many clients as possible and bring them back to Switzerland, whether they are declared or not. Undeclared accounts are more profitable for the bank. Jean-Louis de MONTESQUIOU and Nicolas FORISSIER had dissuaded Olivier FORGUES from accepting this position. He was finally offered another position in London.

 

He indicated that he had brought this information to the attention of François VERNET, Head of Legal Affairs and Ethics, who had pretended not to understand, although Serge HUSS, Head of the Strasbourg branch, had informed him of the same facts.

 

The management of UBS SA, according to the documents in the file, was described as having always encouraged its sales staff to collaborate with the Swiss CAs. These operations, which were linked to the internal policy of collaboration between the French and Swiss CAs, were referred to within the bank as 'cross-border'. On the occasion of Joëlle Pacteau's appointment as head of the France International department, Dieter Kiefer sent an e-mail to his Dear Colleagues on 16 March 2007 in which he mentioned that she should implement a systematic use of best practices and strengthen a close cooperation with our colleagues in France Domestic.

 

In an individual e-mail dated 31 October 2007, Olivier BAUDRY thanked Patrick de FAYET "for the collaboration this year between our two units which I found very fruitful. Despite your doubts, which I can understand, I am convinced that if we continue in the climate of trust that we have been able to create, this collaboration will develop further in 2008. As a matter of fact, I am a direct report of Dieter and I know that he will be under pressure to achieve the new cost/income ratio in France and will therefore do my best to support you in this task.

 

The file contains the programme of a meeting of the Boards of Directors of the France International department held in Geneva, Board Room on 20 June 2008, under the authority of Olivier Baudry, during which the Domestic Collaboration project was discussed for an hour and a half, presented by Patrick de Fayet, and giving rise to exchanges on Cross-Border activities.

According to Serge HUSS, Director of the UBS Strasbourg branch, the French CAs were encouraged to share business with the Swiss CAs. This was the purpose of the seminars organised by UBS in Switzerland. The Swiss and French sales staff were asked to coordinate their work so that no two CAs were dealing with the same client.

 

The years 2005 and 2006 were the peak of the bank's success. Olivier BAUDRY, responsible for UBS Switzerland for French clients, came every two months to the Desk Head meeting in Paris.

Olivier FORGUES, business manager of UBS SA, reported that "UBS SA organised meetings to discuss the optimisation of synergies between CorA France and Chia Switzerland (medium-sized clients, i.e. between 250,000 and 5 million euros). He recalled having had the opportunity to meet, at the Beau Rivage Hotel in Lausanne, the team of his Swiss counterparts dedicated to the offshore activity in Switzerland.

 

The former Chairman of the Management Board of UBS SA, Jean-Louis de MONTESQUIOU, stated during the investigation that he had forbidden the Swiss canvassers to set foot on Boulevard Haussmann. However, it had been much more difficult to keep this resolution when he had come under the control of Dieter KIEFER. Every quarter, he came across Swiss CAs ("the green men"). Dieter KIEFER came to France to meet clients without telling him. He said:

"Everyone reported it to me, including the account managers. About ten times, it happened that clients let me down by telling me that they had met Swiss CAs. Even I ran into two of them once at the airport when I was picking up my children. Some of the Swiss CAs often came on 'events go(f).

 

If they were paid for trips and luxury hotels it was not for nothing of course. Some of the organisation charts were revealing. He had at least 10 to 15 people working at the France International Desk. I suspected that they did not stay all their days in Geneva. These became illegal when the law on canvassing became law in 2002 or 2003.

 

It should be noted that the proceedings include documents that seem to characterise a strategy of collaboration between the parent company and its daughter. An internal UBS SA document organised the practical arrangements for visits to its premises by people from outside the French bank, notably under the following headings: - Case of appointments between a UBS (France) SA client, a UBS (France) SA sales advisor and a sales advisor who is not a member of UBS (France) SA'. It was specified that "any meeting with a client/prospect of UBS (France) SA and taking place on the premises of UBS (France) SA must be held in the presence of a sales consultant of UBS (France) SA".

 

- In the case of meetings between a client of a UBS (France) SA group entity and a sales adviser who is not a member of UBS (France) SA, the following statement was made It appeared to be possible to deduce from this document base that CAs from UBS group companies, not belonging to UBS (France) SA, came to meet clients in premises that UBS (France) SA made available at its Paris headquarters.

 

Another internal UBS AG memo entitled "Cross-Border Banking and Financial Services Activities Country Paper France", dated November 2005, stated that in the context of cooperation with UBS SA and other third parties: "Client contact at UBS domestic premises with the involvement of UBS French entities is only permitted if approved by the client/prospect and UBSSA.

The document stated: "referral of possible UBS (France) SA clients to UBS SA only on an occasional basis".

 

On 7 November 2006, from 10.00 a.m. to 2.30 p.m., a meeting was held in Geneva with the client/prospect. On 7 November 2006, from 10 a.m. to 2.30 p.m., a workshop was held in Geneva entitled "CorA France Domestic. Synerf?ies with CorA Inti", co-organised by Patrick de FAYET, Gabriel CASTELLO, core-affiuent coordinator for Western Europe, and Daniel LIPP, head of the CoreA client segment of the France International department of UBS AG, which resulted in a 79-page PowerPoint document. On page IO, the objective was to cross-refer twenty clients per year per account manager between France and Switzerland.

 

Joël PERLE, head of the CoreA segment of the Lyon office and national head of Leverage synergies international, international collaboration lever, spoke about developing good "Dom/Intl" practices for collaboration between desks. He regretted that "successes depend on individuals alone and not on the structure", that the "hunting (or organisation of events) {is/are} carried out by CAs without consultation with the desk in the territory concerned". It was recommended that joint meetings should be held, that a report should be made to the contributing CA after a visit to the prospect, and that pairs of desks should be set up to ensure permanent follow-up and exchange. He did not hide the question of the risks incurred by the employees.

 

Andrée MOISY-NOSA, an account manager at the Strasbourg branch, took part in a seminar on synergies between the French and Swiss desks on 7 November 2006, during which Joël PERIE discussed the dangers of illegal canvassing for the bank's employees. The aim was to develop a common clientele with the Swiss CAs who canvass on the national territory.

 

A document entitled "Core Affluent Paris, Geneva 9 November 2006" includes the presentation of the CorA teams in France. A reading of this document reveals that this presentation took the form of a "workshop", with UBS SA employees including Patrick de FAYET, Béatrice LORIN-GUERIN, Director of Human Resources, and Joël PERIE, from the Lyon office, together with representatives of UBS AG. UBS AG's sales staff (UBS AG's Core Affluent Domestics) appeared to have been clearly involved in this commercial strategy in synergy.

 

It was noted that this commercial policy was a source of tension, as reported by Anne LONGIN-GUYOT: the regional desk heads and certain ACs complained about the presence of the Swiss. They complained to Patrick de FAYET, who is described as saying that he could do nothing about it.

 

This cooperation, revealed by the documentary basis of the file, is likely to explain, from the point of view of the investigating judge, the exchanges set up for the organisation of events. Stéphanie GIBAUD, with four employees, was responsible for organising 'event platforms' for the ACs in order to develop their network with their clients and prospects. Between 1999 and 2008, she was responsible for organising between eighty and one hundred sporting or cultural events that enabled sales representatives to meet their customers. The aim of the promotional events was to prospect or maintain the address book and business relationships of the ACs.

 

She collaborated with her counterparts at UBS AG: her Geneva-based counterpart for the international market, Sophie DUCREY (2000 to 2002), then Katia CRISCI (2002 to 2006) and Tarda RIZZELLO (2006 to 2007), who was replaced by Delphine GROUX. They exchanged the planning of events. UBS AG Boards of Directors attended events in Switzerland and France organised directly by UBS AG and UBS AG Boards of Directors attended events in France organised by Stéphanie GIBAUD. Her testimony is supported by e-mails exchanged in April and May 2005 between a Board member named David ROSSIER, Katia CRISCI and Stéphanie GIBAUD. The former confirmed his participation in the Lille Golf Trophy and requested the invitation of three couples of French nationals living in the Nord department. He wrote on 12 May 2005: "Here is my guest list for Lille to check with the On-shore. (...) Can you take care of receiving the invitations? //_will have to send them from France. I'll send you greeting cards to put in the envelope. Thank you."

 

 

Quotas of guests, French residents, were allocated to Swiss businessmen. An email from DUBUIS, CA of the Basel agency, dated 3 June 2004 can be quoted as an illustration: "I confirm my participation in the event on 21 June in Bouffémont. You will find below a fine list of prospects to invite: (...). " This was followed by a list of six French residents. By e-mail of the following 7th June, he asked to add to his list the following prospect for the Bouffémont golf event: Lennart BRAG -551, Avenue Raymond Poincaré -75016 Paris.

The exploitation of multiple email exchanges to which lists were sometimes attached, and documents seized during the search, enabled the investigators to establish a general list of guests at the events concerned: there were French nationals, for example Messrs. Henry-Louis de LA GRANGE, Jean Claude DASSIER, Michel BOLLORE, President of France Essor, Jo (Joëlle) and Guy BEDOS, Benoît ARNAUD, Liliane BETTENCOURT, Laurent BLANC, Nicole and Gilbert COULIER, producers of Johnny HALLYDAY, Charles GASSOT.

 

The marketing department of UBS AG's France department also organised events in France during the period covered by the prevention proceedings. In addition to a table of the events organised in 2002, a Power Point presentation dated 14 November 2006 of the events planned for 2007 was available in the proceedings. to which Tania RIZZELLO of Marketing Western Europe in Geneva sent Stéphanie GIBAUD an e-mail dated 12 December 2008.

 

According to the investigators and the investigating magistrate, it appeared that the cooperation of the two banking entities had led to irregular practices.

 

As early as January 2004, i.e. a few months after the entry into force of the Financial Security Act of 1 August 2003, Eric DUPUY, General Counsel of UBS SA between 1999 and 2004, had drawn the attention of Jean-Louis de MONTESQUIOU, Chairman of the Management Board of the bank, to the illegal canvassing activities of Swiss CAs on French territory. He had also alerted him to the obligation to comply with the rules on the prevention of money laundering and to the malfunctions he had observed in this area.

 

According to Eric DUPUY, there was a French clientele holding undeclared accounts in the Swiss bank's books. He had been informed of this situation as soon as he arrived at UBS by Martin LIECHTI. He had also learned that dozens of Swiss CAs travelled to France every year to meet clients and prospects. He had noticed that they were canvassing, particularly during events. They wore a silver pin on their lapel to facilitate their identification.

 

The Internal Audit Department (Legal Internai Audit or LIA) of UBS SA, headed by Nicolas FORISSIER, had carried out several missions, including one establishing "dysfunctions in terms of international cooperation and canvassing" over the period 2005-2007. Believing that he had been forced by his superiors to modify the terms of his audit report and that his recommendations had been ignored, Nicolas FORISSIER decided to resort to the whistleblowing procedure. In his alert dated 19 December 2008, four other points were mentioned in No. 2: the canvassing of Swiss CAs on the premises of UBS SA or during events, even though Messrs de FAYET and VERNET were informed of these practices (in particular, that of Juan Moreno in Bordeaux between 2006 and 2008).

 

Olivier FORGUES stated that the rapprochement between the Swiss and French CAs was intended to encourage joint business, in particular through the exchange of clients. For example, he had recommended one of his clients to a Swiss colleague to transfer his assets deposited at Crédit Suisse in Lausanne to a UBS account in Lausanne. The transaction had been recorded in the milk books. These practices were systematic. He had had the opportunity to meet, at the Beau Rivage Hotel in Lausanne, the team of his Swiss counterparts dedicated to offshore activity in Switzerland.

During the investigation procedure, recourse was made to the procedure of the witness heard anonymously.

 

This witness, referred to as number 119, a business manager at UBS AG from 2000 to 2010, was explicit during his hearing by one of the investigating magistrates:

 

"If the bank had vovaf!es for us in France. it was not only to shake hands and make connections. We had objectives and had to report back. When we came back from France, we had to give a report and we were told to start our sentences by saying: "At the client's request..., we are carrying out this or that operation. We met them at their home or in a hotel, in a public place. Sometimes we also met them in the offices of UBS AG, but this was strictly forbidden. In our reports, I did not necessarily indicate where I had met my client. I would like to point out that these meetings were a target and we were told that the meetings would take place at least three or four times a year. In March 2010, I remember that we were told that within a month everyone must have done at least one vova!le. because there had been a small stoppage at the end of 2009, I don't remember which case, perhaps the Falciani affair.

 

Anne LONGIN-GUYOT, as a representative of UBS SA, stated that the Swiss CAs travelled to the Paris headquarters of UBS SA and asked their French colleagues for advice. She mentioned Frédéric PRAZ and Christophe MATHEY by name, who met with clients in the lobbies of major hotels near Boulevard Haussmann, in particular at the Bedford Hotel in the Rue del'Arcade in the ge arrondissement.

 

Thomas LE FORESTIER, UBS SA's business manager from 2006 to 2009, mentioned at the hearing meetings between French clients and Swiss CAs, at the clients' homes, at the bank's headquarters on Boulevard Haussmann, at the Café de la Paix, Place de l'Opéra.

 

Witness no. 119 described the instructions given to the Swiss CAs during their stays on French territory: "For us, it was a computer arsenal to remain discreet, in particular these laptops that we took on mission to France. We were told to empty them before crossing the border, on the way out and on the way back. Before leaving on a mission, we prepared all the documents we needed in Switzerland on a virtual platform. In France, on the other hand, we could log on to this platform and load all the documents we needed, which were only available during the time we had planned. For the client, it was digital accounts, and also trusts, foundations, life insurance policies, quality companies; to which you have to add financial products that allow you to be outside the Savings Directive.

 

On his computer, the AC was editing the account opening document. It bore neither the client's name nor his contact details.

An anonymous e-mail was also noted. Its author (an anonymous e-mail sent on 19 February 2007 to Patrick de FAYET, former director of private banking, then managing director of UBS SA) mentioned a 'problem (which) is therefore not part of a Strasbourg-Basel collaboration but of a more global France-Switzerland collaboration'.

 

Most of the former employees of UBS SA who had denounced internal dysfunctions - including illicit canvassing - or provided support to whistleblowers, had been victims of moral harassment and then dismissed. With the support of the labour inspectorate, some, such as Serge HUSS, former manager of the UBS branch in Strasbourg, won their case before the industrial tribunal. Other employees had agreed to sign a confidentiality clause concerning their knowledge of the bank's operations when they were dismissed, in return for substantial compensation.

Stéphanie GlBAUD filed a complaint, notably on the grounds of obstructing the mission of the secretary of the CHSCT, which was registered with the Paris public prosecutor's office on 10 December 2010.

Olivier FORGUES lodged a complaint on 31 May 2011 against Ms. LORIN-GUERIN, Ms. PERRIN, Mr. de Fayet, Mr. MATHIEU, Mr. VERNET and Mr. de CHAMBURE for moral harassment. On 6 April 2012, the Paris public prosecutor requested that a judicial investigation be opened into the charges of moral harassment against Nicolas FORISSIER; obstruction of the regular functioning of the CHSCT, in this case by obstructing the missions of a staff representative, Stéphanie GIBAUD, committed in Paris between 6 April and 31 December 2009. Several documents from this judicial investigation were placed in the file for the present case. Nicolas FORISSIER was a civil party.

 

It was held that the bank's document prepared for the consultation and information meeting of the CA network of 7 November 2007 entitled "Success proven practices Dom/Inti - collaboration between desks", did not hide the fact that among the points to be improved in the commercial cooperation policy between the parent company and the French subsidiary, it was necessary to include the prevention of the "risks incurred by employees/position of UBS on the subject".

 

Béatrice PANTEGNIES, a direct collaborator of Patrick de FAYET, presented the bank as a Swiss bank that comes to France to find its clients. She referred to the Swiss CAs as the "little green men". They did not come to the premises of UBS SA but attended the events in 2002, 2003 and 2004. They were CAs from UBS AG's France desk, always the same ones, whose manager was Philippe WICK. The prospects were targeted using a software program called DIANE.

 

Stéphanie GIBAUD stated that she was a direct witness to the illegal canvassing carried out by the Swiss CAs in France. She reported that following the search of Patrick de FAYET's office in 2008, her superior, Catherine Denis, had asked her to destroy all documents relating to events organised since 1999, for example the conferences held at the Club de la Pelle in Marseille during which lawyers and notaries had been invited by UBS in 2008 to meet Swiss sales representatives. She did not comply. In December 2008, on her return from holiday, she noticed that the excel files had been redacted of the information concerning the identity of clients, prospects and business introducers.) When interviewed by the labour inspectorate on 18 February 2010 (see D87/2), she had already denounced the disappearance of her computer files relating to the organisation of promotional events by UBS SA. In her capacity as secretary of the CHSCT of UBS SA, Stéphanie GIBAUD had referred the matter to the Labour Inspectorate at the beginning of April 2009, more specifically to Ma jorie Jacques, Labour Inspector. These files contained the names of clients, prospects and corresponding business managers in France and Switzerland who had taken part in events since the creation of the bank.

 

Stéphanie GIBAUD had also reported this incident in the minutes of the CHSCT meeting of 30 June 2009.

 

In response, UBS SA sued her for defamation before the Paris Police Court. She was acquitted on the basis of material evidence and numerous testimonies attesting to her good faith. In the hearing, she reported that the internal investigation into the disappearance of her computer files had been conducted by Hervé MERCIER YTHIER, head of the IT department at UBS SA.

According to Pierre GERBIER CONDAMIN, contacts between Swiss CAs and invited clients could be made during events, the aim being to create a falsely fortuitous link between CAs and clients. UBS AG functioned as a 'ghost canvassing office' for UBS AG.

 

Anne LONGIN-GUYOT confirmed the presence of Swiss CAs at events. She was able to quote a French client, Eric GOURMELON, who in 2005 or 2006 had been approached by a Swiss CA in Lausanne during a golf event. The latter had transferred part of his portfolio to Switzerland by declaring it. By inviting UBS clients with a passion for golf, the Swiss CA managed to convince them to transfer their assets to other entities of the group. Furthermore, Jean René Lacroix, CA of the CorA in Paris and then in Toulouse, maintained too close a relationship with the Swiss CAs.

Stéphanie GIBAUD claimed that several Swiss CAs had been recognised in photographs taken during promotional events organised by UBS SA for the benefit of French clients or appeared on lists of Swiss CAs present at events from 2002 to 2009. She provided documents, in particular email exchanges, attesting to the reality of illegal canvassing by UBS AG's CAs.

Catherine MARROT, Senior CA in Bordeaux, testified that, on the instructions of her director, she had gone to the GolfTrophée event in Evian on two occasions in 2002 and 2004. She had met Dieter KIEFER and also Swiss CAs. French clients and prospects were invited by UBS SA and UBS AG. In Bordeaux, she sometimes met the Swiss CA Juan Moreno.

 

Véronique ZAMORA, a former executive assistant at UBS SA's Bordeaux branch, said that the Swiss business managers 'came for events. For example, when we invited French clients to events, such as golf days with dinner in châteaux. Sometimes, there were also people who were not UBS clients, such as lawyers or others, who were likely to bring in clients. The CAs would send me the names and addresses, and I would take care of the reservations and send out the invitations.

 

Laurent LORENTZ, a CA attached to the Strasbourg branch, denied having had any business relations with the Swiss CAs Nicolas OBERSON, Olivier BAUDRY, Gabriela JURT and Christophe PEIRY.

He nevertheless confirmed the presence of Swiss CAs, notably Gabriel DUBUIS, at the Alsatian UBS Golf Trophy event in June 2007 in Ilkirch. They were there "to do business not to play golf".

Andrée MOISY-NOSA, an account manager at the Strasbourg branch, admitted to having participated in events where there were also Swiss CAs, who obviously, given their aggressive sales approach, were there to canvass. They were in competition with the French CAs and took customers from them. This phenomenon lasted from 2002 to 2007. On 7 November 2006, she had also taken part in a seminar on synergies between the French and Swiss desks, during which Joël Perié had discussed the dangers of illegal canvassing for the bank's employees. The objective was to develop a common clientele with the Swiss CAs who canvass on the national territory.

 

With regard to events, on presentation of photographs taken at the 2007 UBS Golf Trophy, Serge HUSS identified a Swiss CA, Gabriel DUBUIS, from UBS Basel. The events were used to facilitate business with the people met on this occasion.

 

Hervé d'HALLUIN, who was indicted, stated that the events were not a major focus of the Lille branch's development but rather a showcase. He admitted that it was quite possible that the Swiss CAs had used the events to illegally canvass clients or prospects in France; but the members of his team at the Lille agency that he managed, he claimed, had not helped them. He was nevertheless under strong pressure from the Swiss CAs who 'came in every two months'. This was clearly a marketing strategy of UBS AG, to which he had not personally lent a hand. He claimed that he had merely helped clients to 'relocate' to Belgium.

 

With the authorisation of his hierarchy, more precisely Patrick de FAYET, he had agreed to organise events for clients in Lille, financed by UBS AG, which had a marketing budget and bore the financial burden, in particular a hunting event at La Planquette (Ferme de la Planquette - 62770 Rollancourt), organised on 2 December 2004 and then on 29 December 2005 (seal HAL7: Ferme de la Planquette 62770 Rollancourt). The owner of this commercial hunt, Raymond WYBAUX, was a prospect. Hervé d'HALLUIN co-signed with the Swiss CA Joanny DALLOZ - CA at the French desk of the international Wealth Management branch - invitations, on which the UBS logo did not appear, which were provided by the La Planquette hunt. The said DALLOZ came for these occasions. La Planquette Farm sent its invoices to UBS AG (€7,648 in 2004 and €6,500 in 2005).

 

The inauguration of the Lille office in June 2004 had already given rise to an event at the Lille Opera, entirely financed by UBS AG, which had its own contingent of guests, which placed the guests of the Lille office almost in the minority.

 

The defendant Hervé d'HALLUIN explained that Joanny DALLOZ was a CA at the French Desk of the Wealth Management International branch at UBS AG. He could not explain why the Swiss CA knew many French clients or prospects from the Lille region who were invited to the events (Bernard MISSENARD, Vincent DUFOUR, Dominique de la ROCHEFOUCAULT, Marie-Christine AMIOT, Guy ALDECOA, Claude SANTIN),

 

Unlike the Lyon office, the development model of the Lille office was not based on events. Nevertheless, it had invited some clients to the Alinghi event (crew and competition catamaran sponsored by UBS for the America's Cup), to ! (Basel), a concert by the Verbier Festival Orchestra, the Roland-Garros Tournament and the Evian Master (UBS Golf Trophy). Swiss CAs were always present. Sometimes they made appointments with his clients.

 

As for witness No. 119, he confirmed that he participated in events in order to meet

"He confirmed that he participated in events in order to meet 'lots of people in a very short time'. Like his colleagues, he wrote down as much information as possible about the profiles of the people he met in a notebook on the fly. At other events, he made sure he was back at the same table, to continue courting the client or prospect. Sometimes it took a long time to bring a prospect to UBS. He also met with clients in France outside of the events. This was mostly referral (i.e. recommendations) from other clients who told him that this or that person might be "interested". Cold calling did not work. Events were used to make contact. Contracts were signed later. On his computer, the CA edited the account opening document. It bore neither the name of the client nor the date or place of signature. The client signed it in Paris. The CA placed these documents in an envelope, which he labelled in his name or his wife's or his children's name, and which he collected in Switzerland.

 

Nicolas FORJSSIER, Head of Local Internal Audit (LIA), who had carried out an audit of all the activities of the UBS bank (private management, investment banking and asset management) between 18 and 29 June 2007, explained that he had discovered during his audit 'expense reports from French sales staff that mentioned Swiss colleagues who were present with them, particularly during events'. He had reported this to his superiors and to the compliance officer, François VERNET, who had not supported him at all. His attention to the irregularities had been drawn between September and December 2006 by his colleagues Serge HUSS and Omar BERKOUK. He had also passed on documents to the head of the audit led by Martin PETER, "chie/ compliance officer group", after the alert he had launched.

 

He acknowledged having written the anonymous letter of 27 September 2010 addressed to the Autorité de contrôle prudentiel.

On the canvassing and commercial practices of UBS, he explained the distinction between the "hunter" or CA standing up (i.e. Cyril BERGER, Philippe MICHER or Omar BERKOUK) who did the canvassing and the "farmer" or CA sitting down who did not move around so much and managed a portfolio of clients remotely. They were helped by CA assistants. For every ten prospects they met, one signed with the bank.

 

Nicolas FORISSIER's audit of the Sport Entertainment Group (SEG) department of UBS SA established that this department was headed by an executive, Caroline DURET, who was directly attached to UBS AG, via Philippe WICK. An organisation chart submitted to the proceedings establishes this. Her mission was to seek out prospective clients to open accounts with UBS.

In police custody, Caroline DURET stated:

 

"Question: What functions did you perform at UBS?

Answer: I was an asset manager, a client manager. I started at SEG until 2003, 2004, then I went to KEY CLIENTS France International until 2005, where I didn't stay long, and finally to HNW Paris with several teams, which I left at the end of 2008. When I was at France International, there was a double management with Eric lliERON, in France and Philippe WICK, in Switzerland. There was an operational management which corresponded to asset management and which was directed by Eric THEROU or Patrick DE FAYET for example. Then there was management concerning the objectives to be achieved, development and client recruitment, which was directed by Philippe WICK in coordination with his counterpart at UBS France, Eric THERON and then Patrick de FAYET. Eric THERON was replaced by Patrick de FAYET. This segment dealt with issues between French clients and international expatriation or relocation needs.

 

Question: Did you have a démarcheur accreditation in France. If so, for what period?

Answer I After a year in the bank I had a card with my photo and a number and a stamp that I had at the office that gave me the right to canvass in France.

Question: Who was your direct superior at UBS? Answer: At the beginning, at the SEG, there was Eric THERON, Neil GRAINGER and Thomas EGGER. At Key Cleints, it was Eric THERON and Philippe WICK. At France International it was Patrick de FAYET and Philippe WICK. At the HNW, it was Patrick de FAYET and Anne LONGIN, then it was Patrie de FAYET and Gerald MAlliIEU and finally Gérald MATHIEU and Bruno CELLIER at the HNW in Paris when I returned from maternity leave around 2008.

 

The investigation procedure stated that this employee of UBS SA contributed to the opening of accounts in the Swiss parent company.

 

According to the procedure submitted to the court's appreciation, the directors of the regional branches, who were heard, gave credence to the idea that they were obliged to monitor the Swiss CAs to prevent them from making appointments directly in the branch. According to the statements of Miguel AZEVEDO, who worked under Nicolas FORISSIER in the audit from 2003 to 2006, 'those who complained the most were Omar BERKOUK and Serge HUSS (...). Serge HUSS in Strasbourg also complained quite a bit, as did Jean-Michel BENOIST in Bordeaux, but they said they resisted and refused to collaborate with the Swiss CAs". Olivier FORGUES indicated that he had informed François VERNET, the then compliance officer, of the illegal canvassing carried out by UBS. Similarly, Stéphanie GIBAUD, in her capacity as secretary of the CHSCT of UBS France, had referred the matter to the labour inspectorate at the beginning of April 2009, more specifically to Ms Marjorie Jacques, a labour inspector. She considered that "UBS France was covering up a financial .canvassing in favour of UBS Switzerland and was therefore organising .tax fraud". Jean-Louis de MONSTESQUIOU explained that the Swiss CAs were present on French territory. On ten or so occasions, clients have told me that they have met Swiss CAs. Even I met two of them at the airport once when I was picking up my children.

 

On the contrary. Alain BERTHAUT. head of the Marseille branch from the end of 2011 to September 2006. was unable to explain the existence of expense accounts issued for expenses incurred during meetings between clients and French CAs on which also appeared CAs from UBS AG. He admitted that UBS AG had been able to finance events organised in France. This could, in his view, be explained by the fact that the bank wanted to reward its relocated clients. He admitted to having attended events with Swiss CAs. Their participation could have had the objective of canvassing French clients. It was Stéphanie GIBAUD who informed them of the presence of Swiss sales representatives and prospects invited by UBS AG to the events. He also admitted that French CAs sometimes had links of interest with Swiss colleagues. BERTHAUT's testimony shows that he knew 'without having any material evidence, that the Swiss CAs were seeking to develop their business in France'.

 

The investigations conducted on this subject led to the following findings:

Consultation of the ROC customs file revealed that two Swiss directors of UBS AG. Flavio ROSSI and Rosario RIENZO. were mentioned, respectively, in connection with a breach of reporting obligations on 13 May 2004 and a declaration of capital on 4 December 2011.

 

In addition, in June 2011, judicial customs officials carried out surveillance at the Stade de Roland-Garros, located at Auteuil in Paris, as part of the event organised by UBS SA during the Paris international tennis tournament. The one carried out on 3 June 2011 led to the identification of Mrs LUCCHETA. invited with her husband by a French CA. Alain VIMARD. to attend one of the semi-finals. on the central court. after a lunch offered at the Roland Garros restaurant by the French Tennis Federation. Mme LUCCHETA. accompanied by her daughter. took advantage of the invitation. The tickets had been ordered in Zurich from the Tennis Europe company. The LUCCHETA couple presented the professional and asset profile of prospects likely to be of interest to UBS. In 20 IO. they declared annual income of 266,414 €: they were taxed for council tax at 42 avenue du Général de Gaulle 95250 Beauchamps (ten-room house. 272 m2 with two outbuildings) and for property tax at 54, avenue Victor Basch in Beauchamps and 6/8 avenue de Verdun in Taverny (95)

 

Henri-Louis LUCCHETA, born on 28 March 1962, was a director of SOGETRAV (of which he was the chairman until 25 January 2007) or is the tenant of the premises at 6/8 avenue de Verdun in Taverny, which he owned. The business of this SAS was general masonry and structural work. The majority shareholder was Vinci Construction France.

 

The surveillance did not reveal any meetings between these two people and Swiss CAs. However, one of them was present. This was Karel Brice GAULTIER ( or Brice CAREL or Brice CAREL CHRISTOPHE). who has been head of the HNWI segment (intermediate segment) of the France International department of UBS AG since April 2009. yes v had invited French clients through the Swiss company GPS Performance. which is based in Lausanne and specialises in sponsorship, communication and marketing. According to the testimonies collected, it was his brother who took care of the clients. This point of view was formally refuted in court by all the defendants. It should be added that there was no visual evidence of this.

 

However, it was recorded in the case file that Karel GAULTIER used two cellular lines opened by a Swiss telephone operator and associated with the numbers 0041 798267200 and 0041 796093929).  He did not have any telephone lines with French operators. From the analysis of the telephone system, confirmed by surveillance, it appeared that Karel GAULTIER was working in Switzerland. He made multiple return trips between Paris and Geneva using Air France and Easv Jet flights operated by UBS AG. He lived in France with his French wife, Charlotte DEWYNTER.

From January to summer 2011, his two mobile phone numbers had activated 10 417 times to relay terminals of French operators: incoming and outgoing calls, sms, internet connections (3581 incoming/outgoing calls and 3357 incoming/outgoing sms see D282). There were also contacts with telephone lines opened in the name of UBS SA and Thierry de CHAMBURE.

 

The investigating magistrates tried to identify "prospects" who, after canvassing, had become clients of UBS AG. They sent the National Tax Investigation Directorate a list of three hundred and four natural persons who were clients and prospects likely to have been canvassed by the Swiss bank's CAs ("prospect client table vl and v2") during individual meetings on national territory or on the occasion of cultural, sporting or charitable events organised on national territory or elsewhere, in order to identify those who had one or more bank accounts opened with UBS in Switzerland.

 

The tax authorities replied that three taxpayers, namely Pierre CLOUT, Roland LEGER and Jean-Marc BERLIERES, had declared that they held an account with UBS AG, and that four taxpayers, namely Jacques CANTRELLE, Pierre MOUILLEFARINE, René ACKER and Pascal BRUN, held such an account which they had not declared.

 

Pierre MOUILLEFARINE confirmed that he had an undeclared account in the books of UBS Switzerland.  He contested having been canvassed by CA Suisse. UBS did not give him any statement of account so that, once a year, he went to Geneva. However, during a search of Pierre MOUILLEFARINE's home, the investigators discovered a bank statement for an account opened at UBS AG.

 

Roland LEGER, former financial director of the ERAM group, had opened two accounts with UBS AG in 2003, with credits totalling €3,040,926 in 2008. These accounts were subsequently declared by his heirs to the DGFIP's "regularisation" unit in order to regularise their tax situation. His family, unaware of the existence of these accounts, could not provide any explanation to the investigators on how they had been opened.

 

The investigating magistrates were trying to clarify the practice called for in the file;

The investigating magistrates were trying to clarify the practice referred to in the file as "business recognition or asset transfer adjustments" (ATA).

It emerged from the investigation file that the collaborative policy of the French and Swiss desks was not without difficulty as to the remuneration to be received by a UBS SA CA who lost a client in his portfolio when he opted to relocate his assets to the books of UBS AG, and established a relationship with a prospect who chose to direct his funds immediately to the Swiss bank without going through its French subsidiary (Net new money). This situation necessitated the implementation of an application to manage Asset Transfer Adjustments (ATAs), which are recognitions of business between two account managers (AMs) who collect funds for UBS AG or UBS SA.

 

Its purpose was to correct the allocation rights of the funds collected between a referring CA (point of exit of the funds) and a receiving CA (point of entry of the funds). These corrections were taken into account in calculating the individual performance of the business managers and were used to determine the bonus which was then distributed to them in accordance with the annual targets set.

 

It was noted that the management of these business recognition documents and the operation of the associated application proved to be abstruse. The answers given by the banks were described in the procedure as being questionable.

 

It is recalled in the file that the inspection mission of the Autorité de contrôle prudentiel considered the explanations of UBS (France) SA concerning its business recognition system to be "unclear". The ACP concluded that UBS (France) SA had insufficient control over the compliance risk associated with cross-border activity. The anomalies identified showed that this lack of control was linked to the very organisation of UBS (France) SA. The following anomalies were noted

- There was no regulatory framework for cross-border activities in France. The "policy !{roup" relating to cross-border operations had not been translated into a local procedure;

- the permanent compliance control, governed by a 2006 procedure, did not map the risks of non-compliance and focused too much on "making up for the shortcomings of procedures";

- the "cross-bord_er committee" (created for cross-border activity) did not have a defined remit and no representative of the Risk Control and Compliance department participated. The governance elements of the 'cross-border committee' were also not defined, even though it was supposed to decide on the strategy in this area. Furthermore, there were no minutes or records of the content of the discussions and decisions taken (hence a lack of traceability). This "cross-border committee" seemed to exist only on paper;

- the ATA control system had weaknesses, particularly concerning the offshore unit dedicated to French clients in Switzerland. They were insufficiently controlled and documented;

- the persons in charge of compliance and control functions within UBS AG did not appear to exercise any control over visits by UBS AG employees in France to French clients or prospects, in violation of the regulations on banking and financial canvassing. Moreover, the compliance officer did not participate in the management committee;

- Finally, the 'mystery' of the use of UBS AG's computer application ReNew by UBS AG employees or by UBS AG employees for business referrals of prospects who had transferred funds from France to Switzerland was noted. The CPA was denied access to this application.

These findings led the CPA to conclude that UBS AG "had no other means than to rely on its Swiss-based parent company to verify the legal compliance (with French law) of cross-border transactions conducted by its own employees".

 

UBS SA provided the court with incomplete answers during the investigation to the questions and requests of the investigating judges aimed at clarifying and identifying the international ATAs.

Several stages must be distinguished.

 

On 17 June 2013, forty-one international ATAs were not explained and twenty-eight ATAs were partially documented.

 

On 18 June 2014, twenty-nine international ATAs were still not identified. On 11 March 2015, nineteen International ATAs were still not identified.

 

The list of unidentified international ATAs was shown in a table. The total amount of these ATAs was €163,820,791.

 

In its letter of 6 October 2015, UBS SA stated that the steps taken to identify 117 domestic ATAs explained almost all of the international ATAs that remained unclear.

 

UBS SA stated that the twelve 'cleaned' international ATAs 'therefore in reality represented numerous underlying transactions that are difficult to recompose directly'.

 

The Court notes that in a note dated 8 January 2016, UBS SA provided a number of clarifications and details on the work of reconstituting the ATAs that it had carried out and mentioned in its letter of 6 October 2015. According to the bank, the ATAs constituted a tool for very marginally weighting the calculation of the account managers' year-end bonus but in no way constituted an audit trail, nor were they part of the company's commercial accounting. Thus, UBS AG's CROs were under no obligation to keep any underlying evidence of ATA flows until May 2009, when an internal ATA management procedure was put in place. In addition, UBS AG had submitted an internal audit report on 23 May 2013 establishing the perfect correlation between the measured performance of the account managers (including ATAs) and their bonuses.

 

It is included in the judgment that, in his audit report of June 2007, Nicolas FORlSSIER mentioned the absence within the ATA system of a distinction between the commissions of the French CAs following an international transfer of client funds and those sanctioning the winning of a new client. The report also questioned the basis for the French CA's remuneration and assumed that the CA's intervention in the client's decision to invest abroad was the explanation. The recommendations in the report were therefore 'to deal with the ATAs' accounting outside the reporting of Net New Money and all justified movements'.

 

These recommendations appeared in the initial draft report which, according to FORISSIER, had been rectified in the final report by his hierarchy within UBS SA. There was no longer any information on the distribution of remuneration between French and foreign directors. The four versions of the report were attached to the information file.

 

The investigating magistrates also noted that the UBS SA executives, former employees in conflict with the bank or not, who were interviewed, confirmed the existence of 'milk books'. They described them as a means of establishing the amounts of commissions owed to French CAs for the relocation of a client to Switzerland. They had been set up and centralised by the Wealth Management department.

 

On this point, Nicolas FORISSIER explained to the investigators how the system of client referrals and business recognition worked. When a CA recommended a client to his French or foreign colleague, the business recognition was shared 50% so as to reward both sales representatives. When the flow concerned funds not declared to the tax authorities, it was qualified as 'simple money'. If the client was relocated abroad the recognition of business was l00%. He confirmed that he had been forced by his superiors to modify the wording of his 2007 audit report, particularly with regard to the ATA system (sharing of flows between French and foreign traders). The first version of his report had caused a real panic among Patrick de FAYET, who had decided to modify the rules for recording business recognitions: "The rules of the game of accounting for business recognitions of the CAs change within a month of the evaluations, the French CAs who will make an operation with the foreigner or even France, are obliged to integrate the said operations in the milk book to tie the past, present or future illegal operations in the existing illegal operations. In this new mechanism, CAs will only take 50% instead of 100% when they send a client to relocate, for example.

 

FORISSIER described Patrick de FAYET as the "account holder" of business recognitions. All legal and illegal transactions were checked each month by Dieter KIEFER. He explained how the bonus of a CA in France was calculated (PV 2):

The bonus was based on four indicators called Key Performance Indicator (KPI),

The bonus was based on four Key Performance Indicators (KPIs), broken down into three official and one unofficial criterion:

1 - the target Net New Money (or asset gathering) achieved;

2 - RoA: return on assets (income on product sold; return on investment or margin on a portfolio);

3 - Net income for the bank from investments offered to clients (production of net banking income, i.e. the bank's profit);

4 - Shadow accounting: the subjective part taking into account the relationship with the hierarchy and the collaboration with Switzerland (cross-border cooperation with Switzerland).

The file contains the documentary evidence of the use of this expression in an internal document of UBS AG. This document, dated 10 July 2002, under point 5-3 Recognitions (E. Schôn), deals with business recognitions:

 

"Successful recognitions within the French intermediary team and also those concerning individual clients of the desks will be recognised by 50% of NNM (shadow accounting). Cross-border cooperation is called for at all GAs[...] 21. E. Schôn will keep a list of NNM Shadow Accounts".

 

The investigating magistrates added to the file the documents relating to the whistleblowing by Nicolas FORISSIER. For the record, the latter had identified a discrepancy of €91,980,000 between the data produced by management control and that produced by the head of the business units with regard to the net commercial activity recorded in April 2007.

An internal presentation (WM Referral Program presentation - February 2008) outlined the procedure to be followed in the case of cross-border transactions. The CA who approached a prospect informed him that another CA would contact him to establish the business relationship, in order to avoid two CAs managing the same customer at the same time. In this context, it was stated that the CA, known as the "reference" CA (<<R. fferrlnf!. CA") and the "receiving" CA shared their commission (NNM) 50/50.

 

Cross-border financial flows between French and Swiss CAs were recognised by a virtual clearing system for the referring CA and a real one for the receiving CA. These flows were recorded in a computer database called 'Asset Transfer Acfjusments' (ATA), which was presented as a system for validating the commissions of the CAs in the same way as the 'carnets du lait'.

This made it possible to establish the recognition of business between CAs and to calculate the bonuses due to them after a cross-border transaction. Patrick de FAYET, assisted by Mrs LORIN-GUERIN, chaired the bonus committee in Paris. According to Serge HUSS, the Net New Money, recorded in the "milk books", was allocated to each salesman according to his contribution and after the clearing operation carried out by Patrick de FAYET and his Swiss counterpart Philippe WICK.

 

The information sought to reconstitute the volume of ATAs in number and value by using tables drawn up by the management control department (seized during the search and placed under the symbol UBS 1 G), which present by segment or branch, month by month, from 2005 to 2012, the amounts of Net New Money (NNM) reported in the ATAs, and the information communicated by UBS SA at the request of the court between November 2012 and January 2016.

 

From Annexes A (2005-2008), B (2009-2010-2010) and C (2012) communicated by UBS SA in response to the request of the investigating magistrates, it appears that between 2005 and 2011, the total amount of money recognised to UBS SA by the UBS AG group was equal to one and a half billion euros (€1503308,110), and the amount recognised to France by the UBS parent company was close to half a billion euros.

 

The list of natural persons or legal entities that had given rise to a recognition of business by a Swiss CA to a French CA was communicated at the initiative of the investigating judges to the National Tax Investigation Division (DNEF) in order to determine whether these persons had one or more bank accounts opened at the UBS bank in Switzerland.

 

UBS SA also provided an internal memo on the management of ATAs: between two UBS SA CAs (domestic ATAs) or international ATAs.

 

One of the investigating judges made the following findings after analysing the answers given by UBS AG.

 

It emerged from the operating report of 18 February 2013 that the cumulative ATA balances recognised by the companies of the UBS group to UBS AG from 2005 to 2012 amounted to €852 million, which meant, in the view of the investigating judge, that the 'rest of the world' had recognised at least €852 million more to France than France had to the 'rest of the world'.

The UBS group was described as having collected outside France, through the French establishment, €852m more than UBS SA had collected through other group companies.

 

The question arose as to what financial volume had been recognised by the foreigner in France. This amount corresponded to the sum of the recognition of business from the rest of the world to France, i.e. the positive ATA. According to the 'Answer' (i.e. Annexes A, B and C), this amount of money recognised was equal to €1,548,528,695 from 2005 to 2012, and €1,503,308,110 from 2005 to 2011.

 

It could be understood that this was the amount of money actually collected if the business recognition rate is equal to 100%. If the rate was 50%, the amount actually collected was double.

For the year 2012, "the only year for which UBS AG had communicated the business recognition rates", 15% of the amounts recognised had been recognised at 50%. This figure seems to mean that if 100 had been recognised, 115 had actually been collected (85 + (15x2)).

 

If we apply the same proportion to previous years, the amount of money collected abroad thanks to France is equal to

-1,780,807,000 € from 2005 to 2012

-1,718,804,000 from 2005 to 2011.

This amount does not include the sums of French taxpayers collected outside France, and which had not been the subject of a business recognition to a French CA.

 

According to the same "Answer", the amount of assets recognised by Switzerland to France was equal to :

 -486,030,924 € from 2005 to 2012;

- 472 256 150 € from 2005 to 2011.

If we consider that 15% of the amounts recognised were 50%, the amount of money collected by the bank UBS AG through its subsidiary UBS SA would be equal to €558,935,562 from 2005 to 2012 and €543,094,572 from 2005 to 2011.

 

In several successive responses provided on 17 June 2013, 20 June 2013 and 25 July 2013, UBS SA identified and explained a number of ATAs from abroad to France, and concluded on 25 July 2013 that it had identified 195 ATAs involving €1,335 million, but had failed to identify twenty-seven ATAs involving €70 million and had 'partially explained' ten ATAs involving €142 million (these were ATAs 'passed through the Head of Front', for which it had not identified the client concerned), i.e. a total of €212 million of ATAs.

 

As of 10 April 2014, two hundred and four individuals had received a negative response, one hundred and four had not received a response and five had received a positive response, according to the file.

 

According to the answers obtained following their various requests, the investigating magistrates drew up a summary diagram of the flows of information in which they distinguished between the sums collected in Switzerland from clients or prospects with business recognition: clients recommended by UBS SA to UBS AG, who go to UBS AG without having been canvassed (A).

Amounts collected from clients or prospects with business recognition: clients recommended by UBS AG to UBS AG, who go to UBS AG after having been canvassed (B).

 

Witness Pierre GERBIER CONDAMIN explained that "bonuses were paid to the ACs" into Swiss accounts, whether declared or not, or took the form of benefits in kind (invitations to trips or stays). The respective hierarchies of the two banks met regularly to verify and validate the business acknowledgements.

 

The investigation focused on clarifying what was commonly referred to as the 'milk books'.

 

The use of these milk books was denounced from the outset of the affair as a means of fraud by the initial denouncers in the transfer of funds between France and the Swiss Confederation.

Therefore, by opening an on-site inspection mission led by Florence MERCIER BAUDRIER, inspector of the Banque de France, at the headquarters of UBS SA from 2 December 20 lO to 22 April 2011, the college of the Autorité de contrôle prudentiel focused in part on the risk of non-compliance of the cross-border activity.

 

The ACP audit team found only one copy of the milk books, that for August 2007, in the 2009 audit report of Martin Peter, auditor of UBS AG, and realised that it was not recorded in the ATA.            -

In her opinion, the audit carried out by Yoan CHAZAL - successor to Nicolas FORISSIER, LIA - on the whistleblowing of his predecessor, was a superficial work leading to erroneous findings. UBS AG was not in a position to provide him with further copies of the milk books claiming that they had disappeared. According to the explanations of the directors of UBS (France) SA, the milk books had been taken away by former employees, in particular by Patrick de FAYET. The CPA noted that all the transactions mentioned in the milk book in question were not recorded as ATA. This finding was confirmed by Franck THEVENAZ, who was delegated to assist him in this work, who wrote: "I confirm that I was unable to reconcile any of the transactions in the pdf file entitled "Appendix 27b of Martin Peter's report" with the transactions in the &ce/ file that you provided to me covering transactions from July to December 2007. I also state that I was unable to do so with you over a wider period from 2005 to 2007. The discrepancy between the amounts of transactions reported in the 'milk books' and those reported in the ATAs was a source of criticism by the CPA. The CPA was astonished by the destruction of documents necessary for the proper traceability of the acknowledgements of business and therefore of the bonuses distributed, which should have been kept for a period of five years. These documents should have been kept for a period of five years, as they were important elements for the audit of business referrals.

 

When the Risk & Compliance department heard Patrick de FAYET following the 2008 audit, he explained that the 'milk books' were simply handwritten notebooks that helped him to ensure the administrative follow-up of business compensations between the ACs. They were in no way parallel accounts. Other UBS AG employees argued that the 'milk books' were merely a draft of the ATAs. This presentation clashed with the fact that some of the flows mentioned in the milk books did not appear in the official accounting base, i.e. the ATA.

UBS SA argued in a letter from its counsel dated 8 January 2016 that the ATAs or the entry of transactions in the "milk books" did not correspond to any irregular transactions. It recalled that these books were only drafts of potential ATAs to be recorded if they were confirmed after study by the "Head of Front". This explained, according to the bank, that some transactions appearing in the "milk books" had been included in the PMM Adjustment Tool, while others had not been validated.

 

The "milk books" appeared to have been set up around 2002, under the direction of Dieter KIEFER, within the Financial Intermediaries Department (FIAI). This department had access to a client database called IRMA, which UBS AG had also been able to access, in violation of French banking regulations. Swiss or Luxembourg CAs had come to explain the mechanism to the French CAs. Extracts from the minutes of the meetings were quoted in the letter of 6 August 2010 accompanying the anonymous letter.

 

According to the statements of former UBS SA employees, the 'milk books' took the form of writings in a 'Clairefontaine-type' squared notebook. They were transmitted by the heads of the desks - the regional directors in the provinces and the segment directors in Paris - to the Paris management, in the form of an Excel file that Patrick de FAYET (director of asset management and all the CAs in France - Front Office) centralised and transmitted to the parent company in Switzerland. This Excel file was in the hand of the latter's assistant, Béatrice Pantegnies, who had herself named the Excel file in question "Vache". On 24 November 2006, she sent an email to the branch managers (Jean-Marie BENOIST, Omar BERKOUK, Hervé D'HALLUIN, Serge HUSS) asking them to prepare the milk books, to which an Excel file entitled 'Vache' was attached to list the clients and the amounts On or Off.

 

The investigation department proceeded to reconcile and compare the milk book found in the computer archives of UBS SA at the following location: file "pantegbe_2005123l", file "milk book Nov. 05" (working copy of seal UBS H2) and the history of the ATAs between 2005 and 2010 ("ACP DVD UBS l/ATA/ExtractionATAIATA ACP Histo.xls").

He also performed a similar analysis of the 1st quarter 2006 milk book, the 2nd quarter 2006 milk book and the 2007 milk book.

 

He noted that certain business acknowledgements did not appear in the ATAs in the name of a corresponding Swiss CA, but in the name of a UBS SA line manager, or a provincial branch manager, or Patrick de FAYET. The other transactions mentioned in this milk book were not found in the ATA history from 2005 to 2010, neither in the names of the CAs mentioned, nor with the amount of the transaction. On the other hand, several transactions mentioned in the ATAs were not included in the milk book for the CAs mentioned. The milk books and the ATAs did not exactly overlap.

 

The link between the ATA application and the 'carnets du lait' was a source of requests for explanations and sometimes aroused the reluctance of commercial agents and their branch managers. An e-mail sent by Serge HUSS on 15 October 2007 to his fellow agency managers, and in particular to Hervé d'HALLUIN, his counterpart at the Lille agency, provides a good illustration: "As regards international ATAs, historically known as the 'carnet du lait', the position of P. de Fayel, worthy of Richard Virenc, namely: 'if indelicate CAs have historically put simple money in the 'carnet du lait', it is without my knowledge', seems to me to be completely unacceptable. It is probably because he takes us for oxen that, in the framework of the milk book, he asked us to fill in excel tables called "cows". This shows one thing, however, if one of us had been historically put in trouble by applying deliberately ambiguous oral procedures, he would have found himself alone with his responsibilities without any hierarchical support. On the positive side, however, we will now be able to be extremely strict in international ATAs, but faced with such negationist positions, which transform historical realities, I feel obliged to officially refer the matter to the bank's deontologist, François Vernet, so that he can officially give us the bank's position on the milk book.

 

Patrick de FAYET's assistant, Béatrice PANTAGNIES, described the sections of the file:

- the segment heading corresponding to the customer category (e.g. High Net Worth)

- the heading relating to the date of the transaction

- the field relating to the name of the client,

- the field mentioning the origin was a column already filled with the word "tiers",

- the "from" field was used to enter the name of the French CA,

- the heading "to" corresponded to the name of the Swiss CA,

- the amount was indicated in millions of euros,

- the heading 'location/comments' corresponded to the name of the agency and the remarks of the regional managers.

 

According to her, the 'milk books' probably recorded both legal and illegal transactions.

She formally identified the computer document, in Excel format, sent as an attachment to an email dated November 2011 as one she had created in 2005 at the request of her superior Patrick de Fayet.

 

Several emails between bank employees made specific reference to the milk books. Previously, the milk books only existed in paper format, kept in a school notebook by Sandrine MARSOIN, assistant to the director of private management.

 

Unlike the ATAs, whose gross amounts were aggregated, netted and not documented, the milk books were individualised by client, nominative and not netted.

Testimonies were taken from the staff of UBSSA's central services.

 

According to Jean-Louis de Montesquiou, Chairman of the Management Board of UBS SA, the "milk books" and "shadow accounting" were used to include in the accounting of new assets for the year those that were not included in the French assets.

 

Eric DUPUY, legal director of UBS SA, declared that he had discovered the use of milk books by chance in 2000. A Swiss manager who worked at the Paris headquarters of UBS SA had explained to him that his mission was to facilitate the opening of undeclared accounts in Switzerland by French clients.

 

Nicolas FORISSJER, head of the internal audit department of UBS SA until 2008, presented the milk books as a means of 'keeping track of undeclared cross-border movements, but manually, without integration into the bank's Q/ficial system. It was introduced in 2002'. All the regional branch managers, and the three heads of commercial division in Paris and their assistants were aware of their existence. In August or September 2007, he himself had received an email sent by mistake by Béatrice PANTEGNIS asking him to prepare the "milk books".

 

Once the figure had been validated, together with its foreign counterparts, the commercial management reintegrated the global flow into the official analytical accounting of the UBS SA bank in a single movement. The 'milk book' was used to record the name of the AC who had carried out the fundraising operation in NNM so that he could then be paid his bonus at the end of the year. After the bonuses were calculated at an adjustment meeting between the French and Swiss, the milk books were destroyed.

 

In 2006, he had been informed by Serge HUSS of acts committed within UBS. Following his audit report, Patrick de FAYET decided to redefine the methods of use of the ATAs and the "carnets du lait". It was on this occasion that Omar BERKOUK revealed to him that the "milk books" were used to record illegal tax evasion operations or sums not transiting through France but concerning French taxpaying clients and UBS SA directors.

 

Nicolas FORISSIER confirmed that Patrick de FAYET had brought together, on 19 September 2007, the whole of his staff to redefine the operating rules of the ATA, the official system for recording flows for trade between traders and between several countries, as well as the milk book. Following the internal audit carried out in June 2007, Patrick de FAYET wanted the "milk books" to include not only legal cross-border operations but also illegal ones. Thus, he demanded that the collection by UBS AG of the sale price of the Monceau Hotel (for €40 million), an operation carried out by Omar BERKOUK, even though the client was a non-resident, be included in the milk books. Omar BERKOUK, unhappy at being deprived of 50% of his bonus and in deep disagreement with Patrick de FAYET's decision, had left UBS following the altercation that had taken place on 19 September 2007 with the latter. Etienne de TIMARY had not been present at the heated altercation between Patrick de Fayet and Omar BERKOUK on the premises of Swiss Life on 19 September 2007, concerning the ATA on the Monceau Hotel transaction. Hervé d'HALLUIN confirmed that he had been present at the meeting during which Patrick de FAYET and Omar BERKOUK had had a heated argument about the milk books. The incident had taken place during a cocktail party after the meeting. The recognition of cross-border business was no longer done at 100% but at 50%, which had given rise to a strong feeling of injustice on the part of the latter. He now wanted all legal and illegal transactions to be recorded in the milk book. The ACs were to share their commissions on legal transactions with Switzerland in future. This decision had caused bitterness among some of them, in particular Omar BERKOUK. He denounced the total confusion between the French and Swiss banks, the parent company and its subsidiary, in line with the opening of the IRMA client base to the Swiss firm.

 

The testimonies of the business managers and branch managers of the French company were of a different tone according to the investigation file.

 

Olivier FORGUES, a French CA belonging to the team of 'hunters' in the Core A,ffl,uent France client segment (individuals with assets of €250 K to €5 ME) in Paris and investment advice, spoke of parallel accounting to the accounting of capital inflows in the bank's books. Indeed, this document made it possible to identify the French CA who had recommended a French client to a Swiss CA and vice versa. He stated that he had been in contact throughout 2006 and 2007, on the orders of his line manager, Anne LONGIN-GUYOT, with UBS's Swiss sales staff dedicated to cross-border activities, which opened undeclared accounts, constituting the major part of UBS AG's international core business. Finally, Olivier FORGUES explained that Pierre POYET, a Swiss national, who had replaced Jean-Louis de MONTESQUIOU at the head of UBS (France) SA, had used the French subsidiary to develop "illegal practices" and had "industrialised this illegal tax evasion activity". This assertion was partly supported by the statements of Omar BERKOUK who had also left the bank.

            '

According to Thomas LE FORESTIER, CA from 2006 to 2009, the milk books were used 'to materialise an illicit canvassing of cross-border business managers. For me, the 'carnet du lait' only contained illicit transactions because they were the result of cross-border canvassing', and could therefore be used for tax evasion operations. For her sector, the 'milk books' were kept by Sandrine MARSOUIN, Anne LONG IN's assistant. For the upper segment (clients with assets of five to thirty million euros), they were kept by Patrick de FAYET's assistant, Béatrice PANTEGNIES. 30% of his clients had been recommended to him by Swiss CAs.

 

Jean-Michel BENOIST, director of the UBS branch in Bordeaux _until 2008, declared that the "milk books" for him only summarised undeclared money transfers from France to Switzerland. He claimed that all his clients had declared accounts and that he did not know how to transfer undeclared money from France to Switzerland. There was no milk book in Bordeaux. On the other hand, he confirmed that the events organised by UBS Switzerland were used by the CAs to canvass French clients. The Swiss CA Juan MORENO came to France to meet prospects. He met him at events financed by UBS AG.

 

He said: "As far as undeclared accounts in Switzerland are concerned, I know that they exist but I don't want to know about them, and in Bordeaux I said that I didn't want them. (...) I know how it works, for example Juan Moreno who is a Swiss CA who came to France to meet prospects, but I gave strict instructions that he should not meet our clients. I gave clear instructions to my staff that Mr Moreno should not meet our clients at the bank. He would come to the meeting to say hello, because he was a colleague, that's all. (...) We used to meet at events paid for by UBS Switzerland. All the staff and I knew clearly why we were there. The Swiss CAs met with prospects and clients of UBS AG.

 

The head of the UBS branch in Marseille from the end of 2001 to September 2006, Alain BERTHAUT, explained that he had six salesmen under his command. He described the ATAs (Asset Transfer) as "a fictitious operation allowing the reality of each person's production" (i.e. "the inflow of capital but also the receipt of capital"). He argued that each ATA was traceable, computerised and lawful. Until 2006 or 2007, the ATA was called the 'milk book'. It was given to Patrick de FAYET once a month. After each meeting, the latter met with his Swiss homologist Philippe WICK, who dealt with French clients wanting to move to Switzerland. He stated that he had no knowledge of any hidden accounting.

 

Given the informal nature of the "milk books" (handwritten notes), they could have been used to acknowledge tax evasion operations, "illicit cross-border operations".

 

On 14 January 2002, Serge HUSS took up the post of Director of the UBS SA office in Strasbourg. On 1 March 2006, he was promoted to the rank of Executive Director. The Strasbourg office covered an area of nine departments in eastern France. UBS had undertaken to give Serge HUSS and his staff an exclusive area of operation.

 

The labour tribunal found that his employment contract had been terminated, recognising that UBS AG's CAs were canvassing in his area of competence. UBS AG was ordered to pay him a total compensation of €500,000.

 

For Serge HUSS, the practice of "milk books" "was based on the compensation of _fl,ux also called nettin!( It is the commercial recommendation. (...) By recommendation, we mean exchanges of information between the French and Swiss customer services and if the transaction was carried out, it was then credited to your own commercial counter. The Swiss CAs who practised offshore were also encouraged to make referrals to onshore, which made it possible to offset the flows. At first, it was a purely oral method. It was Béatrice Pante1(11ies, Patrick de Fayet's assistant, who centralised these operations. After that, there was a texting period when all the exchanges were done by text message. These exchanges of text messages took place every quarter. Then there was an e-mail period when the 'VACHE' table was sent, which was an Excel file with two-way accounting, 'France/other' and 'other/France'. (...) We French CAs could not do offshore. That's why the Swiss CAs offered this type of product, what the Swiss call 'simple money', money without problems. This should not be confused with 'complex money', with money where there were quite legal tax problems.

 

For the CAs, the 'milk books' allowed them to receive additional bonuses even if this was done on assets whose provenance could be questionable. For the bank, it allowed them to develop a offshore business more quickly. The origin of the funds was not always legal. If this was not the case, it would have been sufficient to use the ATA computer tool, which existed officially.

Between 2004 and 2006, only 'sulphurous and nauseating things' were in transit. In 2006, he denounced the facts to the compliance officer François VERNET and discussed the situation with the bank's internal auditor, Nicolas FORISSIER.

 

In a hearing held in police custody, Serge HUSS confirmed that the "milk books" constituted a hidden accounting system for the recognition of business between the French and Swiss CAs for cross-border fund transfer operations. According to him, it was essentially a question of regrouping in Switzerland offshore funds already placed abroad (rather than transferring assets from France to Switzerland). It was an institutionalised organisation in which it was impossible not to participate. However, he had set his own limits by ensuring that his team's CAs were not involved in transferring funds from France to Switzerland. The opening of a simple money account in the books of UBS AG was carried out by the Swiss Board of Directors, but the operation also benefited the French Board of Directors in the form of an acknowledgement of business entered in the 'carnets du lait'. When the transaction was fully legal, it was recorded in the ATAs.

Among those responsible for setting up the 'carnets du lait', he mentioned Raoul WEIL, global head of wealth management at UBS AG, Dieter KIEFFER, head of Europe at UBS AG and Pierre POYET, chairman of the board of UBS SA.

 

Among the prospects, whose operation had been recorded in the milk books, he mentioned a butcher from Wissembourg by the name of René ACKER, who had €500,000 invested at Crédit Suisse. The transfer to UBS and the accounts of this prospect had been managed by Laurent LORENTZ.

 

The log of commercial collection operations revealed that on 18 October 2005, Laurent LORENTZ, head of the Strasbourg branch and successor to Serge HUSS, had transferred the undeclared account of the ACKER consorts, a butcher in Wissembourg, from Crédit Suisse, opened in 1979, to UBS AG. In this respect, he had benefited from a business recognition of 500 000 € with his Swiss colleague, Yvette REBETTEZ, CA working in Basel. An anonymous letter sent by the ACP to the Public Prosecutor's Office on 16 April 2012 also referred to Ms ACKER's account. The author of the letter recommended a line-by-line reconciliation of accounts between provincial UBS entities, the parent company and client accounts as the only means and absolute proof to highlight cross-border tax evasion movements that no commercial could ever justify. According to the writer of the letter, a simple calculation would show that UBS AG was involved in tax evasion to Switzerland to the tune of 5 to 7 per cent of its net assets.

 

The search conducted at the home of the ACKER couple led to the seizure of documents and correspondence from the UBS bank and Laurent LORENTZ.

 

On being reheard, Serge RUSS explained: "I handled files for Laurent Lorentz that were in the milk book: that of the Wissembourg butcher, Acker, and Mrs Christ, a client of Frédéric Lépine. These two cases involved the transfer of undeclared funds from Crédit Suisse in Switzerland to a UBS account in Switzerland that they wanted to open. I was willing to play along so that my collaborators would receive commissions for their recommendations, but I did not want to write anything down. I never kept a written milk book. I would give feedback by telephone to Mrs Pantegnies, Patrick de Fayet's assistant. I didn't like it, but I did it because of the pressure from my business managers and the reward we could all get from it at bonus time.

 

I can give you a concrete example for Mr. Acker. This client already had an account at Credit Suisse with undeclared money. His CA in France was Laurent Lorentz. Mr. Acker told Lorentz that he was not satisfied with the service provided by Credit Suisse. Mr Lorentz contacted a Swiss CA who in turn contacted Mr Acker to open a bank account with UBS in Switzerland. The money was transferred from Credit Suisse to UBS AG. For this recommendation of Lorentz's client to Switzerland, Lorentz was given a NNM which I then reported to Mrs Pantegnies, assistant to Mr de Fayet. The Swiss CA, which had taken over this Acker client, reported the operation to its Desk in Switzerland. Subsequently, the business recognition was the subject of a compensation negotiated between Philippe Wick, head of the Swiss CAs and Patrick de Fayet, head of the French CAs.

 

For Ms Christ it was the same pattern. For me, the money was already abroad and therefore not declared. It was offshore. Declaring the money offshore was complex because of the tax declarations which are complex and for which the Swiss bank UBS was not equipped. UBS was not able to do the tax processing and issue the /FU (ie: single tax form).

 

He added that the office that carried out the largest operations was the one in Lyon headed by Etienne de Timary. The latter's client was a certain MANOUKIAN, the "king of shoes", based in Roman. Several tens of millions of euros had been acknowledged to Etienne de TlMARY.

 

Laurent LORENTZ replied in a laconic and evasive manner to the questions of the investigators. He stated that the 'milk books' were the former name of the ATAs and that he had never had the opportunity to pass them on to Patrick de FAYET. He refused to mention the operation relating to his client René ACKER. He had been hired as CA by Serge RUSS in 2002. He had kept this position until 1 April 2009, when he was appointed "Desk Manager" or "Branch Manager". Before that, he had been Serge Huss' assistant in 2005 or 2006. Serge Huss joined UBS in July or August 2008. From 2002 to 2006, he had collected EUR 200 million under management.

 

During his first appearance, going back on his previous versions, he admitted that he had, as Nicolas FORISSIER and Serge RUSS had declared, actively advised his client, René ACKER, a butcher in Wissembourg, and then proceeded to transfer the latter's undeclared account from Crédit Suisse to UBS AG. He acknowledged that thanks to this operation he had benefited from a flow recognition in November 2005, concerning a sum of 500 K€ from Yvette REBETTEZ, CA in Basel. He considered that there was nothing illegal about this since the money had already been in Switzerland for a long time. He had not encouraged his clients to evade taxes. He had known the ACKER couple since 1979. He confirmed that their money was "simple money", i.e. undeclared assets, but said he had advised them to regularise the situation.

 

He acknowledged that he had, as Nicolas FORISSIER had denounced, received an acknowledgement of flows of 1.6 MCHF, at the end of 2004 or beginning of 2005, on the transfer to UBS AG of the account of Bernard DAL, Managing Director of GEBO, a company belonging to Pierre SCHOEN. He was unable to say whether the account was declared or not. He concluded by saying: "I saw Swiss CAs in France etc. It is certain that they were not necessarily there to do sewing and they could be al(l "essffs in terms of business but none of my clients ever came to see me and told me that they had been canvassed but afterwards, would they come back to say so. He would not have attended any contract signatures at the events.

 

Omar BERKOUK had worked at UBS SA from 2001 to 2008. From 2004, he became regional director in Cannes, and as such headed the Marseille office. He was dismissed following his conflict with Patrick de FAYET.  He specified: "the practice of milk books consists of recording operations, support that has been provided to develop cross-border flows". He had heard about it from 2005. The French CA had targets of thirty million euros imposed on it. Helping the Swiss ACs by passing on useful information enabled him to keep his job by meeting his targets and also to receive a bonus.

 

He distinguished between two types of operations: relocations, which were transfers of operations, in principle legal, to another country, and referrals, which could lead to illicit transfers. The role of UBS AG's Board of Directors was to identify people likely to need 'offshore' services, i.e. Boards of Directors that were not allowed to do business in France, such as the Boards of Directors of UBS AG. These operations 'did not have to be declared to the tax authorities'. Zurich's senior management asked to develop a policy of cooperation based on the exchange of information. UBS Paris did participate in the search for prospects and the provision of information on clients who might transfer their assets.

 

By 'putting the ATAs in the milk books' management had, in his view, attempted to conceal illicit transactions which were a small proportion of the total legal cross-border transactions. "In addition to the legal transactions, there were others that were part of the recommendation, i.e. that could be elected by an illegal transaction that was not organised in detail by UBSF. In France, our mandate was to know all the potential clients for asset management. When, in this process, someone spotted a person likely to need the services of "offshore", i.e. those who are not allowed to canvass in France, such as Swiss account managers, these operations were not to be declared to the tax authorities. The Zurich Directorate General asked us to develop cooperation based on information. That's why you won't find a set-up as such, but Paris did participate in the communication of who could be eligible for this transfer title. And you have to understand that in this system, most of the time, the French chargé d'affaires didn't do any physical operation but only passed on information to the Swiss chargé d'affaires. Everything else was done by Switzerland and for the French chargé d'affaires this was materialised by the recognition of his training in the milk book, thus contributing to the achievement of his annual objectives.

According to him, the president Pierre POYET had "hired the services of a deontologist, François Vernet, whose role consisted in giving a legal appearance to the bank's activity and all but denied the existence of the carnet du lait or claimed not to know about its existence, even though it was obvious that he did know.

 

Etienne de TIMARY had been in charge of the management of the regional branch heads (Desk Heads) as well as the Lyon support. He stated that the objectives set for him by Patrick de FAYET, for the HNW and Core A segments, consisted in obtaining account openings in France and not in Switzerland.

 

He confirmed that internationally, the ATA was used to reward a business contribution in the event of expatriation to Switzerland of a French national who became a Swiss tax resident, which the French CA sent to a Swiss colleague.

 

The milk books were a paper document given to Patrick de FAYET. He was not able to specify why UBS SA was unable to provide an original copy, either to the ACP or to the investigating magistrate. He completed it for the Lyon branch. He was asked to separate out transactions from a third party (where the funds had not transited through UBS) or from UBS (UBS SA or another subsidiary of UBS AG located in another country). This is how he interpreted the e-mail sent to him by Béatrice PANTEGNIES, Patrick de FAYET's assistant. He contested Nicolas FORISSIER's thesis on events. The Swiss CAs did not come to the events to "steal French clients". In Lyon, he did not favour the contacts made by the Swiss ACs. He affirmed that he was not familiar with Anglo-Saxon trust-type arrangements. According to him, Omar BERKOUK was trying to 'bring down' Patrick de FAYET. He had left the bank under very good conditions. Serge Huss also wanted to extract as much money as possible from UBS. He had lied and claimed that the milk books were only about tax fraud laundering.

 

Hervé d'HALLUIN, the manager of the UBS branch in Lille until his appointment in 2008 to the Key Client department in Paris, explained in police custody the distinction between ATAs and carnets du lait by providing a definition for each. The ATAs corresponded to 'documents recognising business transactions between analytical entities of the UBS group. Between business managers or between analytical centres. It can be Franco-French or France-foreign movements."

 

The "carnets du lait" (milk books) are a cross-border recognition system that was manual on Excel. It was a question of recognising business between analytical entities, i.e. between UBS SA and UBS Belf{ium for example. The milk booklet appeared in 2005, to my knowledge, as a replacement for the electronic cross-border ATAs. I learned about them when I became regional manager.

li observed that it was one and the same person, Philippe WICK, who managed or supervised the France International desk from Geneva and UBS SA, a situation likely to pose a conflict of interest problem. The France desk managed the assets of French nationals, whether declared or not; in reality, essentially undeclared assets. According to him, the commercial synergy was not legal if it concerned offshore, i.e. undeclared, assets.

 

On 24 November 2006, he had received an email from Patrick de FAYET's secretary, . Béatrice PANTEGNIES to ask him to prepare the milk books, to which was attached an Excel file entitled VACHE to list the clients and the amounts On or Off. He specified that onshore operations corresponded to sums declared to the tax authorities, while offshore amounts corresponded to undeclared sums.

 

On the milk books, Hervé d'HALLUIN, who was indicted, reconstructed the chronological evolution of the "milk books" during a hearing, distinguishing three periods.

At the end of the 1990s, UBS AG (Weath Management, i.e. 70% of its balance sheet) had decided, within the framework of the Western Europe Initiative, to establish itself locally by applying for banking licences for its subsidiaries. The aim was to anticipate possible tax amnesties in the states concerned and tax convergence. The amnesties had not taken place except in Italy. To make the operation profitable, it was decided to saturate the market from the bottom up and to move downmarket: this was the Core Affluent Initiative. This was an industrial sweep of small estates. As the number of approvals increased, it was decided to use Excel spreadsheets for monitoring. UBS AG exerted intense pressure on the French teams by requiring its ACs to 'become friends with the French ACs'. This explains the untimely visits by the Swiss ACs to the premises of its French subsidiary, particularly to its regional branches. Hervé d'HALLUIN had recruited CAs "stamped CorA" to comply with the Core Afjluent Initiative plan.

 

From 1999 to 2004, under the chairmanship of Jean-Louis de Montesquiou, whom he described as a "lazy prince", three other people had management roles: Eric Dupuy, head of Legal and Compliance, Gary Hermann, head of one of the Key Clients desks, and Vladimir de Kechnala. They had been involved in a money laundering case and dismissed for gross misconduct. Jean-Louis de Montesquiou allowed a direct dialogue to take place between Eric Theron (Commercial Director, Patrick de Fayet's predecessor) and Gary Hermann and Dieter K. Iefer (Head of the Western Europe sector). There were already offshore business recognitions with Switzerland, Belgium and Luxembourg. These were ad hoc and of a high standard. In 2005, UBS Switzerland appointed Pierre POYET, a Swiss national, formerly of UBS Monaco, to replace Jean Louis de MONTESQUIOU, who was accused of a certain lack of cooperation with the parent company. Pierre POYET had been appointed to maximise synergies with Switzerland. He was the "puppet of UBS AG". At the meeting of 4 November 2005, he had decided to stop using ATAs for cross-border operations with Switzerland, whether onshore or offshore. The computer application was no longer working. In 2005, at the first meeting he attended as branch manager, he had naively mentioned the "milk book" in the minutes he had written. Jean-Michel Benoist advised him to delete this reference.

 

In September 2007, Pierre POYET was replaced by Gabriel CASTELLO, former head of the CoA Initiative project for all Western European countries. It was a 'nauseating and industrially practised sweep of small assets'. UBS AG 'put intense pressure' on the French teams to create synergy by requiring its Boards of Directors to make friends with the Boards of Directors of UBS AG. This manifested itself in untimely visits to the regional offices. To carry out the instructions, Hervé d'Halluin had recruited two or three CoA 'stamped' directors.

 

He added that Serge HUSS's statements were only binding on him and served him in his negotiation strategy with the bank.

 

However, the management of UBS SA had had a very ambiguous attitude regarding the commercial pressure from UBS AG.

 

He did not feel concerned by the mechanisms of the milk books which dealt with the mixing of legal and illegal flows.

 

He could not explain why the Lille branch had been closed in 2009. His bonus (variable remuneration) had increased considerably when he became head of the branch in 2005, from €12,000 to €125.1k in 2008. '

 

Unlike the Lyon office, the development model of the Lille office was not based on events. Nevertheless, it invited a few clients to the Alinghi event (a boat sponsored by UBS for the America's Cup), to !'Art Base! (Basel), the Verbier Festival Orchestra, the Roland Garros Tournament, the Evian Master (UBS Golf Trophy). Swiss CAs were always present. Sometimes they made appointments with his clients.

 

He denied having established business relations with Swiss CAs, except in a very anecdotal manner, and never proactively, at the request of clients who asked to have a contact in Switzerland or Luxembourg, and always for funds declared to the French tax authorities. He had, he claimed, always declined the pressing requests of the Swiss CAs.

 

Questioned on 7 September and 2 October 2012, he protested against the allegations of the two people who implicated him, Nicolas FORISSIER and François ALMALEH. The latter was, according to him, driven by jealousy and bitterness. He described the former employees of UBS SA - Serge HUSS, Nicolas FORISSIER, Stéphanie GIBAUD, Olivier FORGUES, Thomas LEFORESTIER - who had testified against their former employer, as a 'coalition of blackmailers'.

 

He described some of his former CA colleagues as 'mercenaries' driven by a certain greed that made them forget professional ethics (i.e. François ALMALEH and Etienne de TIMARY). Some of them had 'dangerous liaisons' with Swiss CAs. They took liberties with the banking legislation and carried out offshore operations with Switzerland without the approval of their hierarchy. This was how François ALMALEH had presented him with a fait accompli in the case of the watchmaker and jeweller Boyarmick, based in Montreuil-sur-Mer, who held an undeclared account with UBS AG worth two million euros. The Swiss CA in charge of the case was Dominique ZINNER.

 

Between 2005 and 2008, the Lille office collected between €250 and €300 million in NNM (including ATA). The rate of business recognition was 30 to 40%, corresponding to ten to twenty business recognitions per year for the benefit of Belgium and Luxembourg. The Lille branch 'did almost no milk book'. Collection for UBS Belgum increased the net banking income of this bank but not that of UBS SA. The Lille office was closed as a result. The investigation was concerned with the offence of money laundering. According to the prosecution, this laundering is that of tax fraud likely to have been committed by Swiss nationals before. via the channel of canvassing by business managers of the French company and the parent company. opened accounts in the books of the parent company. It is included in this section of the judgment that, for procedural reasons, the managers and employees of UBS AG refused to respond to the requests of the investigating magistrates, who were seized of money laundering offences, some of which were committed in France.

 

However, the investigation procedure shows that the parent company, UBS AG, is implicated by the testimony given.

 

Pierre GERBIER CONDAMIN. already cited. stated that 'UBS acted as a tax fraud laundering office and that most often the French client clearly told his manager that the funds were not declared'.

 

The Court must then recall that witness No. 119 reported that he estimated the proportion of assets under management by France International declared to the tax authorities at 1 to 2% in the Core affluent segment. 4 to 5% on the HNW segment and more on the Kev Clients. Approximately 98% of the clients' assets that the witness had under management were not declared.

Serge HUSS made statements along the same lines.

 

Pierre GERBIER CONDAMIN again testified that almost all UBS AG clients did not declare their accounts even though they were French tax residents.

 

According to Stéphanie GIBAUD, who had been part of the first teams of employees of UBS SA from 1999, 80% of the accounts opened in Switzerland were not declared.

 

Jean-Michel Benoist reported that the attitude of the hierarchy towards tax evasion had changed over time. Jean-Louis de MONTESQUIOU had been the best chairman and a man of particular integrity. On the other hand, Pierre POYET had never supported him in his desire to reject illegal practices. Three people had played a leading role in the tax evasion: Raoul WEIL, responsible for the world, Dieter KIEFER responsible for Western Europe and Pierre POYET, Chairman of the Board of UBS SA, who followed their instructions. In his statements, Jean-Michel BENOIST had made a distinction between ATA (legal flows) and 'carnets du lait' (undeclared and therefore illegal flows).

 

Olivier FORGUES explained that he had discovered UBS SA's tax evasion practices in 2005 during an event organised in Lausanne by Alain VIMARD, then head of sales at Lloyds Banque France - the bank acquired by UBS - during which he had met all the teams dedicated to the offshore business. He considered that the undeclared accounts constituted the major part of the business of UBS SA Switzerland's international core business.

 

According to Thomas LE FORESTIER, 90% of the French clients of Swiss banks had undeclared accounts.

 

Omar BERKOUK, said that when a CA identified a person likely to need the services of the 'offshore', i.e. people who were not allowed to market in France, such as the Swiss CAs, this meant that the transactions concerned did not have to be declared to the tax authorities. Zurich management had asked for cooperation based on this information.

 

Laurent LORENTZ explained that the term "offshore" meant "money under management of France International".

 

It should be mentioned that Anne LONGIN-GUYOT, a senior manager of UBS SA, attested to the indifference of the Swiss bank's employees to the tax situation of clients or prospects: "for the Swiss, it doesn't matter what the notions of clients/prospects are for money declared/undeclared to the French tax authorities, they don't care.

 

Hervé d'HALLUIN, who was indicted, stated that the "French Desk" teams were in charge of the funds of French nationals declared or not declared to the tax authorities. Most of these funds were not declared. He admitted in police custody: "it is a secret for no one that most of these assets are undeclared".

 

Patrick de FAYET, also under investigation, stated: "France International

!ers accounts of French people who have UBS accounts in Switzerland, probably declared accounts and undeclared accounts (...) I think that they were not all [declared].

 

Philippe MAGNIN FEYSOT, former business manager of the UBS AG bank in its Geneva branch from 2008 to 2012 declared: "As for the proportion of undeclared accounts compared to declared accounts, I would say that it is largely in favour of undeclared accounts, but without giving you exact proportions.

 

According to Joëlle Pacteau, a significant number of the department's clients had regularised their tax situation with the Woerth unit. When she arrived, the department was therefore managing a certain number of undeclared accounts. Some clients, holders of the so-called 'historical' accounts, had had great difficulty in doing so. However, she disputed the figures given by witness no. 119. Since her arrival at UBS AG, in particular since 2009, there had been no desire to engage in tax fraud. Previously, the bank had not been very careful about the tax situation of its clients. The situation had changed drastically after his arrival in the department.

 

The 'milk books' were allegedly mobilised for capital not declared to the French tax authorities, which gave rise to the recognition of business to an account manager of UBS SA. Agents' testimonies converge in this respect.

 

Omar BERKOUK stated: "the aim was partly to carry out tax evasion. Personally, I have never seen any.

 

These words were corroborated by other former employees of the UBS bank who said:   -

 

- Thomas LE FORESTIER: "These notebooks could only concern illicit operations because they were the result of cross-border canvassing and could, therefore, be used for tax evasion operations.

 

- François ALMALEH: "This practice of milk books was a measure of discretion for illegal activities linked to money transfer operations. The origin of the funds did not matter.

 

Mention should be made of elements discussed before the Court relating to the steps taken by French taxpayers to regularise their tax situation.

 

French tax residents recognised that they held funds, capital and securities in the books of UBS AG that had not been declared to the tax authorities, and initiated the regularisation process proposed by the Ministry of the Budget, which set up a dedicated team within the DGFIP, known in the general public as the "cellule de dégrisement". As of September 2013, a Service de traitement des déclarations rectificatives (STDR) was set up within the Direction nationale de vérification de situations fiscales (DNVSF) in execution of the circular of the Budget Minister Bernard Cazeneuve of 21 June 2013.

 

The regularisation method was based on a voluntary approach by the taxpayer consisting in the filing of rectifying declarations covering the period not covered by the tax statute of limitations. The rectifying declaration file included a statement of the origin of the assets and proof of the amount of the assets held, directly or indirectly through an intermediary legal entity.

 

This method was explained at the hearing by Béatrice BRETHOMME, public finance administrator assigned to the STDR. The procedure began with the filing of a letter of intent by which the taxpayer indicated that he wished to regularise his situation. Following a number of exchanges with the taxpayer, the service prepared a letter of motivation for the penalties and a transaction contract. Tax assessment documents were also prepared for collection. Taxpayers sometimes paid their tax debt spontaneously as soon as the settlement was signed.

 

The amount of the transactional rebates depended on the taxpayer's behaviour (considered by the administration as passive or active). The main country of destination for the funds was Switzerland (80%): about four thousand cases were processed, of which a little more than a thousand concerned UBS AG.

 

The five banks most cited by taxpayers were Pictet, Julius Baer, Credit Suisse and Lombard Odier.

 

UBS AG replied that it was clear from the various documents it had provided to the judges that it encouraged its clients to participate in the regularisation programmes. In the context of the setting up of the first regularisation unit by Budget Minister Eric WOERTH, a power point document dated 23 October 2009 detailed the banking documents (package A, package B, package C, depending on the amount of the assets) that the bank could provide to the "client who requests it", and drew up a list of lawyers, in France or in Switzerland, whose "contacts can be provided". This document, which also detailed the conditions for regularisation in France, does not establish that the bank encouraged its clients to regularise but, at the very least, that it provided useful information to those who indicated their intention to do so.

 

On 6 May 2014, at the request of the examining magistrate, the French tax authorities sent a list of the names of 266 taxpayers who had regularised assets entrusted to the UBS bank. The count as at 31 December 2014 concerned a completely different volume: 1254 and 1201 individual files had been filed within the framework of the WOERTH unit and then the CAZENEUVE or STDR unit respectively, and forty-seven registered during the interim period. At the end of the judicial investigation, the number of files registered by the STDR amounted to 2952 files, i.e. 2637 files after reprocessing the data by deducting closed accounts, accounts of deceased persons, and fifteen special cases (situations of multiple Swiss bank accounts with zero balance).

 

According to the latest figures communicated by the DGFIP to the Court through the French State's counsel, which take into account the work carried out by the STDR between 30 September 2015 and 12 February 2021, the updated number of regularisation files amounts to some 16 789, of which 1,254 are from the Woerth Unit, and 15,443 recorded up to 31 December 2017, the deadline for filing rectifying tax returns, and processed by the STDR, broken down into single-bank files for 10,985 and multi-bank files for 4,458.

 

Thus, more than 4,400 French taxpayers had at least one account opened in the books of UBS AG whose deposits had not been declared to the French tax authorities.

A distinction must be made between funds under management by the "France International" department.

 

In the absence of information provided by the Swiss bank, the investigating judges carried out an assessment of the assets under management of the France International department. They reconstructed the data from the corrected tax returns filed by UBS AG's clients and provided by the French tax authorities at their request.

 

The court noted that this point in the file was formally refuted by all the defendants.

 

The fact remains that the file contains a "soit-transmis" from the investigating magistrates to the attention of UBS AG's counsel, according to which:

UBS AG did not answer the questions asked, in particular the one relating to the amount of assets under management of the France International department - hereinafter the "Amount"-, and the assets under management of the "Accounts concerned" of France International - hereinafter the "Amount concerned".

Please provide us with your comments on the following assessments of the Amount":

 

1.         Multiplication of the CAs by their average portfolio

The "Amount" could be evaluated as the average amount of assets under management per Swiss CA (X}, multiplied by the number of Swiss CAs assigned to France International (Y):

-in France. X is equal to 130M€ in 2010 (Dl790/3); we can assume that X is the same at France International

-According to Nicolas Forrissier. Y was between 100 and 150, let's assume it is equal to J00 in 2008.

Thus the "Amount" in 2008 would be 13 billion euros for 100 sales and 19.5 billion for 150 CA.

 

2.         The rule of three with US off-shore assets

 

UBS AG told the US Senate Select Committee on 14 July 2008 that the amount of assets under management by US residents was CHF 18.2 billion or USD 17.9 billion (D1849/21).

Furthermore, in his book "La richesse cachée des Nations" published by Editions du Seuil, the economist Gabriel ZUCMAN, professor at the London School of Economics and researcher at the University of Berkeley, estimated, on the basis of statistics published by the Swiss National Bank, that in 2013 - all banks included - American offshore assets in Switzerland amounted to 90 billion euros, and French offshore assets in Switzerland amounted to 180 billion euros (page 39).          -

 

Assuming that UBS has no particular specialisation compared to other banks in Switzerland at this time, and that this proportion was the same in 2008, the amount of assets under management by France International was therefore equal to CHF 1.8.2 billion * 180 / 90 = 36 billion Swiss francs, or, at the end of December 2008, 36 / 1.54 = 23,000,000,000 euros

Thus the '0Montant' in 2008 would be 23 billion euros.

 

In a letter of the same day, counsel for UBS AG argued that: "The amount of actffs under management within France International is not public and we cannot therefore transmit it to you for the reasons already explained.

 

During his interrogation on 19 June 2014, Mr Williams had told you:

"I will give you what we have published".

 

We have not been able to find any evidence that the average amount of assets under management per account manager and per segment was public. Therefore, we are not in a position to answer this question at this time. However, we will continue our research in case we find evidence of the publication of these figures.

 

The number of desk officers at France International is 76. There are 12 desk heads.

 

Invited by the investigating magistrates to comment on their assessment of the assets under management of the France International department, Bradley BIRKENFELD, UBS AG's US chargé d'affaires between October 2001 and October 2005, who was sentenced on 31 August 2009 by a federal judge for conspiracy to defraud the United States, reported that each CA had between one hundred and two hundred banking relationships in its portfolio (a banking relationship could correspond to several IBAN accounts) and that the bank did not open any accounts in Switzerland, unless it had a potential of CHF 1 million. In addition, UBS AG had also stated before the US Senate that it managed "approximately 20,000 accounts opened in Switzerland for US clients, of which approximately 1,000 were declared accounts and approximately 19,000 were undeclared", i.e. 95% undeclared accounts.

 

When questioned, he indicated that he had given these figures to the US authorities himself. This data came from internal documents. The bank could only confirm the information. He referred to the regularisation programmes set up in the United States in 2009 and 2011 (voluntary disclosure program) which, by 31 December 2012, had resulted in 39,000 voluntary declarations and the payment of USD 5.5 billion in evaded duties and penalties. More than 50% of the taxpayers involved held one or more accounts with UBS AG. The number of account holders included the economic beneficiaries of the accounts in case of interposition of a legal person or trust.

 

He gave his opinion on the method of evaluation of the assets under management used by Gabriel ZUCMAN in his book The Hidden Wealth of Nations, at the end of which, on the basis of statistics published by the Swiss National Bank, the economist had evaluated that in 2013, all Swiss banks combined, the American offshore assets entrusted to the Swiss banking system amounted to the sum of €90 billion, and the French offshore assets in Switzerland amounted to €180 billion, i.e. double.

 

The amount of assets under management by the France International department of UBS AG was therefore equal to CHF 18.2 billion (which is the amount of UBS's US offshore assets under management, as acknowledged by UBS before the US Senate Select Committee on 14 July 2008) multiplied by 180/90 = CHF 36 billion, i.e., at the end of December 2008: 36/1.54 23,000,000,000 euros.

 

According to the documents of the American proceedings which led to the conviction of Bradley BIRKENFELD and the deferred prosecution agreement (DP A) concluded on 18 February 2009 by UBS AG with the United States Department of Justice and endorsed by a judge of the Federal Court for the Southern District of Florida, UBS AG had acknowledged conspiracy to defraud and unlicensed solicitation for facilitating the creation of accounts in the names of offshore companies to enable US tax residents to hide their assets in those accounts; accepting W8BEN forms provided by the managers of the offshore companies indicating that they (and not the US clients) were the beneficial owners of the assets in the accounts opened at UBS AG; and having illicit contacts with the US clients. The bank agreed to settle for US$780 million and to provide the US Government with the identities and banking information of US clients.

 

UBS AG had stated on 14 July 2008 before the US Senate Select Committee that it had approximately 20,000 bank accounts in Switzerland for US residents ("US clients").

 

According to the information provided by the French tax authorities on the amounts of assets entrusted by French taxpayers and having given rise to corrective declarations, based on the latest figures updated to 12 February 2021, the assets regularised with the French tax authorities amount to a total of €9,592,949,261.

 

The judicial information also attempted to define which banking services were provided by UBS AG.

 

It was reported by witnesses and mentioned in an e-mail attached to the proceedings that the terms "simple money" and "complex money" were used within the bank, which seemed to refer to different banking realities. These documents showed that a distinction was made between 'simple money' (i.e. money in Switzerland not declared to the French tax authorities) and 'complex money' (i.e. declared money). On this point, reference should be made to the statements of Serge RUSS, Jean-Michel BENOIST, Patrick de FAYET, Anne LONGIN-GUYOT, Sylvie JETZER.

On this point, anonymous witness no. 119 confirmed the internal use of the terminology of "simple money" for undeclared money and "complex money" for declared money. Declaring money to the tax authorities implied not only the issue of declaration, but also that of a more complex investment strategy with regard to tax optimisation.

 

These claims were refuted by UBS AG.

Andrew WILLIAMS, a representative of UBS AG, stated during the questioning of the legal entity on 16 May 2014 that such a lexicon was not promoted by the bank. He said: "Simple money is money that you don't know if it has been declared or not, whereas complex money you know it has been declared."

 

An exchange of e-mails on 10 November 2008 between Olivier FORGUES and Philippe CHARRIERE, CA of the France International Department of UBS AG, suggests that "simple money" and "complex money" had their own bank accounts attached. The former asked the latter: "Can you remind me of the difference between simple and complex accounts (I still sometimes mix the two...)? To which the second replied soberly: "complex = declared. Simple = not declared to the tax authorities. Super easy to understand. These documents are attached as Annex V to the report of the Prudential Supervisory Authority in the proceedings.

 

The fees charged by UBS AG for banking services made available to its clients were high. According to Bradley BIRKENFELD, the purpose of UBS Private Banking was to collect fresh money from all over the world and then transfer it to Switzerland, on the grounds that its banking fees charged there were the highest, far higher than those of its local subsidiaries such as UBS AG. These were banking services fees, but also securities services fees. This is because clients were obviously willing to pay more fees to their bank if it allowed them to avoid paying tax.

In his interview of 16 May 2014, the representative of UBS AG reported that the anonymous numbered account (so-called 'digital relationship', as opposed to the 'registered account') was charged to the client. A letter dated 11 July 2014 signed by the lawyer of the Swiss bank UBS AG provided further details. Anonymity entailed a 20% surcharge on custody fees, and a minimum of CHF 300 per quarter between 2001 and 2008, then from January 2009 to September 2020 CHF 250 and CHF 375 between 1 October 2010 and 30 September 2013.

 

The service of numbered or "conventional name" accounts, i.e. with a pseudonym, was examined by the investigating judges.

 

The representative of UBS AG stated under questioning that the anonymous numbered account was a service offered to clients and that these accounts were subject to a higher level of security. If the client chose this service, his name and account number were only accessible to his CA and certain central departments of UBS. In addition, the statements for the account in question were issued without the client's name. This service was separate from the 'remaining bank' service. It was possible to use this service and still request that statements be sent to the home address.

 

Witness 119 was explicit about dealing with customers with anonymous accounts: some contacted the bank by telephone, many from phone boxes. They identified themselves either by name, account number, code or even just by the sound of their voice. As far as the code was concerned, UBS had long had a procedure known as

"The procedure was still in use when UBS left the company in 2002. It was still in operation when he left in 2010. When it was followed, a nickname (e.g. 'friend of the Ritz

") was used, which allowed the client to sign all correspondence with UBS under this conventional name and give it contractual force. However, no proper names or words that were too vague should be chosen, to avoid confusion with other clients. For this reason, this procedure was not used very often.

 

But, according to the witness, on the telephone, it was common to use a conventional name with clients, but only to allow the client to be identified and without this code being declared as part of this procedure. The CAs were able to identify customers who used only an account number in the following way: two sets of A6 cardboard cards were placed in wooden boxes, one by name and the other by number. The latter series allowed them to identify a customer by number. From 2003 onwards, these cards, as well as their storage boxes, were provided by the bank. After the account was opened, the CAs received the cards by internal mail. The witness confirmed that CARDEX was the brand name of the card boxes.

 

According to the witness, "UBS forbade the CAs to keep a computerised client file, because the bank was afraid that the content of the files would be disclosed in one way or another. It felt that it was easier to get a USB stick out than cardboard sheets.

 

But in reality, the witness said, "the ACs were almost all holding a.file. Only the.cardboard.card.made.it.possible.to.link.an.account.number.to.a.holder's.name,.as.well.as.the.account.opening.documents,.which.were.stored.in.Geneva.for.clients.from.Geneva.and.Lausanne,.and.in.Basel.or.Zurich.for.clients.from.Basel.and.Zurich. The employees of the archiving services did not have access to the account statements.

 

The telephone identification procedure as described by the anonymous witness was confirmed in the hearing by Philippe MAGNIN-FEYSOT. Indeed, the latter stated: "from 2000 to 2007, I was an institutional client advisor who provided financial services and advice to legal entities such as pension funds, group treasury insurance companies in Switzerland.  From May 2007 to February 2008, I was offered to join CORA in the private banking division of UBS in Switzerland. My role was to try to find a service and added value for entrepreneurial clients in France. From March 2008 until June 2012, I joined the Desk-Executive entrepreneurs Switzerland of UBS Switzerland in Geneva as a CA for clients domiciled in Switzerland. (...) I heard that there could be anonymisation of statements. I think that the bank did not classify the anonymised statements. To my knowledge, I don't think the bank was doing a computerised classification. The advisor could have a card library in which there were cards (like card indexes) on the clients (name, first name, address, account number, marital status). It was a kind of concentrate on the

It was a kind of concentrate on the bank's relationship that was quickly accessible by the advisor. This file provided a quick overview of the customer's portfolio. But it was not used by all the advisers.

 

Olivier FORGUES testified that, during a trip to Basel, he had seen the installation of 'card boxes' containing cards with the details of clients, their names, their pseudonyms and their encrypted accounts.

 

Pierre GERBIER CONDAMIN confirmed that there were card indexes bearing the code name of each client stored in wooden boxes. This manual file, called CARDEX, was itself stored in a safe. There were no client names in the computer system. The open-plan layout of the workstations allowed him to hear telephone conversations: customers called from telephone booths using a code name. The ACs travelled to France to meet their clients, taking every precaution to avoid being noticed.

 

However, it was difficult to name French taxpayers because of Swiss banking secrecy.

 

Most clients did not open accounts in their own names but through complex structures. The Wealth Planning department was responsible for advising and setting up offshore structures.

The representative of UBS AG admitted during the examination on 23 July 2014 that the manual CARDEX file had not been deleted in 2012. When asked about Witness 119's statements on the CARDEX files, he stated (the court quotes from the interrogation):

 

"If the question is: was there a higher level of security for numbered accounts and to match the numbers to the names of the customers, the answer is yes.

 

By numbered account I mean an account where the identity of the holder is not stored in the bank's system in the same place as the account number but in a separate place so that only a limited number of people have access to both pieces of information. This system exists and has the sole purpose of increasing the confidentiality of the account.

 

For example, it is used for bank employees so that not everyone is able to know how much the CEO of UBS for example has in his account.

It is possible that these boxes were used in this case.

 

THE JUDGE: Is the numbered account a service sold to the client?

 

ANSWER: Yes and for a long time. I don't know at what price, because I benefit from it for free as an employee of the bank, but I will tell you.

 

THE JUDGE: Mr GERBIER-CONDAMIN says that numbered accounts used to exist but no longer do. Do you know what he is talking about?

 

ANSWER: Except for something else that I have just explained to you, it is incorrect that the numbered accounts no longer exist. But as I have just explained to you, you must not fandom on that, it is only a higher degree of confidentiality. We must not imagine that the account numbers are a magic formula that would allow anyone who gave it to have access to the account.

Online access via e-banking services would have remained impossible for numbered accounts until 2007 or 2008 according to anonymous witness No. 119. For the sake of consistency and security, this service was subsequently discouraged for customers. If connections to a UBS website could be found on their personal computer, there was no need for the client to choose the anonymous account option. Very few clients asked for it, because they were extremely cautious, 'to the point of paranoia', the witness added.

 

The investigation file showed that UBS AG was likely to offer a system known as the "resting bank".

 

The customer could request that his account statements and letters relating to its operation never be sent to his home address. Most clients made an appointment to view their account at the branch in Switzerland. Their CA printed out the statements, placed them in an envelope and sealed them. At the time of the appointment, he gave them the envelope; the client was free to open it and consult it on the spot or to take it with him (which was never the case). The CA had the client sign a discharge stating that he had had his statements and letters relating to the account at his disposal. It was the client's responsibility to visit the Swiss branch where his account was domiciled at least once a year.

 

This was a paid service, the cost of which was included in the custody fee.

 

The bank's representative, during his hearings, was unable to specify the number of people who had opted for the 'retained mail' service and stated that it could not be deduced from this choice that the French client did not declare his assets to the French tax authorities. The proportion of customers from France [International] who opted to have mail sent to their home was approximately 50%.

 

According to anonymous witness No 119, some clients asked the CAs to send them an account statement by e-mail anyway. The CAs would do this from their private e-mail box or from a specially created box, and would send statements without the UBS logo and account number. At first, they printed the bank statement, cut out the logo and account number location, and then scanned it to send it. By 2004 or 2005, it had become possible, internally, to issue statements without the logo and account number. So there was a shift from 'do-it-yourself' to a much more organised practice.

 

The internal instructions assumed that the client was in good standing when the bank letter was sent to his home address (however, when the letter was sent to the bank, UBS was not satisfied with the client's certificate, but asked for written confirmation from an external tax consultant, for example).

 

It was also noted that bank accounts could be opened in the books of UBS AG in the name of interposed structures. The bank offered its services to its clients for the establishment of such legal instruments.

 

Witness no. 119 refers to this specific point. The incorporation of offshore companies was the least expensive solution for the client: companies in the State of Delaware, the Virgin Islands and the United States. Delaware, British Virgin Islands (BVI), Panama etc. Even if he could request numbered accounts.

 

When the client was the beneficial owner of an Ltd company, the account was opened in the name of that company. The client's name appeared on a document called "form A" which had to be filled in when the account was opened by the AC. The practice was to have the client systematically sign it, especially for foreign clients, whether the banking relationship was opened in the name of a legal entity or a natural person.

 

In addition to offshore companies, the CAs offered certain clients family foundations under Liechtenstein law (this was more common among UBS's relationship managers) or trusts (this was more common among SBS's relationship managers). The bank account was opened in the name of the foundation. A Liechtenstein lawyer or notary was given power of attorney over the account, and at the same time a UBS employee was a member of the foundation's board and as such had signing authority to facilitate the operation of the account. The client was the "primary beneficiary" of this foundation and his name appeared in the foundation documents. Foundations had started to be replaced by trusts around 2002 or 2003. Trusts had become very popular in the 2000s. The bank avoided trusts in Jersey or Guernsey because these countries were located in Europe. It was therefore trusts in the Bahamas that were taxed, then those in Singapore (but this was less practical for management because of the time difference). In principle, the CAs only offered it to clients with at least one million Swiss francs. There was a minimum lump sum of CHF 10,000 to set up the trust and CHF 5,000 per year.

 

By 2008, UBS had developed and sold a trust called "light", still based on Bahamian law, because it was the same for all clients who bought it. It was very rigid in its operating rules. The client could not decide, as in a traditional trust, that after his death the assets would not be distributed for a certain period of time and that they would be distributed later. He could only designate the persons to whom the funds were to revert on his death.

 

The client had no more leeway than with life insurance contracts. But the advantage for him was that, unlike life insurance, which was offered by UBS LIFE, i.e. a Swiss company, the trust was governed by the law of the Bahamas, and was therefore 'further away' and more opaque to French tax authorities.

 

When some clients were concerned about the possible connections between the Bahamas and the US tax authorities, UBS proposed the Singapore trusts.

 

As they were less expensive, the so-called "light" trusts could be offered from five hundred KCHF of assets under management. These trusts were really ways to avoid the EUSTIP regulation. The trust could invest in products covered by the directive without being subject to it. Moreover, unlike life insurance, where the client had to give a management mandate, the trust holder could continue to manage his assets himself, with the help of his advisor.

 

The life insurance was the 'trust for the poor', for assets of 100 KCHF. The account holder was UBS LIFE and not the client. UBS LIFE therefore had thousands of accounts with UBS AG. The client was the primary beneficiary of the life insurance and was not listed in the "Form A". In the case of a person who was already a client of UBS, the CA offered to sign this life insurance contract, and all he had to do was indicate to whom the funds would go in the event of his death, and he had to sign a management mandate to a team at UBS AG, which passed the file on to UBS LIFE, which then opened the account, which was managed by UBSAG. However, the client continued to contact his usual CA, who still had an overview of the account status. The mandatory management mandate was another difference from the trust (even if it was 'light'). With the trust, the client could either give a management mandate or choose discretionary management, i.e. manage the account himself in agreement with the CA.

 

The anonymity service was offered to accounts opened in the name of a natural person, but also to accounts opened in the name of a legal person, when it was a domiciliary company.

Sylvie JETZER, for her part, questioned on 3 April 2014 as an assisted witness, reported that "tax arrangements" did not come under the authority of the CA but went through the Wealth Planninf! She confirmed that trusts and foundations were well-known institutions at UBS, as they were at BNP and everywhere else in Switzerland. She also knew about the travel cash cards that could be used all over the world. At the end of 2007-2008, a French firm had been commissioned by UBS to set up the possibility of issuing IFU forms. This service was charged to clients at 300 Swiss francs.

 

The representative of the Swiss bank admitted under questioning that the bank could have envisaged with some of its clients the creation of domiciliary companies (offshore companies set up to make investments but which themselves had no economic or commercial activity). He was certain: "I am sure that UBS business managers had discussions with their clients about the use of domiciliary companies, but that there was no incentive to do so and that it was not a service offered to the client.

 

These companies could sometimes have an employee, such as an unfamily office employing an investment manager. These included companies incorporated in the British Virgin Islands (BVI) or the Cayman Islands.

 

Anonymous witness no. 119 stated that in 2007 he reported to the US authorities the following tax evasion practices similar to those described in this information

- the creation of offshore companies (known as domiciliary companies) and any other client entity such as trusts to hide assets owed;

- the system of anonymous numbered accounts;

- clandestine canvassing on US territory (the "hunters" came with laptops encrypted using procedures developed internally by UBS);

- cash transactions;

- clearing mechanisms.

 

According to Bradley BIRKENFELD, the internal instructions given by the bank's management were perfectly hypocritical. It knew perfectly well that they were not respected by the ACs. UBS had deliberately carried out canvassing on American territory even though it had no licence, while "covering up" by publishing internal notes (the country papers). UBS had facilitated the tax evasion of its American clients by providing them with bank statements while knowing that they had not filled in the W-9 tax form. Before leaving Switzerland, the CAs would send client or prospect data on an encrypted e-mail, then cross the border with an empty computer. Once in the US, the CA could download the sensitive data.

 

Although the bank did not acknowledge it, the creation of offshore companies was a deliberate policy of UBS. Indeed, a checklist of the documents required to set up such domiciliary companies or trusts was distributed to all CAs. For the United States and Canada, the ACs directed clients to service providers who supplied such companies approved by UBS, which called them Approved Service Providers (ASPs). For Europe and therefore France, there was a department responsible for setting up foundations and trusts. As regards trusts, UBS had every interest in setting them up.  If a UBS subsidiary was placed as a trust or fiduciary agent, it was much more complicated for the client to change banks.

 

The investigating magistrates 'tried to clarify whether the funds thus deposited were likely to be 'repatriated to France' or whether they were likely to be used outside the territory of the Swiss Confederation.

 

Witness no. 119 recalled that a sum of €9,999 could be transported from Switzerland to France without any obligation to declare it, and this for all currencies and per family (and not per individual). But this method could not satisfy clients with greater financial needs and those who did not want to travel to Switzerland personally.

 

According to the same witness, UBS AG could make money available to a client travelling to Luxembourg at a branch of its Luxembourg subsidiary. The reverse was also true, but more rarely. Until 2001 or 2002, it was even possible for UBS AG to make such deposits in banks other than UBS.

 

According to anonymous witness no. 119, the bank agreed to issue credit cards without a logo, but with the first and last name of the client. When the account was in the name of an offshore company, there was the name of the company and the name of the person authorised to use it. It was also possible to issue it without his name and with only the name of the company, if he only wanted to use it to withdraw cash from ATMs. It was possible to have monthly ceilings of 50 KE or even 100 K€.

 

If the customer so requested, the bank could make direct payments from the UBS account to hotels for the settlement of their days abroad. Until 2006 or 2007, the hotel's bank received information from "one of our clients". An EU directive then required disclosure of the originator's name. This service offered by UBS was therefore no longer of interest to clients, at least for payments within the European Union.

 

According to Pierre GERBIER CONDAMIN, for the French tax resident, the Lombard loan was an effective technique: it consisted of taking out a loan in a French bank which took a guarantee. This bank had a relationship with a Swiss bank in which undeclared funds were deposited. It was a loan granted to the client on the basis of his own funds in Switzerland. Anonymous witness no. 119 also described one of the modalities of the Lombard loan: 'It is Switzerland that lends and then sends the funds to France office. These funds are justified by this loan, which is in fact guaranteed by the undeclared account (pledge etc.), but which is in fact guaranteed by a declared account opened at UBS Switzerland on the occasion of this operation. The client thus finds himself in Switzerland with an undeclared account and a declared account. Often the sums in the declared account came from savings the client had in other banks. In addition, the opening of this official account had the advantage of freeing the client from a lie and from the suspicions of the customs officer: to the question 'do you have an account in Switzerland', he could answer yes and the customs officer would stop asking questions.

 

To repatriate the undeclared funds, the French tax resident also used the life insurance system, the economic beneficiary of which was an insurance company that in reality masked the natural person holding the insurance. A letter received by the investigating judge on 9 March 2016 and signed with the first name Rosario, which could correspond to the Geneva office's Director of Administration, Rosario RIENZO, mentioned on the organisation charts of the France International Department, appeared to confirm the statements of anonymous witness no. 119 and Pierre GERBIER CONDAMIN. According to the signatory of the letter, UBS had organised in 2009 and 2010 the transfer of funds held by offshore structures of certain French residents to even more opaque Swisslife Singapore life insurance policies. It was a remote location but 'it was convenient (we know them) and efficient'. Not all French residents were centralised with the French sector in Geneva, Lausanne, Zurich or Basel. He says that Joëlle Pacteau, who had also worked at Swisslife, knew the figures. There was an internal competition to manage the accounts with the most credits and thus obtain the best bonuses.

 

The most used method would have been in relation to a compensation system. The anonymous witness described the clearing systems schematically.

 

A client A needed €100 in Paris and a client B wanted to deposit €100 in Geneva. All B had to do was bring the €100 to A and A would transfer €100 to B. Some CAs made the connection between clients A and B themselves. For some, it was even semi-industrial. There was one who came to Paris and spent half his time in his hotel room for a week receiving and giving money. Back in Geneva, he would spend maybe two days doing all the cash receipts to regularise these compensations. Some clients would act as mules for UBS and get a small commission. In some cases, A and B, left in the dark about their common clientele, were given an appointment in town.

 

Officially, the hierarchy of UBS AG had forbidden these practices and knew nothing about them. But in reality they were aware of it. The only defined management practice was that if the AC was caught, he was fired on the spot. The witness cited the example of 'a certain Michel WICHT, CA at the Lausanne office, living in Fribourg, who was dismissed in 2003. He described the following scene that took place in Paris, at the Piazza Athénée hotel. A person had placed a bag at the table where the witness was sitting with his boss and left. There was no receipt and no count. The chef got up to count the cash in the toilet before the person to whom the money had been given arrived. In 2010, these practices continued. Each CA had its own method, its own courier, its own intermediary. There was obviously no formalised procedure.

 

Béatrice BRETHOMME, a public finance administrator assigned to the department responsible for processing corrective declarations, which is in charge of handling the tax files of taxpayers with undeclared foreign assets, cited the case of a taxpayer, Mrs Fateneh Nayer ADIB, widow of MADANI, living in Paris (15th district), who, on the advice of the UBS AG bank, had set up a family foundation in Vaduz (Liechtenstein) to conceal assets held in Switzerland since the 1970s. This foundation held shares in a company based in the Bahamas and was the holder of the account held in the books of UBS AG in Zurich (credit balance of USD 1,025,516 as at 31 December 2009).

 

It also described the clearing system used by a taxpayer to make cash withdrawals. A transfer was made from his concealed account to another account abroad. In return, cash corresponding to the same amount minus a commission was given to the French client on the national territory. Apart from the use of this scheme, the French clients did not have a bank card and went to Switzerland personally to withdraw cash. The two files cited by the witness were included in the present judicial investigation.

 

Generally speaking, it was on the advice of Swiss banks that the taxpayers concerned had set up offshore structures, particularly after the entry into force of the provisions of the Savings Directive, which provides for a withholding tax on the savings income of natural persons who are EU nationals. The interposition of an offshore structure (trust, foundation, company) made it possible to avoid this taxation.

 

It added that compared to other Swiss banks, UBS AG appeared to be one of the least cooperative in providing information on the origin of funds. Some banks certified that the funds came from an estate or from a previous account opened with the bank, which allowed the administration to qualify the taxpayer as passive or active.  UBS never provided such information. UBS AG, on the other hand, almost systematically provided its clients with the "retained mail" service. This system was subject to a charge for custody fees.

 

Mrs BRETHOMME gave the investigators, as an example, a set of documents corresponding to the file on the regularisation of Mrs MADANI's tax situation (MADANI UN seal). The file contained, in particular, a letter of intention to regularise, dated 18 October 2013, written by Nayer ADIB, wife MADANI. She indicated that on the recommendations of the UBS bank's advisors, she and her husband had set up a family foundation which grouped together all the couple's financial assets held at the UBS bank. The file also contained documents relating to the Honaza Foundation, located in Vaduz, of which Mr and Mrs MADANI were the beneficiaries. The various documents in this file enabled the investigators to reconstruct the various stages in the implementation of the scheme devised by the Madanis to hide their undeclared assets from the tax authorities.

 

According to the letter of intent to regularise, the Madani couple held three accounts at the UBS bank:

- Account No. 206887323 opened in the name of the MADANI spouses (Mr. deceased on 29 September 2013), amounting to approximately €750,000;

- account no. 206394563 opened in the name of Mr and Mrs MADANI with a balance of

- 2,100,000 CHF for the year 2005,

- CHF 7,400,000 for the year 2006,

- CHF 9,100,000 for the year 2007,

- CHF 10,700,000 for the year 2008,

- CHF 8,100,000 for the year 2009,

- CHF 6,700,000 for the year 2010,

- CHF 8,900,000 for the year 2011,

- CHF 11,000,000 for the year 2012.

 

According to two former CAs of the France International department of UBS AG, parades were proposed to clients to avoid withholding tax. Pierre GERBIER CONDAMIN stated that opening an account in the name of a legal entity made it possible to escape the provisions of the Savings Directive which had been applicable in Switzerland since 1 July 2005.

 

Witness no. 119 was of the same opinion: the client often wanted to interpose a company. This service was used from the summer of 2005 in order to avoid the consequences of the application of the Savings Directive, which was also called EUSTIP. A offshore company (BVI, AG, Ltd, etc.) holding an account that invested in a product subject to EUSTIP was not subject to this directive, i.e. did not have to choose between taxation at source and transmission of its identity to the FTA. Only natural persons were subject to the Savings Directive. In his view, there were other ways of avoiding it by skilfully composing the client's portfolio. Indeed, the directive only applied to certain financial products, so that it was sufficient to place a product outside the scope of the directive with the client in order to escape the directive. For example, interest on bonds issued after 2001 was within the scope of the directive, whereas share dividends were outside the scope. In order to escape the directive, it was sufficient to choose products that were at least 50% equities. CAs were trying to convince their clients to subscribe to products that were outside the scope of the directive. All this had generated quite a lot of business for UBS, notably through entry fees, switch fees etc.

 

Without remembering the details of the directive, Sylvie JETZER mentioned in her examination as an assisted witness a distinction between capital gains and interest, and an exclusion of reinvested savings products from the scope of the flat-rate levy, so they did not fall within the scope of the directive. She acknowledged that some clients had been offered offshore companies to avoid the provisions of the 2003 Savings Directive.

 

Béatrice BRETHOMME's comments converge on this point: "Orally, the advisers tell the service's agents that it is on the advice of Swiss banks that their clients have interposed offshore structures, particularly after the entry into force of the European Savings Directive (ESD).

 

These are the documentary and testimonial elements contained in the investigation file submitted to the Court's appreciation, which once again recalls that the above-mentioned incriminating elements are denied and contradicted in the written submissions.

 

Following the indictment of all the persons under investigation or sought, with the exception of Patrick de FAYET, who was referred to the judge of homologation for the purposes of implementing an appearance on prior recognition of guilt. As this procedure was not successful, a summons of 26 October 2017 was issued to him. And he appeared before the court finally competent to rule on his guilt;

 

Following the debates held before this court, the judgment referred to by the above-mentioned regular appeals was pronounced on 27 September 2021.

 

BEFORE THE COURT,

The court indicates at this point that all of the appellants and respondents contest any involvement in the commission of the facts referred to; the legal and factual reasons being recorded and detailed in the pleadings filed.

 

The Court specified that a priority question of constitutionality had been raised in the first place and that with the agreement of the parties, this question had been examined at the same time as the merits of the dispute.

 

The Court recalls that by judgment of 28 June 2021, it was judged that this priority question of constitutionality, which was not of a serious nature, did not have to be transmitted.

 

Secondly, the court integrates the exceptions and means of nullity that have been debated. The court must note that in the pleadings lodged the incompetence of the court and consequently the incompetence of French justice to hear this case is raised. It will be explained that the Court of Appeal should declare itself incompetent. The court specifies to integrate in order to expose the debate in its entirety the terms of the judgment relating to this exception as well as the essential part of the writings opposed to this exception.

 

I. On the objection of lack of jurisdiction

 

In its pleadings for discharge filed on 23 March 2021, UBS SA requests that the French courts be found to lack jurisdiction to rule on the complicity of UBS SA in an offence committed abroad.

 

In support of its claim, UBS France relies on Article 113-5 of the Criminal Code. It argues that the twofold condition set out in this text is not met in this case, insofar as the offence of tax fraud laundering did not exist in Switzerland at the time of the events and that no final decision establishing the commission of this offence has been handed down by a Swiss court.

 

In its defence of 22 March 2021. Raoul WEIL raises, in the alternative, the incompetence of the French jurisdiction to judge the offence of aggravated tax fraud under articles 113-2. 113-7 and 113-8 of the Criminal Code. According to him, none of the acts complained of were committed in France and the offence at the origin of the laundering cannot be considered as a constitutive fact of the laundering to allow the French judge to declare himself competent to judge the laundering abroad of a principal offence committed in France.

-Secondly. Mr Raoul Weil asserts that there is no indivisibility between money laundering and the original offence. Finally, he considers that French jurisdiction cannot be retained because of the nationality of the victim, since the legal requirements have not been respected.

 

The French State. by submissions dated 22 March 2021. considers that the plea of lack of jurisdiction should be dismissed. It relies on Article 113-2 of the Criminal Code, which states that an offence is deemed to have been committed on the territory of the Republic if one of its constituent acts took place on that territory. Invoking the case law of the Court of Cassation, he asserts that the notion of justifying fact

-He added that this solution had been confirmed by the Court of Cassation. He adds that this solution has been confirmed by the Criminal Chamber in the case of concealment, which is transposable to money laundering, and is based on fraudulent conduct. In addition, in response to UBS France's argument on this point, the French State considers that the offence of aggravated tax fraud laundering of which UBS France was an accomplice, is deemed to have been carried out on French territory pursuant to Article 113-2 paragraph 2 of the Criminal Code.

 

Motivation of the court

 

The Swiss company UBS AG was referred to the criminal court for acts of aggravated tax fraud committed in Paris. on national territory. in Switzerland from 2004 to 2012. Raoul W.... Dieter K.... Olivier B... and Philippe I... were sent back for the same offence committed in Paris. on national territory and in Switzerland, for the first from 2004 to November 2008, for the second from 2004 to September 2008. for the third from October 2007 to March 2009 and for the fourth from 2004 to October 2007. UBS France, a company incorporated under French law, is being prosecuted for complicity in the aggravated tax fraud laundering in Switzerland from 2004 to 2012, which is alleged to have been committed by UBS AG from 2004 to 2008.

 

The prosecution is based on Article 324-1 paragraph 2 of the Criminal Code, i.e. the fact of having assisted in an operation of investment, concealment or conversion of the direct or indirect proceeds of a crime or offence. The main offence targeted is the offence of tax fraud.

 

Article 113-2 of the Criminal Code states that: "French criminal law is applicable to offences committed on the territory of the Republic. The offence is deemed to have been committed on the territory of the Republic when one of its constitutive facts has taken place on this territory".

 

The courts have interpreted the notion of constitutive act broadly, which includes facts other than a constitutive element, even if understood broadly.

 

It is sufficient that one of the money laundering operations was carried out in France for the offence to be considered as having been committed on the territory of the Republic.

 

In other words, any act that participates in the material implementation of money laundering or that prepares it and that can be located in France can be retained.

 

In the present case, the preliminary investigation and the information have revealed facts that precede and participate in the material realisation of the offence of aggravated money laundering of the offence of tax fraud, facts that originate in the territory of the Republic.

 

Among these constitutive facts, the presence on the territory of the Republic of a French subsidiary of the UBS AG bank, UBS France SA, should be noted. a direct approach or through the intermediary of "events" organised on French territory of French tax residents (clients or prospects) targeted by business managers established in France or employees of UBS AG obeying more than doubtful instructions. In addition to the above, the UBS AG has a number of other services to offer to its clients, such as the opening of accounts and the deposit of funds into accounts opened with UBS AG. The services offered guarantee the holder the anonymity of the assets deposited and the income generated that he wishes to avoid paying tax in France.

 

It is clear that these methods, which were implemented in France at the initiative of UBS AG with the complicity of UBS France, were intended to assist in the concealment of funds resulting from the offence of tax fraud committed by highly taxed French citizens who had tax obligations towards the French State and to generate profits for UBS AG and UBS France in the management of these assets.

 

The link of dependence between the original offence, in this case tax fraud, and the consequential offence, aggravated money laundering, can also be highlighted and tax fraud committed in France can be considered as part of the offence of money laundering.

 

This solution was reached in a judgment of 26/09/2007 (Cass.Crim. 26/09/2007 n°07- 83.829) in the presence of the offence of concealment whose legal dependence linking the prior offence and the offence of concealment illustrates its character as an offence of conspiracy, thus making the choice, for the analysis, to relegate to second place its character as an autonomous offence.

 

Articles 113-5. 113-6. 113-7 and 113-8 of the Criminal Code are not applicable in this case, since there is already a criterion of jurisdiction on the basis of Article 113-2 of the Criminal Code, the criteria of jurisdiction being alternative and not cumulative.

 

In the event, the jurisdiction of the French court for the offence of aggravated money laundering should be retained and the objections to jurisdiction raised should be rejected.

 

li. On the objections of nullity

 

UBS AG :

 

By submissions filed and referred to at the hearing on 8 March 2021, UBS AG makes the following claims in limine litis:

 

- that all the elements, documents and minutes obtained by way of administrative assistance with Germany be declared inadmissible as movens de evidentias and be excluded from the proceedings. Firstly, on the admissibility of its claims, UBS AG argues that the contested documents come from the tax authorities and are therefore excluded from the scope of the annulment proceedings under Article 170 of the Code of Criminal Procedure. which allows it to contest their admissibility before the criminal court. UBS AG relies, on the one hand, on the treaty between Germany and France of 21 July 1959 and the German law transposing Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and, on the other hand, on the OECD standard tax convention. UBS AG argues that the submission of the disputed documents to the Direction Nationale des EnQuêtes Fiscales (DNEF) on request is a misuse of the international administrative assistance procedures, which prohibit the use of information gathered through them for criminal purposes, and a violation of the principle of speciality governing the matter.

 

- That all the elements, documents and reports obtained through administrative assistance with Switzerland be declared inadmissible as evidence and excluded from the proceedings. Firstly, on the admissibility of its claims, UBS AG argues that the contested documents come from the tax authorities and that they are therefore excluded from the scope of the annulment proceedings under Article 170 of the Code of Criminal Procedure, which allows it to contest their admissibility before the criminal court. UBS AG relies on the convention between Switzerland and France of 9 September 1966 on the one hand and on the OECD standard tax convention on the other.           -

 

By pleadings duly filed and certified on 8 March 2018, the French State, as a civil party, submits and concludes that UBS AG's claims should be declared inadmissible or in any case that they should be declared unfounded.

 

The French State argues that these claims do not fall within the scope of objections to nullity and that UBS AG is precluded from raising any objection to the nullity of the acts and documents of the proceedings prior to the referral order.

 

The French State also concludes that the applications should be rejected.

 

The Public Prosecutor's Office, with regard to the elements of the investigation obtained from the French tax authorities, argues that UBS AG is inadmissible to raise such motions at this stage of the proceedings in accordance with the provisions of Article 385 paragraph 3 of the Code of Criminal Procedure. He added that there is no legal basis for the criminal courts to declare 'inadmissible the means of

-evidence". He explained that the office of the criminal judge is limited to assessing the probative value of the evidence in accordance with Article 427 of the Code of Criminal Procedure.

 

As regards the documents obtained through administrative assistance with Germany, the public prosecutor considers that the transmission of these documents results from a communication between tax administrations and with the agreement of the Bochum parish. It explains that the German authorities offered to redirect the IRC of 23 July 2015 to the department responsible for processing it. He added that the provisions of the Franco-German double taxation agreement, the OECD model agreement and the directive on administrative assistance had been complied with.

 

With regard to the documents obtained through administrative assistance with Switzerland, the public prosecutor considers that the communication to the judicial authority by the DNEF of the information obtained by the Swiss tax authorities complies with the provisions of the Franco-Swiss tax treaty of 9 September 1966, interpreted in the light of the OECD tax treaty.

 

In its judgment of 20 February 2019, the criminal court declared UBS AG inadmissible to raise nullities under Articles 179 and 385 of the Code of Criminal Procedure.

 

Hervé d'HALLUIN

By submissions filed and served on 8 March 2021. Hervé d'Halluin raises in limine litis the annulment of the order for referral to the criminal court dated 17 March 2017.

 

In support of his claim, he relies on the preliminary articles. 179. 184. 384. 385. 388 and 459 of the Code of Criminal Procedure. on Article 6§3 of the European Convention for the Protection of Human Rights, as well as on Article 16 of the Declaration of the Rights of Man and the Citizen.

 

On the one hand, he argues that the terms of the prevention of the order for referral do not allow him to determine the exact facts of which he is accused, both as regards the facts of complicity in illegal canvassing and the handling of stolen goods in this offence.

 

On the other hand, he argues that the indeterminacy of the facts of which he is accused infringes his rights of defence and that this infringement, being of a substantial nature, necessarily causes him harm.

 

Lastly, he asked that the incident not be dismissed on the merits, considering that the question of the indeterminacy of the charges affects the rules of fair trial and respect for the rights of the defence, which can be assimilated to provisions affecting public policy.

 

The Ministry of Justice argues that the facts mentioned and detailed in the committal order are clear and comply with Article 184 of the Code of Criminal Procedure. In addition, the Financial Public Prosecutor stated that the provisions of Article 385 of the Code of Criminal Procedure did not allow the order for referral to be quashed at this stage of the proceedings and requested that the judgment be confirmed.

 

The Criminal Court rejected the exception of nullity raised by Hervé D'HALLUIN on the grounds that the referral order complied with the formalities provided for by Articles 175 and 184 of the Code of Criminal Procedure.

 

Philippe WICK

 

At the hearing on 8 March 2021. Philippe WICK raises, in limine litis, several objections to the nullity of the case and submits that these incidents should not be joined to the merits of the case because, on the one hand, they concern the regularity of the referral to the court and, on the other hand, they constitute grounds of public order.

Philippe WICK requests :

 

- that his claims be deemed admissible.

 

Philippe WICK relies on articles 131, 134, 179 and 385 of the Code of Criminal Procedure and invokes the case law on arrest warrants of the European Court of Human Rights and the Court of Cassation.

 

He argues that a person who has been the subject of an arrest warrant is inadmissible to raise procedural nullities before the criminal court only if his state of flight was established. The Court of Cassation also stated that the judge must characterise in concreto the state of flight in order to exclude a person who is the subject of an arrest warrant from the benefit of the provisions of Article 385 paragraph 3 of the Code of Criminal Procedure. Finally, it states that flight is characterised if the person subject to the arrest warrant knows that he or she is wanted, has knowledge of the alleged offences and voluntarily evades prosecution.

 

It considers that in the present case he could not be considered to be a fugitive, in that the summons sent on 9 October 2014 was irregular: That no request for mutual legal assistance by ministerial means was made despite the FOJ's requests to comply with the Franco-Swiss international conventions: that he made his best efforts to be heard in the proceedings and that he could not follow up on the summons from the French judge given the risk of criminal prosecution in Switzerland for breach of banking secrecy which weighed on him.

 

- that the arrest warrant issued on 9 January 2015 against him be declared null and void: that the subsequent acts be declared null and void (i.e. the final indictment of 24 June 2016, the committal order of 27 March 2017 and the order of placement under judicial supervision of 3 July 2018): that the court consequently declare that it is not seized with regard to Philippe WICK and that the security deposit constituted in the sum of 150,000 euros be returned.

 

In support of his claim, on the one hand. Philippe WICK repeats the argument previously mentioned, according to which he could not be considered to be in a state of flight. On the other hand, he adds that the issuance of an arrest warrant must meet the criteria of necessity and proportionality. He argues that in the present case the issuing of the arrest warrant against him did not meet these criteria in that he never objected to the principle of his hearing and that the investigating judge could use mutual legal assistance to hear him.

 

On the annulment of the subsequent acts. Philippe WICK invokes the principle according to which no one can be tried or indicted without having been heard or duly called. He argues that the irregularity of the arrest warrant necessarily affects the validity of the committal order, since he does not have a status equivalent to that of the accused for the purposes of Article 176 of the Code of Criminal Procedure and he cannot therefore be commuted to the criminal court as it stands. Lastly, he stated that the contested arrest warrant was the necessary basis for his judicial supervision.

 

In any event, he considers that the invalidity of the arrest warrant issued against him necessarily adversely affects him under Article 802 of the Code of Criminal Procedure.

-He was deprived of the possibility of formulating requests for acts and raising nullities: he did not benefit from the rights of Article 175 of the Code of Criminal Procedure; and his only alternative was to constitute himself a prisoner.

 

- that the order of referral be declared irregular in that it was not motivated "by specifying the elements for the prosecution and the defence" in accordance with article 385. 184 and the preliminary article of the code of criminal procedure as well as article 6-1 of the ECHR.

 

- The requisition sent to the DNEF on 16 July 2015, the writ of summons of the DNEF dated 20 July 2015, the report on the seizure of exhibits dated 27 July 2015 and, more generally, any procedural act carried out on these documents should be annulled: documents D2155/3, D2159/5.  D2156 to D2158. D2359 and seal n°JI//CD Strafa-Fa Wuppertal be removed from the file: any procedural act referring to these documents, including the terms of the prevention, be cancelled.

 

- On the documents obtained from the Swiss tax authorities: that the requisitions sent to the DNEF be cancelled (Dl096 to D1098. D1162, Dl 166 to D1167. Dl 720. Dl 721. Dl 728. D2133). the subsequent requests for assistance (D1163, Dl 164. Dl 168. Dl 169. Dll 71 and Dl 172) and any procedural act carried out on the basis of these documents be withdrawn from the case file: that these documents be withdrawn from the case file: (Dl 724. Dl 726. Dl 727. D1918. D1924. D1987. D2036. D2037. D2057. D2136 to D2139): that any document or act mentioning it, including the order for referral, be cancelled.

 

To support his request. Philippe WICK relies on the Franco-German tax convention of 1959 and the Franco-Swiss tax convention of 9 September 1966. He argues that the matter is governed by a principle of speciality, according to which items collected abroad cannot be used for purposes other than those for which they were requested. He argued that the administrative assistance agreements on the basis of which the disputed documents had been transmitted to the DNEF expressly prohibited their use for criminal purposes and that, by obtaining these documents and then adding them to the information file, the investigating judges had violated the principle of speciality and the provisions of the agreements.

 

By submissions filed and certified on 8 March 2021, the French State, as a civil party, in response to the objections raised in limine litis by this defendant and by Dieter KIEFER and Olivier BAUDRY, requests that their claims be declared inadmissible.

 

The French State considers that Messrs KIEFER. WICK and BAUDRY are inadmissible to raise nullities before the criminal court on the basis of Articles 134, 175, 179 and 385 of the Code of Criminal Procedure. He maintained that the arrest warrants issued - were valid and that the state of flight of Messrs KIEFER. WICK and BAUDRY was characterised by the fact that they were perfectly aware of the proceedings and charges brought against them and that they did not intend to intervene in the investigation procedure. He added that the summonses sent were valid and did not constitute a necessary precondition for the validity of the warrants. He also pointed out that Joëlle Pacteau had complied with her summons without objection and had not been prosecuted for breach of banking secrecy. Finally, he maintains that it was not possible to obtain mutual assistance in criminal matters from the Swiss authorities, given the Swiss position. Lastly, it states that the proportionality and necessity criteria apply only to cases of persons residing outside the territory and that in this case these criteria were met.

\

On the documents obtained from the German authorities

 

The civil party, the French State, after recalling the chronology of the formalities for requesting mutual assistance, states in its conclusions that the conventions were respected. It states that the investigating magistrates were indeed an 'authority' concerned by a procedure before the tax authorities and that no authorisation was required for the communication. He added that there was no abuse of process.

 

On the documents obtained from the Swiss authorities

 

The plaintiff, the French State, considers that the investigating magistrates' requisitions to the DNEF are not vitiated by nullity in that they are based on Articles 99-3 of the Code of Criminal Procedure and L.101 of the Book of Tax Procedures. Furthermore, he argued that the requests for administrative assistance made by the French tax authorities complied with the provisions of the Franco-Swiss Convention of 9 September 1966 in that the investigating magistrates were indeed an "authority" concerned by a procedure within the meaning of the Convention and that this procedure concerned tax. He concluded that no authorisation was required before the information thus transmitted was communicated to the judges.

 

On the arrest warrants issued for KIEFER. WICK and BAUDRY

 

The French State, a civil party, considers that Messrs KIEFER. WICK and BAUDRY are inadmissible to raise nullities before the Criminal Court under Articles 134, 175, 179 and 385 of the Code of Criminal Procedure. He maintained that the arrest warrants issued were valid and that the state of flight of Mr KIEFER. WICK and BAUDRY was characterised by the fact that they were perfectly aware of the proceedings and charges brought against them and that they did not intend to intervene in the investigation procedure. He added that the summonses sent were valid and did not constitute a necessary precondition for the validity of the warrants. He also pointed out that Joëlle Pacteau had complied with her summons without objection and had not been prosecuted for breach of banking secrecy. Lastly, he maintains that it was not possible to obtain mutual assistance in criminal matters from the Swiss authorities, given the Swiss position. Lastly, it stated that the proportionality and necessity criteria applied only to cases of persons residing outside Switzerland and that these criteria had been met in the present case.

 

The Public Prosecutor's Office submits that the applications for annulment made by Philippe WICK are inadmissible. Olivier BAUDRY and Dieter KIEFER. It maintains that it is clear from all the elements of the proceedings that these three defendants were all summoned by the National Judicial Customs Service to be interviewed as suspects in the context of the execution of the letter rogatory issued and that they submitted similar replies to justify their refusal to comply with these summonses. He underlined the bad faith of the defendants who had tried to make people believe that there was a risk of criminal proceedings in Switzerland, whereas other nationals who had previously appeared had not been prosecuted. Finally, he indicated that the summonses sent were legal under French law.

 

In the alternative, the public prosecutor's office requests the rejection of the requests for annulment made by Messrs KIEFER, WICK and BAUDRY.

 

The Public Prosecutor's Office states that the issue of the arrest warrants was a measure strictly necessary for the proper administration of justice and perfectly proportionate to the objective of ascertaining the truth. He considered that, in view of the obvious lack of real willingness on the part of the persons concerned to comply with the summonses issued by the court, this was the only means available to the investigating judge to obtain their appearance.  In support of his request, he argued that the risk of Swiss criminal proceedings was not proven: sending summonses to Switzerland without going through the channels of international cooperation was in accordance with French law: Switzerland did not grant mutual assistance in criminal matters in the context of investigations into tax-related offences, which is the case of tax fraud. He added that the examining magistrate had, despite their arrest warrant, agreed to give their counsel access to the file without waiting to issue the committal order to the criminal court.

 

On the applications for annulment, withdrawal and cancellation of the documents obtained from the tax authorities by re-audit, the public prosecutor's office argued that the transmission of these documents was the result of a communication between tax authorities and with the agreement of the Bochum parish. The public prosecutor's office found that the provisions of the Franco-German double taxation agreement, the OECD model agreement and the directive on administrative assistance had been complied with.

 

As regards the documents from the Swiss Confederation, the Ministry of Justice considers that the communication to the judicial authority by the DNEF of the information obtained by the Swiss tax authorities complies with the provisions of the Franco-Swiss tax treaty of 9 September 1966, interpreted in the light of the OECD tax treaty.

 

Dieter KIEFER

By submission filed and certified on 8 October 2018. Dieter KIEFER raises. in limine litis. several objections of nullity and requests that these incidents not be joined to the merits.

 

Dieter KIEFER requests: ,

- that he be declared admissible to raise nullities.

 

Dieter KIEFER relies on Articles 131, 134, 175, 176 and 385 of the Code of Criminal Procedure, but also on the European Convention on Mutual Assistance in Criminal Matters of 20 April 1959 and the Franco-Swiss agreement of 1996. Dieter K.IEFER states that, according to the combined case law of the European Court of Human Rights and the Cour de cassation, the state of flight is the situation in which the accused knows that criminal proceedings are being brought against him and knows the nature and cause of the accusation, and that he has no intention of taking part in the trial or intends to evade prosecution. He considers. that in the present case, he was not in a state of flight at the time of the issuance of the arrest warrant of which he was the object, in that he responded to the investigating judge and had indicated his wish to be heard: aue the summons sent by the investigating department on 13 October 2014 was illegal, so that the fact of not deferring cannot constitute an intention to evade French justice; that by deferring to the summons, he would have taken a risk of violating Swiss criminal law: that, finally, he had always resided at his home at an address known to the investigating judges.

 

In addition, he indicates that he was neither heard nor examined at the time of his referral: that he was not notified of the notice of the end of the investigation: that he was thus unable to formulate any request for action or to raise any nullity: that only the state of flight allows the judges to set aside the application of article 385 paragraph 3 of the code of criminal procedure: that in the present case, as he is not a fugitive, he is not entitled to be examined by the court. In this case, since he is not a fugitive, he is entitled to raise any nullity before the criminal court.

 

- In the present case, he is not a fugitive and is therefore entitled to raise the issue of nullity before the criminal court.

 

In support of his application, on the one hand. Dieter KIEFER reiterates the argument previously developed, according to which he could not be considered to be in a state of flight. On the other hand, he argues that the issuance of an arrest warrant must meet the criteria of necessity and proportionality and that in the present case the issuance of the arrest warrant against him did not meet these criteria. In the present case, the issuing of the arrest warrant against him did not comply with these criteria: in that his residence was known; in that the procedure chosen by the French authorities violated international law and infringed Swiss sovereignty; and in that it was open to the French judicial authorities to have recourse to mutual legal assistance in order to hear him, something which had moreover been requested by the Swiss State.

 

On the annulment of the subsequent acts. Dieter KIEFER maintained that only a person who has been the subject of a valid arrest warrant can be brought before the criminal court without having been previously heard or examined. In the absence of a regular arrest warrant, it follows from Articles 179 and 179-1 of the Code of Criminal Procedure that only persons who have been placed under investigation can be referred to the criminal court, which in this case is not his case and therefore affects the regularity of the referral to the court.

 

Furthermore, he explained that the referral order disregarded the original article and articles 184 and 385 of the Code of Criminal Procedure, as well as article 6§1 of the European Convention on Human Rights, in that it contained only incriminating elements.

 

Lastly, he stated that the contested arrest warrant was the necessary basis for his judicial supervision.

 

- On the documents obtained from the German authorities. that the requisition of 16 July 2015 sent to the DNEF (D2154), the report on the seizure of exhibits of 27 July 2015 (D2159) and all the procedural acts and documents produced on the basis of the unlawfully obtained electronic and paper documents (02156 to D2158) be annulled. D2159/5, D2198) and the summonses for translation (D2191 and D2192): the letter from the DNEF of 20 July 2015 (02155). the electronic and paper documents illegally obtained from the DNEF (D2156 to D2158. D2159/5): That all the documents obtained in this way be cancelled. including the passages in the final indictment and the order for referral referring to them.

 

- On the documents obtained from the Swiss authorities. that the indictments of 4 July 2012 be annulled as principal. 4 October 2012. 8 February 2013. 18 February 2013, 2 July 2013, 4 March 2014, 30 March 2015 addressed to the DNEF and the attached soit- transmits (D 1093. D1095. D1096 to D1098. D1162. D1166. D1167, Dl 720. Dl 721. Dl 728. D2133): that all procedural acts carried out on the basis of these acts be annulled: that the answers provided by the French tax authorities in response to these requisitions be removed from the file (D 1101. D1165. Dl 170. Dl 722. Dl 724/1. Dl 726. D1918. Dl 924/1. Dl 987. D2036. D2037. D2057. D2136) as well as the accompanying documents from the Swiss authorities (Dl 724/2. D1727. D1918. D1924/2. D1988. D1936/1. D2036/2. D2037/2. D2057/3. D2137. D2138. D2139): that all the documents obtained in this way be cancelled, including the passages in the final indictment and the order for reference which refer to them.

 

In support of his application. Dieter KIEFER relies on the Franco-German tax convention of 1959, the OECD model tax convention, Directive 2011/16/EU and the Franco-Swiss tax convention of 9 September 1966. It argues that the matter is governed by a principle of speciality. set out in each of the conventions. which prohibits. or makes subject to unfulfilled conditions. the use for criminal purposes of information gathered under these conventions. Furthermore, he argues that the case law principles established in relation to mutual legal assistance agreements can be transposed to international administrative assistance agreements in that they contain reservations on speciality. He raised the fact that the applicable international texts, on the basis of which the disputed documents were transmitted to the DNEF, expressly prohibited their use for criminal purposes, and that by obtaining these documents and then adding them to the information file, the investigating judges had violated the principle of speciality and the treaty provisions. He considered that this nullity was prejudicial to him and, in any event, was a matter of public policy.

 

In the alternative, all the documents and reports obtained by way of administrative assistance with Switzerland (D1724) should be declared inadmissible as evidence. D1726. D1727. D1918. D1924. Dl987. D2036, D2037, D2057, D2136, D2137, D2138, D2139) in order to remove them from the proceedings.

 

On the arrest warrants issued for K.IEFER, WJCK and BAUDRY

 

By submissions filed and served on 8 March 2021, the French State, in response to the objections raised in limine litis by Dieter K.IEFER. Philippe WICK and Olivier BAUDRY, seeks a declaration that their claims are inadmissible.

 

The French State maintains that Messrs KIEFER. WICK and BAUDRY are inadmissible to raise nullities before the criminal court on the basis of Articles 134, 175, 179 and 385 of the Code of Criminal Procedure. It claims that the arrest warrants issued are valid and that the state of flight of Messrs KIEFER. WICK and BAUDRY was characterised by the fact that they were perfectly aware of the proceedings and charges brought against them and that they did not intend to intervene in the investigation procedure. He added that the summonses sent were valid and did not constitute a necessary precondition for the validity of the warrants. He also pointed out that Joëlle Pacteau had complied with her summons without objection and had not been prosecuted for breach of banking secrecy. Finally, he maintains that it was not possible to obtain mutual assistance in criminal matters from the Swiss authorities, given the Swiss position. Lastly, it stated that the proportionality and necessity criteria only apply to cases of persons residing outside Switzerland and that these criteria had been met in this case.

 

The public prosecutor's office concluded that the applications for annulment made by Philippe WICK. Olivier BAUDRY and Dieter KIEFER. It maintains that it is clear from all the elements of the proceedings that these three defendants were all summoned by the national customs service in order to be interviewed as suspects in the context of the execution of the letter rogatory issued and that they gave similar answers to justify their refusal to comply with these summonses. He emphasised the bad of the defendants who had tried to make people believe that there was a risk of criminal prosecution in Switzerland, whereas other nationals who had previously appeared had not been prosecuted. Finally, it was stated that the summonses sent were legal under French law and that the persons concerned could have made use of their right to silence.

 

In the alternative, the Public Prosecutor's Office requests that the applications for annulment made by Messrs KIEFER, WICK and BAUDRY be rejected.

 

The Ministry explained that the issue of the arrest warrants was a measure strictly necessary for the proper administration of justice and perfectly proportionate to the objective of ascertaining the truth. He considered that, in view of the obvious lack of real willingness on the part of the persons concerned to comply with the judicial summonses, this was the only means available to the examining magistrate to obtain a hearing. In support of his claim, he argued that the risk of Swiss criminal prosecution was not proven: that sending summonses to Switzerland without going through the channels of international cooperation was in accordance with French law: that Switzerland did not grant mutual assistance in criminal matters in the context of investigations into tax-related offences, which is the case of tax fraud. He added that the examining magistrate had agreed to give their counsel access to the file without waiting to issue the committal order before the criminal court, despite their arrest warrant.

 

On the applications for annulment, withdrawal and cancellation of documents obtained by requisition from the tax authorities

 

On the documents obtained from the German authorities by the DGFIP on 24/07/2015.

 

The French State recalls the chronology of the formalities for requesting mutual assistance and considers that the conventions have been respected. It indicated that the investigating magistrates constituted an "authority" concerned by a procedure relating to taxes and that no authorisation was required for communication under Article 16(1) of Directive 2011/16/EU.

 

He argued that the principle of speciality invoked by the defendants should be understood broadly, so that a prosecution for tax fraud laundering in relation to taxes should be analysed as a procedure or prosecution relating to taxes within the meaning of Article 26 of the OECD Model Convention. He added that there was no abuse of process.

 

The public prosecutor considers that the transmission of these documents is the result of a communication between tax authorities and with the agreement of the Bochum public prosecutor. The German authorities offered to redirect the IRC of 23 July 2015 to the appropriate department for processing. He added that the provisions of the Franco-German double taxation agreement, the OECD model agreement and the directive on administrative assistance had been complied with.

 

On the documents obtained from the Swiss authorities by the DGFIP on 24/07/2015

 

The French State considers that the requisitions sent by the investigating magistrates to the DNEF are not vitiated by nullity in that they are based on Articles 99-3 of the Code of Criminal Procedure and L.101 of the Book of Tax Procedures. In addition, he argues that the requests for administrative assistance made by the French tax authorities complied with the provisions of the Franco-Swiss Convention of 9 September 1966 in that the investigating magistrates were indeed an authority concerned by a procedure within the meaning of the Convention and that this procedure concerned taxation. It concluded that no authorisation was required before the information thus transmitted was communicated to the judges.

 

The public prosecutor considers that the communication to the judicial authority by the DNEF of the information obtained by the Swiss tax authorities complies with the provisions of the Franco-Swiss tax treaty of 9 September 1966, interpreted in the light of the OECD tax treaty.

 

Olivier BAUDRY

 

By submissions filed and certified on 8 March 2021. Olivier BAUDRY raises, in limine litis, several objections of nullity and requests that these incidents not be joined to the merits.

Olivier BAUDRY requests :

- that he be declared admissible to raise nullities.

Olivier BAUDRY states that according to the combined jurisprudence of the European Court of Human Rights and the Court of Cassation, the state of flight is the situation in which the accused knows that criminal proceedings are directed against him and knows the nature and cause of the accusation and that he does not intend to take part in the trial or intends to evade prosecution.

 

He considers that in the present case he was not in a state of flight at the time of the issuance of the arrest warrant against him. He considers that the summons sent by the investigating authority on 13 October 2014 was illegal under the 1959 European Convention on Mutual Assistance in Criminal Matters: in that he replied to the investigating judge to request that his hearing be conducted within the framework of ratified international conventions: and that by complying with the summons he risked violating Swiss criminal law. He added that the issuance of an arrest warrant must meet the criteria of necessity and proportionality and considered that these criteria had not been met.

 

- The court ordered the annulment of the rehearing sent to the DNEF on 16 July 2015 (D2154) as well as the transmission and inclusion in the file of all the documents and minutes obtained through administrative judicial assistance with Germany (CD-ROM 'CD STRAFA-FA WUPPERTAL'. D2155/3, D2159/5, seal no. JI/CD Strafa-Fa Wuppertal): paper documents (D2156 to D2158, D2193, D2359, D2360): subsequent documents: translations and additional requests for translation: requests for clarification and corresponding replies (D2191, D2192, D2222, D2223, D2224, D2358, D2361).

 

- The request to the DNEF to obtain information from the Swiss tax authorities (D1096 to D1098, Dl 162, Dl 166, Dl 167. Dl 720. Dl 721. Dl 728. D2133) and the subsequent requests for assistance (D1163. Dll64. Dll68. D1169. Dll 71. Dl 172): all the elements, documents, acts and reports obtained through administrative assistance with Switzerland (Dl 724. Dl 726. Dl 727, Dl 918, D1924, Dl 987, D2036, D2037, D2057, D2136, D2137, D2138 and D2139).

 

To support these two requests. Olivier BAUDRY relies on the Franco-German tax convention of 1959, on the tax convention of the OECD, on the directive 2011/16/EU and on the Franco-Swiss tax convention of 9 September 1966.

 

He argues that the matter is governed by a principle of speciality set out in each of the conventions, which prohibits, or makes subject to unfulfilled conditions, the use for criminal purposes of information gathered under these conventions. He raised the point that the applicable international texts, on the basis of which the disputed documents had been transmitted to the DNEF, expressly prohibited their use for criminal purposes, and that by obtaining these documents and then adding them to the information file, the investigating judges had violated the principle of speciality and the treaty provisions.

 

- The Court of Cassation ruled that the transmission and inclusion in the case file of all the documents and minutes relating to the French taxpayers who had been clients of UBS AG and had used a procedure known as "regularisation" (Dl 786) should be cancelled.

"(Dl 786. Dl 912. D1914. Dl 919. D1935. D1937. Dl 940. D2021. D2022. D2024. D2025. D2026. D2027, D2028. D2340. D2341. D2342. D2343. D2381. D2383.

D2384 and seals UBS ONE, UBS TWO, UBS THREE, UBS FOUR, UBS FIVE).

 

He indicated that the elements thus collected were exploited by the investigating judges, investigators and specialised assistants, and that the results provide the basis for the existence of the offence of tax fraud of 3,773,008,769 euros in the referral order. The Court of Cassation also found that the information contained in these documents was not verifiable, despite UBS AG's requests for documents and appeals to the investigating chamber, and that the plaintiff had access to this information, even though it could have claimed damages and interest. It considers that he was deprived of any possibility of verifying the relevance of the names and figures given in relation to the prosecution for tax fraud, which constitutes a violation of the rights of the defence and a breach of equality of arms under Article 6 of the ECHR and Article 593 of the Code of Criminal Procedure.

 

- The Court of First Instance therefore recommends that all the elements be annulled. The Court of First Instance has not yet taken a decision on this matter. He argued that witness no. 119 had been heard under the terms of Article 706-58 of the Code of Criminal Procedure, even though the legal conditions had not been met and a threat of dismissal had been made. He considered that this hearing infringed the rights of the defence insofar as he was deprived of the possibility of knowing the identity of the witness, even though the hearing was an incriminating element of the referral order.

 

On the arrest warrants issued for KIEFER. WICK and BAUDRY

 

By submissions filed and served on 8 March 2021, the French State, in response to the objections raised in limine litis by Dieter KIEFER, Philippe WICK and Olivier

 

BAUDRY, requests a finding that their claims are inadmissible.

 

The French State maintains that Messrs KIEFER. WICK and BAUDRY are inadmissible to raise nullities before the criminal court on the basis of Articles 134, 175, 179 and 385 of the Code of Criminal Procedure. It claims that the arrest warrants issued are valid and that the state of flight of Messrs KIEFER. WICK and BAUDRY was characterised by the fact that they were perfectly aware of the proceedings and charges brought against them and that they did not intend to intervene in the investigation procedure. He added that the summonses sent were valid and did not constitute a necessary precondition for the validity of the warrants. He also pointed out that Joëlle Pacteau had complied with her summons without objection and had not been prosecuted for breach of banking secrecy. Finally, he maintains that it was not possible to obtain mutual assistance in criminal matters from the Swiss authorities, given the Swiss position. Lastly, it stated that the proportionality and necessity criteria applied only to cases of persons residing outside Switzerland and that these criteria had been met in the present case.

 

The Public Prosecutor's Office concludes that the applications for annulment made by Philippe WICK are inadmissible. Olivier BAUDRY and Dieter KIEFER. It maintains that it is clear from all the elements of the proceedings that these three defendants were all summoned by the National Judicial Customs Service to be interviewed as suspects in the context of the execution of the letter rogatory issued and that they gave similar answers to justify their refusal to comply with these summonses. He emphasised the bad faith of the defendants who had tried to make people believe that there was a risk of criminal prosecution in Switzerland, whereas other nationals who had previously appeared had not been prosecuted. Finally, it stated that the summonses sent were legal under French law and that the persons concerned could have made use of their right to silence.

 

In the alternative, the Ministry of Justice requests that the applications for annulment made by Messrs KIEFER, WICK and BAUDRY be rejected.

 

The Public Prosecutor's Office states that the issue of the arrest warrants was a measure strictly necessary for the proper administration of justice and perfectly proportionate to the objective of ascertaining the truth. He considered that, in view of the obvious lack of real willingness on the part of the persons concerned to comply with the summonses, this was the only means available to the investigating judge to obtain their appearance. In support of his request, he argued that the risk of Swiss criminal prosecution was not proven: that sending summonses to Switzerland without going through the channels of international cooperation was in accordance with French law: Switzerland did not grant mutual assistance in criminal matters in the context of investigations into tax-related offences, which is the case of tax fraud. He added that the examining magistrate had agreed to give access to the file to their counsel without waiting to issue the order for referral to the criminal court, despite their arrest warrant.

 

On the applications for annulment, withdrawal and cancellation of documents obtained by requisition from the tax authorities

 

On the documents obtained from the German authorities by the DGFIP on 24/07/2015.

 

The French State recalls the chronology of the formalities for requesting mutual assistance and considers that the conventions were respected. It states that the investigating magistrates were indeed an "authority" concerned by a procedure relating to taxes and that no authorisation was required for the communication under Article 16 of Directive 2016/EU.

He argued that the principle of speciality invoked by the defendants should be understood broadly, so that a prosecution for tax fraud laundering in relation to

. taxes must be analysed as a procedure or prosecution concerning taxes within the meaning of Article 26 of the OECD Model Convention. He added that there was no abuse of process.

 

The public prosecutor considers that the transmission of these documents is the result of a communication between tax authorities and with the agreement of the Bochum public prosecutor. It explained that the German authorities had offered to redirect the IRC of 23 July 2015 to the department responsible for processing it. He added that the provisions of the Franco-German double taxation agreement, the OECD model agreement and the directive on administrative assistance had been respected.

 

On the documents obtained from the Swiss authorities by the DGFIP on 24/07/2015

 

The French State considers that the summonses sent by the investigating magistrates to the DNEF are not vitiated by nullity in that they are based on Articles 99-3 of the Code of Criminal Procedure and L.101 of the Book of Tax Procedures. In addition, he argues that the requests for administrative assistance made by the French tax authorities complied with the provisions of the Franco-Swiss Convention of 9 September 1966 in that the investigating magistrates were indeed an authority involved in a procedure within the meaning of the Convention and that this procedure concerned tax. It concludes that no authorisation was required before the information thus transmitted was communicated to the judges.

 

The Ministry of Justice considers that the communication to the judicial authority by the DNEF of the information obtained by the Swiss tax authorities complies with the provisions of the Franco-Swiss Tax Convention of 9 September 1966, interpreted in the light of the OECD Tax Convention.

 

On the claims made against the hearing under the status of anonymous witness - witness No 119

 

The French State maintained that the sovereign assessment of the risks to the person concerned by the liberty and custody judge had complied with the legal provisions and in particular the condition of risk and danger. He added that the Investigating Chamber had ruled that there was no reason to annul the hearing, considering that the rights of the defence had been respected and that the bank had the right to debate the elements resulting from this hearing.

 

The Public Prosecutor's Office pointed out that this hearing was the result of a reasoned authorisation from the liberty and detention judge before the existence of threats was characterised and that the facts and the procedure were undeniably serious. In addition, after a reminder of the reasoning of the investigating chamber, he maintained that the hearing of witness No. 119 did not constitute a violation of Olivier Baudry's rights of defence insofar as he had the possibility of debating the matter in the presence of both parties at the trial hearing.

 

On the transmission and inclusion in the file of all the elements, documents, acts and reports relating to French taxpayers

 

The Public Prosecutor recalls the steps taken by the investigating judges with the DNVSF and the rectifying declarations department, as well as the procedure followed by the taxpayers, which constitutes an official acknowledgement that they had assets not declared to the French tax authorities in the books of UBS AG. He considers that UBS AG was in a position to provide evidence to the contrary, for example by submitting contradictory account statements to the court. He argues that it is incorrect that the civil party has additional information at its disposal and that it can produce the tax files of the taxpayers without re-hearing in view of tax secrecy. He added that this evidence had been regularly added to the file and had been the subject of an adversarial discussion.

 

UBS SA

 

By submissions filed at the hearing on 8 March 2021, UBS SA requests in limine litis and as a principal claim, that the documents revealed by Stéphanie GIBAUD (Seal SG and copy SG (D484)) be declared null and void. Seal SG 1. Seal OF 3, Seal FORI 2, Seal FORI 3, D743 to D483 (reference SG DOC 1 to reference SG DOC 11). D637 to D639 (DOCS SG 1 to DOCS SG 3) and D1966 (seals GIB 1 to GIB 4)) in that they are contrary to the right to a fair trial and to the principle of fairness of evidence protected by Article 6 of the European Convention on Human Rights. UBS SA requests that these incidents not be joined to the merits of the case, considering that they affect public policy.

 

In support of its request, UBS SA produces a judgment of the administrative court of 15 November 2018 conferring on Stéphanie GIBAUD the status of occasional collaborator of the forgotten service because of her work with the investigators from June 2011 to June 2012. She claims that this collaboration is in fact a misappropriation of documents belonging to her made for the benefit and on the instructions of the investigators in violation of the King of Morocco case law.

 

In support of the admissibility of this new application in appeal, UBS SA indicates that this cause of nullity appeared after the deadline offered to the applicant to invoke it in accordance with Articles 173 and 173-1 of the Code of Criminal Procedure. In the present case, for UBS SA this nullity appeared with the judgment of the administrative court on 15 November 2018.

 

By separate submissions filed and referred to at the hearing on 8 March 2021, UBS SA raised, in limine litis, the inadmissibility of the public action.

 

In support of its claim, UBS SA states that it is being rehabilitated for the offence of complicity in aggravated tax fraud laundering under the following pretext: "for having been an accomplice, on national territory, from 2004 to 2008, in the provision of means for the aggravated laundering of tax fraud in Switzerland, from 2004 until 2012. In particular, by acting as a relay or intermediary between UBS AG prospects and business managers by organising synergies between teams in the Core Affluent segment". It states that the facts of which it is accused would, if they were proven, constitute the offence of complicity in tax fraud, particularly in view of the principle of application of the special law.  Consequently, it considers that the public prosecution is inadmissible insofar as the public prosecutor's office was not seized of a prior complaint from the tax administration preceded by a favourable opinion from the tax offences commission under Article L.228 of the Book of Tax Procedures.

 

On the requests for nullity and inadmissibility of the documents revealed by Stéphanie GIBAUD:

 

The French State

 

The French State, as a civil party, by submissions dated 8 March 2021, argued that UBS SA's claims were inadmissible because several documents relied on by the company in support of its claim (D46. D85, Dl 74. D273. D344. D483. D552. exhibits n°5 to 7 produced by UBS SA as well as the extracts from Stéphanie GIBAUD's two books published in February 2014 and October 2017) predate the administrative court's decision. The French State maintains that UBS SA could have been aware of the grounds for the invalidity of the acts it alleges.

 

In support of its claim, the French State states that the combination of Articles 173-1 and 174 of the Code of Criminal Procedure is not such as to extend the time limits for raising invalidity beyond the judicial investigation. Consequently, UBS SA's application is not filed in limine litis, even though the referral order was brought to the company's attention and drafted in compliance with Article 175 of the Code of Criminal Procedure.      -

 

In the alternative, the French State requests that the applications for inadmissibility and nullity of the documents revealed by Stéphanie GIBAUD be rejected. In support of its claims, it argues that Stéphanie GIBAUD is a private party. She is therefore subject to the principle of free evidence and not to the principle of freedom of evidence, regardless of the instructions of the investigators to hand over this evidence. The minutes, reproduced by the French State in its conclusions, almost systematically state that the documents were transmitted 'spontaneously' by Stéphanie GIBAUD.

 

On 8 March 2021, the Public Prosecutor's Office requested that the claims of UBS SA be declared inadmissible. In support of this request, it argues that the nullities are removed by the order of referral. Consequently, the claim of UBS SA is foreclosed.  The public prosecutor argues that there is no evidence in the present case that the public authorities intervened in the preparation or obtaining of the evidence, since the minutes state that the evidence was handed over spontaneously.

 

On the request of UBS SA for the inadmissibility of the criminal proceedings, by submissions of 8 March 2021, the French State requests confirmation of the judgment insofar as the existence of aggravated money laundering is established separately and independently of the tax fraud offence, in accordance with the case law of the Criminal Division.

 

In a rehearing filed on 8 March 2021, the Ministry of Justice requested that UBS SA's application be rejected on the grounds that it had no legal basis and that the referral to the court be found to be in order. He added that the offences of tax fraud and money laundering are distinct and relate to different facts and that the laundering of tax fraud, an autonomous offence, is not subject to a complaint from the tax authorities.

 

Statements of the defendants before the court :

 

The priority question of constitutionality was examined and decided by the above-mentioned judgment of 28 June 2021. The exceptions relating to lack of jurisdiction and procedural nullities having been examined, the statements of the defendants before the court should be integrated.

 

Hervé d'HALLUIN

 

Before the court, Hervé d'HALLUIN, who was indicted, contested any canvassing. He stated that he arrived at UBS FRANCE in 2002 as a senior account manager before becoming desk head in 2005. He left his position at UBS SA in 2008.

 

When asked about the presence of Swiss business managers on French territory, particularly during events, Hervé d'HALLUIN said: "It is not a scoop to say that UBS Switzerland was present on the territory. 11 believes that the Swiss bank had a goodwill of French nationals, a lot of money being deposited in Switzerland since the Second World War. He states that members of UBS AG, including Mr KIEFER and Mr WICK, were present at the inauguration of the Lille office in 2004 and confirms that he organised a hunt on the estate of Raymond WIBAUX, one of his prospects, in collaboration with Joanny DALLOZ, a Swiss business manager, who had the budget to organise these hunts. He described two types of events organised by UBS: local events and global events for which it was allocated one or two places to thank its clients, to allow them to have common memories and to offer them what money cannot provide. When asked if he gave the benefit of these events to potential clients, Hervé d'HALLUIN replied in the affirmative. He stated that he did not know how the funding for these events was distributed and that he had never witnessed any illegal action.

 

He stated that he had noticed the presence of Swiss business representatives in the geographical area of the Lille office: "They came to visit us regularly. This presence was felt to be unnecessary (...). I think they came to establish relationships with French counterparts. (...) Once you have one contact per segment and per office, that's enough. (...) So when you see the Swiss passing by, we didn't have these needs, that's what I call pressure. He also explained that the Swiss business managers did not have access to his branch's databases, adding that he had not observed any illicit canvassing by UBS AG in Lille. In response to a question from counsel for UBS AG, he replied that the two audits of 2006 and 2007 had not revealed anything illegal in the Lille branch.

 

Concerning cross-border activity, Hervé d'HALLUIN stated that the Lille office's activity was historically recorded in the ATA's internal application. He explains that it was important for an account manager to be recognised for the results of a commercial action and that it was a tool for compensation between desks. Flows with Switzerland were anecdotal and cross-border flows represented between 20 and 25% of their production. In his own words, "UBS BELGIUM's sales staff were not at the origin of the system, they were people we had canvassed". li explains that the ATA functioned on a point-to-point basis and that there had to be a joint agreement between the desk heads. When asked whether the validation was infonnatic, Hervé d'Halluin replied in the affirmative: 'The two desk heads agree. There are the names of the two desks, the amount, and once the two business managers have agreed, it is sent by e-mail to the two deskheads who validate it (...) It was automatically entered in the accounts. It's not an accounting figure but a recognition of performance. It's just an amount of commercial recognition. The business managers were then informed of the agreement in the ATA tool. According to him, "the application that managed the whole of Europe, rationally speaking, should have been a Swiss application.

 

Hervé d'HALLUIN indicated that he had been informed of the existence of the milk books after his appointment as desk head by Patrick de FAYET at a meeting of regional directors. These would have been set up from the end of 2005. The introduction of these milk books was motivated by two reasons: on the one hand, ATAs of convenience could be carried out between desk officers; on the other hand, the Swiss complained that ATAs were made at 100%. It was therefore indicated at the end of 2005 that 'all business recognitions would be 50/50 by default'. The end of the ATA application was a clear wish on the part of the country managers. The aim was to get bonuses under control. He indicated that, for his part, the milk books consisted of a report to Patrick de FAYET. On questioning by the court, he explained that he did not know when the milk book procedure had been set up for cross-border operations with Belgium, nor why there was initially a disharmony between Switzerland and Belgium.

 

Concerning the altercation between Patrick de FAYET and Omar BERKOUK, Hervé d'HALLUIN explained that, as the latter had allowed funds from a major operation to be deposited in Switzerland, he wanted to be recognised at 100% via the ATA and the dispute had arisen because Patrick de FAYET had asked him to use the milk book. According to Hervé d'HALLUIN, Omar BERKOUK "thought he was going to be had".

 

Patrick de FAYET

 

Patrick de FAYET, who was indicted, was referred, at the end of the judicial investigation, to the judge of homologation for the purpose of implementing an appearance on prior recognition of guilt. As this procedure was unsuccessful, he was summoned to appear before the criminal court by summons dated 6 October 2017. The latter contests the facts of which he is accused.

 

At the hearing, JI indicated that he had been approached to join UBS France as a sales manager before becoming sales director, a position he left in September or October 2009. He said that 'it is a fully-fledged bank which has a certain number of authorisations to operate in France. (...) It functions above all as a French bank.

 

When questioned on specific points of the case, he stated, with regard to the events, that the chargés d'affaires who participated in them were rather 'hunters'. Concerning the distinction between "hunters" and "farmers", he explained that the former were more for "going out to find new clients", the latter for "maintaining relations with the client". He confirmed that he was aware that Swiss business managers participated in events on French territory, some of which were organised by UBS AG in France, but he said that he had not witnessed any illicit canvassing. Concerning the golf trophies, for example, he stated that UBS paid for the transport of the mall s and France paid for the hospitality. On questioning by the public prosecutor, he stated that the group had set the rule that Swiss invitations went through UBS SA, without him knowing the reasons for this.

 

Patrick de FAYET was asked about the e-mail sent to him by Olivier BAUDRY on 31 October 2007 in which he wrote: "Dear Patrick, Thank you for the collaboration this year between our two units, which I found very fruitful. Despite your doubts, which I can understand, I am convinced that if we continue in the climate of trust that we have been able to create, this collaboration will develop further in 2008. As a matter of fact, I am a direct report of Dieter and I know that he will be under pressure to reach the level of cost/income defined in France and will therefore do my best to support him in this task. As a follow up to our discussion last night in the context of the probable departure of Manager O and the agreement between us, I am submitting our verbal agreement in this email as a reminder. You will compensate me for 100% of what I have agreed to, i.e. 20€, if the client should leave the group by June 2008. After that date the risk is mine", he replied at the hearing: "I introduced him to clients and he introduced me to clients. He can't do anything else. We got along well. (...) Clients of UBS AG were convinced to open accounts with UBS France and vice versa. There was cooperation in many other areas, life insurance for example. It didn't stop at exchanging clients. We exchanged legal and tax aspects as well.

 

Regarding Serge HUSS's statements that the CROs were encouraged to share information with the Swiss CROs, Patrick de FAYET replied: "Yes, it's possible, it doesn't shock me. He also confirmed that he had taken part in meetings that mixed the business managers of the two companies, including the one on 7 November 2006 in Geneva. On the subject of meetings of Swiss business managers in France, Patrick de FAYET stated: 'The organisation of the bank has changed. Mrs Bonfante was very zealous in making Mr Vernet responsible for organising the meetings. This calmed the ardour. (...) The business managers were buddies with them and they were not necessarily accepted in the other branches. In response to Maître Le Borgne's question about who had decided to ban access for the Swiss chargés d'affaires, Patrick de FAYET replied that he was not at the origin of this decision.

 

He explained that the transfer ATAs corresponded to a client who had an account in France and decided to transfer his capital to Switzerland. For such an operation, the account manager was recognised for all the funds he had lost. As for the referral ATAs, he explained that these applied when a business agent gave a correspondent in Switzerland to a prospect who wished to expatriate there. The business agent was then recognised for the contribution of this client. Finally, the netting of business recognition corresponds to the sum of several business recognitions. Once this netting had been carried out, he explained that there was a trickle-down effect because he then recognised what was due to each business agent. li claimed to be the author of the change in the rate of business recognition from 100% to 50% for the business agent and the business receiver, but he explained that he had not introduced the notion of on-shore and off-shore in the ATAs.

 

With regard to the milk books, Patrick de FAYET explained that they were a discussion tool between himself and his Swiss counterparts, notably Olivier BAUDRY. As cross-border ATAs were becoming more and more numerous, he explained that he identified the business with Olivier BAUDRY and that once they had reached an agreement, they made an ATA. For him, the milk books were working tools that served as a support for the ATA negotiations, so the data they contained could not correspond to the ATA. The "cow" file consisted of an Excel table listing all the cases. The milk book was the annotated "cow" file, its "reminder". Once he and his Swiss counterpart had reached an agreement, he did not keep his annotated "cow" file, which was then of no use to him. He insists that these milk books were only a working document, "a tool to have a discussion". He also explains that the expression 'milk book' was a 'title that was quite common in Switzerland'. As for the 'cow' file, Ms. PANTAGNIES was at the origin of this title. Meetings with her Swiss counterparts took place approximately every six months. He says: "We were comparing segment by segment or alphabetically by client or business manager. More like business managers'. According to him, Pierre POYET was aware of the existence of the 'cow' file, the 'milk books' and the ATAs, even if he did not deal with them on a daily basis. he specifies, in response to a question from Maître LE BORGNE, that he did not have recourse to the milk books for an internal action in France.

 

Concerning the dispute with Omar BERKOUK, Patrick de FAYET explained that it had arisen because Olivier BAUDRY did not want to give him 100% but only 50%. Finally, in an effort to appease him, he himself credited Omar Berkouk with the missing 50% via an ATA, while Omar Berkouk had this ATA trickled down through other ATAs to the members of his teams who had participated in the operation. On questioning by the Public Prosecutor, Patrick de FAYET stated that Omar BERKOUK knew the owner of the Parisian Royal Monceau palace and had convinced him to hand over the proceeds of the sale to UBS: "He was active in the choice of the UBS bank to deposit the proceeds of the sale there.

 

Regarding money laundering, he said that nothing had changed in 2009 in the practices of UBS SA, since procedures against tax fraud already existed. On the subject of undeclared accounts in Switzerland, he confirms that he was aware of their existence. He stated that if a French client wanted to go to Switzerland, his banker could only inform him of his declaratory obligations with regard to France and the tax clearance system. He indicated that he could not go beyond that.

 

Philippe WICK

 

Philippe WICK, who refused to appear before the investigating magistrate, stated at the hearing that he had headed the "France International" department, Dieter KIEFER being his direct superior during the period of prevention until 31 March 2007. He explained that "France International" was responsible for covering French-speaking clients in France and abroad.

 

When asked about the distinction between "hunters" and "farmers", Philippe WICK stated that he used the expressions "standing advisers" and "sitting advisers": "There was one sitting and one standing and one or two assistants. On questioning by the court, Philippe WICK confirmed that business managers from his department invited prospects to events. During events in France, the business managers charged their expenses to their professional expenses. When they travelled on French territory outside the events, there was a validation and a programme that took into account the budget. Philippe Wick also states that: "The standing account managers [chasseursJ] travelled on average three times a year. He specified that the most mobile case managers were ROSSIER, DUBUIS and DALLOZ. He confirms that he himself attended several events on French territory, as did Olivier BAUBRY. In 2001 and 2002, during two or three golf-trophy events, a pin system had been set up so that the French chargés d'affaires could recognise the Swiss bank's staff.

 

He specified that the standing chargés d'affaires travelled on average three times a year. He organised weekly meetings with the heads of segments, monthly meetings with the heads of desks and annual two-day meetings with all departments and several advisers. He said that he had not been involved in drawing up the country papers but that meetings were organised to ensure that the case officers were up to date with the legislation. Mr VERNET took part in these training sessions with the legal department in Switzerland under his patronage. He specified that unsolicited requests from prospects were frequent. He presented himself as being vigilant about the legality of the actions of his teams and gave as an example the dismissal of one of his employees who had been questioned by the annual audit as not respecting his directives, he described this decision as a strong message.

 

On the subject of the collaboration between France Domestique and France International, Philippe WICK explains that once a year he invited French business managers "so that they could familiarise themselves with UBS". Questioned by Maître DEZEUZE on an exchange of emails between Thomas LE FORESTIER and a certain Philippe CHARRIERE appearing in Annex V of the CPA report, Philippe WICK confirms that he knew the latter as a Swiss chargé d'affaires. He confirmed to Maître DEZEUZE that such an exchange was part of the cooperation between France and Switzerland. Concerning the recognition of business, Philippe WICK confirms the existence of consultation meetings and milk books. He specified that the first meetings were held in person, then by telephone. Before his meetings with Patrick de FAYET, he questioned his business managers, who called him or sent him an email to obtain the benefit of their work. This resulted in a list for him,

The result was a list, "on a piece of paper or an Excel table", drawn up by his assistant. For his part, Patrick de FAYET had his "cow" file. If they agreed, they carried out clean ATAs. On questioning by the court, he confirmed that the meetings were quarterly and that they dealt with about ten, maybe a dozen cases. The fact of using only one ATA was due to the accumulation of cases and the pressure of the case managers. According to him, it was a joint decision, "because it was set up, there were a lot of transactions. (...) The netting came about logically. In response to the public prosecutor's office asking whether it would not have been simpler to do several ATAs, Philippe WICK stated that "it was because of the volume of business".

 

On the subject of the SEG, the sport entertainment group department, he indicated that it had been created in 2000 and dissolved in 2003. While he explained that this department did not depend on UBS France SA, he confirmed that Caroline DURET had been recruited and paid by UBS France. When asked about the UBS France organisation chart found at Caroline DURET's home, in which he appeared, as Mrs MARSOUIN was placed under his name, Philippe WICK replied that he had never seen this document, which seemed to be internal to UBS France.

 

On the subject of simple and complex money, Philippe WICK explained that he was talking more about 'simple accounts' and 'complex accounts'. According to him, it is a typology of management, the "simple accounts" corresponding to traditional management, including "traditional products, cash, bonds, shares, gold", and the "complex accounts", requiring "management strategies", integrating "structured products" intended for "clients who come from countries with different tax legislation". "There was a tax dimension'. However, he added: "I don't think we should talk about optimisation. We are not tax experts.

 

On a question from the court, Philippe WICK indicated that it could happen that there was dormant money but specified that in 2000, "the clients were looking to make their assets grow".

 

On the subject of the remaining bank, Philippe WICK explained that it was a service that had existed for a long time, offered to clients who wished to use it. When asked whether this was the majority of their clients, Philippe WICK replies that there was a significant number. According to his recollection, the periodicity of the direct debit linked to this service was decided by the customer; "there was an annual or quarterly notice. Concerning numbered accounts, he said that this service was invoiced and confirmed that he had known the card index system, with each business manager having his "cardex" box stored in a safe for reasons of confidentiality.

 

When asked about anonymous payment cards, Philippe WICK said that UBS had never issued this type of card. According to him, the bank did not create offshore companies either, but had external partners. He stated that there could have been 10% of clients holding an account via an interposition structure.

 

Olivier BAUDRY

 

Olivier Baudry, who refused to appear before the investigating magistrate, stated at the hearing that he had become responsible for the three segments of "France International" in January 2008 after having been responsible for the HNWI segment. Dieter KIEFER was no longer his superior at that time. He will leave this position on 1 April 2009 and will be replaced by Joëlle PACTEAU.

 

He confirmed that Patrick de FAYET was his contact person when he was head of France International at UBS AG. He agreed with what Patrick de FAYET and Philippe WICK had said. According to him, the participation of Swiss business managers in events on French territory was legal. He explained that they could not canvass because of the existence of country f)aTJers and the practical impossibility of canvassing at these events: "You can socialise with the guests but canvass at these events. I'm referring to guest as prospect because we're not necessarily going to get them as customers. Inviting clients was a way to keep them loyal and even to bring in extra money. He confirms that he himself took part in a few golf courses, in the event organised in the Plevel room, and in the opening of the Nantes office with Philippe WICK and Dieter KIEFER. The court questioned him more particularly about the e-mail intended for Patrick de FAYET in which the sender indicated that Olivier BAUDRY had refused to take an employee from the Strasbourg office to the Alinghi event since his e-mails inviting clients and prescribers: "he did not want the on shore to be presented again". To the question of whether he did not want the on-shore to be re-presented. Olivier Baudry replied: "I can only decide for my teams, I can't decide for the de Fayet teams.

 

On a question from Maître CHEMLA. Olivier BAUDRY indicates that he knows Svlvie JETZER. She is "responsible for border clients". He confirms to Maître CHEMLA that UBS had developed mortgage loans.

 

Concerning the creation of a comf)/ex desk mentioned in his e-mail of 3 July 2007. Olivier Baudry explained that it was the result of the bank's desire to offer tax optimisation solutions. According to him, "simple" management corresponded to management that did not take into account tax optimisation. The objective of the comvlex desk was to bring together a team more specialised in this aspect. "France International" had the human resources and the clients: the product unit was responsible for creating the products. At the court's request. Olivier Baudry confirms that until this initiative, his segment only managed in a "simple" way, without taking into account tax optimisation. Concerning the products, he explained that it was a question of identifying everything that existed for French clients in France in order to ask UBS AG to provide them with the same solutions. According to him, the clients who opted for complex management were declared clients, unlike the clients who opted for simple management. "Not all of them were declared. He added that it was up to the client to declare himself and that this was not the bank's responsibility.

 

On the subject of the "Renew" application. Olivier Baudry explained that this was a global application intended to develop the referencing tools and to eliminate the ATA system that had been presented to him in March or April 2008. An iurist or 'France Domestique' having realised that such an application was illegal, it had never been used.

 

Regarding the remaining banana service. Olivier BAUDRY explained that this was an element of protection of banking secrecy. According to him. According to him, "a large number of UBS AG clients used this service". It was an optional service. As regards the payment terms for such a service, he confirmed that he agreed with what Philippe WICK had indicated.

 

On a question from the court, Olivier BAUDRY indicated that a securities account was svstematically opened. the core of their business being asset management. In addition to this securities account, clients generally had a dollar account, a euro account, a Swiss franc account and even a book account. The securities accounts were for the most part managed under management mandates by the unit, products and services.

 

On the subject of numbered accounts. Olivier Baudry explained that this was a tariffed option offered by the bank. The numbered accounts ensured that a limited number of people within the bank could know his or her identity.

 

Concerning the interposition structures. Olivier BAUDRY explained that UBS had certain companies with which to work. According to him, 'logically'. the bank fees were to be more expensive. without him knowing the rates. No business manager would ever go through such a structure, this role being the responsibility of the Wealth Planning unit.

 

At the request of Maître CORNUT-GENTILLE. Olivier BAUDRY explains that he did not set up these services or even discuss them with clients. He states that "it was a common service". He also stated that he did not have the necessary authorisation to organise events.

 

Dieter KIEFER

 

Dieter KIEFER, who refused to appear before the examining magistrate, stated at the hearing that he had headed the Western Europe department until November 2007. He was in charge of France, Spain, Portugal and Monaco and was chairman of the supervisory board of the French and Spanish subsidiaries.

 

He says that assets under management within France International were in the range of CHF 6-9 billion. France accounted for 40% of Western European volumes.   -

When asked about the reporting done by his employees on the desks and the "business lines", Dieter Kiefer explained that the "France International" division was the only one that had a "business line". Dieter KIEFER explained that there was a monthly meeting with the President of UBS France and Philippe WICK. He stated that the major events were handled by the UBS Group and that the domestic markets had approximately one million/eight hundred thousand CHF. The group wanted to have a strong presence in the domestic P1;1vs to promote the bank. He confirmed that he had been to some events. He said he had been to some events, "especially for the opening of branches in France", and "maybe two or three times in a golf tournament".

 

Concerning the "milk books". Dieter Kiefer said that he did not intervene in the preparatory process between the sales managers, except twice, "to act as referee". On questioning by the court, he stated that he was not at the origin of the setting up of the 'milk books'.

 

When asked about the distinction between "simple accounts" and "complex accounts", Dieter Kiefer explained that he was not the one who had set up the "milk books". Dieter KIEFER explained that this was not a definition of the bank. In his opinion, the si.moles referred to shares and bonds. Complex accounts took into account the tax dimension. He confirmed that he agreed with the presentation made by Olivier Baudry.

 

At the request of the court. Dieter KIEFER said that in 2005, the bank was not obliged to check the tax status of its clients. He explains: "There was probably fraud among our clients. To the extent that we didn't have to check, it was the client's responsibility.

 

On the subject of events, he gave the example of the one in Lvon, where he estimated the number of guests at 1000, of which 20 or 30 were guests of UBS AG. He justified his presence at this event by the fact that he "certainly did a briefing to explain what UBS wanted to do to develop".

 

On the subject of numbered accounts. Dieter KIEFER reiterated what Philippe WICK and Olivier BAUDRY had said. This was an offer made by all Swiss banks to provide a higher level of confidentiality.

Concerning the method of account management, he confirmed that the majority of clients were under delegated management.

 

Asked about the use of the remaining bank service by France International customers, Dieter Kiefer replied: "The remaining bank service is not used by the Swiss banks. Dieter KIEFER answers: "It was requested by many people. On the subject of interposition structures, he explained that this was a service offered by the bank, which did not set up these structures itself: "We gave them advice on these structures and also pointed them to specialists in these sectors. Contrary to what Beatrice BRETHOMME stated, he denied that clients were encouraged to set up such a structure after the 2004 directive came into force.

 

Raoul WEIL

At the hearing, Raoul Weil confirmed that he was responsible for the "France International" department and the subsidiary

"France International" department and the French subsidiary of UBS. He was Dieter Kiefer's hierarchical superior until his appointment as vice  chairman. He was in charge of the "France lnternational" department within UBS AG and the French subsidiary UBS SA. He claimed to have had meetings with the regional heads of area, including Dieter KIEFER, several times a year and received audit and controlling reports every three months. Only the most serious incidents were reported to him.

 

When asked about the competition between the French subsidiary and the international department, Raoul Weil explained that the French subsidiary was not in competition with the international department. Raoul Weil explained that, in general, this was a problem in many countries: "You had to fish but you couldn't have two fishermen in the same place. If there was a problem, the local market would take care of it and find a solution. >In response to a question from the court, he explained that the problem had been dealt with through "educational energies": "We did management training, actually good practices. He explains that "there was a system that allowed a client who wanted to leave to stay in the bank".

 

Concerning the distinction between "hunters" and "farmers". Raoul Weil explains that this was an expression used in the United States.  The hunter was responsible for finding the client and then passing him on to the farmer. According to him. According to him, "the hunters were very good". He explained that he thought this distinction was silly given the importance of the relationship between the banker and the client. However, it had been explained to him that "some held the castle better and some were better hunters".

 

On questioning by the court. Raoul Weil stated that he received audit and control reports every three months. He added that he had confirmation from the legal department that the business managers were informed of the recommendations of the risk committee, which received reports from the legal department.

 

Asked why tax legislation was not presented in the country vavers. Raoul Weil replied that, at the time, the bank had no obligation under Swiss law. No UBS client had informed him of any problems with the tax authorities. He nevertheless admits that in each bank some clients could commit fraud, which explains why Europe wanted to strengthen controls.

 

On the distinction between "simple" and "complex" accounts, he said that simple accounts were intended for clients who came from countries with no income tax and for whom no instructions were given regarding taxation. For complex accounts. on the other hand. clear instructions were given. the clients concerned then wanted more tax-optimised portfolios. In response to Maître NORMAND-BODARD who asked him whether the accounts of French residents within "France International" were simple or complex. Raoul WEIL stated that it depended on the choice of the clients who could even opt for both categories.

 

UBS SA

 

UBS SA was interviewed by Jean-Frédéric de LEUSSE, Chairman of the Management Board, and Béatrice LORIN-GUERIN, member of the Management Board.

 

About the ATAs. Jean-Frédéric de LEUSSE stated that he had discovered their existence, as well as that of the milk books, after his arrival in Antoine PEILLON's book and that he had deleted them six months after taking office. According to him. the ATAs were useless. except to fix the bankers' bonus. He considers that this tool was useless: "a banker made an ATA once every ten years". According to him, no French bank was setting up such a tool: "this was Hebrew, it did not exist at Crédit Awicole". It was not a cross-border check that would have required the name of the client. He explains the complexity of reconstructing all the ATAs. not all the e-mails were found. According to him, 70% of the ATAs corresponded to relocations.

 

On question of the court. Béatrice LORIN-GUERIN confirmed the presence in France of Swiss business representatives but described the alleged canvassing as 'surreal'. She cites the example of the Rhineland group, a Strasbourg prospect that became a client in Basel. Jean-Frédéric de LEUSSE confirms that the two banks, the parent company and the subsidiary, were competitors, as Swiss bankers could come to France while respecting the law.

 

Jean-Frédéric de LEUSSE specifies that the ACPR has retained three grievances against UBS SA, including the fact that members of UBS AG had access to the premises of UBS SA. The visits of Mr. ZETNER, number 2 of the group, were targeted. The latter met in 2010, and therefore outside the scope of prevention, with two or three clients that UBS SA introduced to him and that Jean-Frédéric de LEUSSE described as "professional financial investors".

 

According to the letters sent by UBS to Pascal BRUN, winner of the Loto jackpot, to open an account in Switzerland. Jean-Frédéric de LEUSSE confirms that the presence of a UBS AG letterhead and a UBS SA footer on a letter is abnormal. Béatrice LORIN-GUERIN indicated that it must be a printing problem. However, according to Jean-Frédéric de LEUSSE, the fact that the documents for opening the account in Switzerland could have been signed on the premises of UBS SA is not illegal. If he does not know where the account opening documents were signed, he confirms that the Swiss business manager and Pascal BRUN met on several occasions in the Bordeaux branch.

 

When asked about the meetings between Dieter KIEFER and members of the UBS SA office. Béatrice LORIN-GUERIN stated that she did not see any problem and Jean-Frédéric de LEUSSE said that it was a matter of courtesy between colleagues: "KIEFER had to come to Bordeaux and we had to ask Wick to invite him to lunch. It is legitimate for him to meet the teams, he has responsibilities in UBS France.

 

On the CoreA sector. Jean-Frédéric de LEUSSE explained that this segment had been developed in close collaboration with UBS AG. Béatrice LORIN-GUERIN stated that she had taken part in several "synergy" meetings, a means, according to her, of being more efficient in compliance with the law.

 

On questioning by Maître DEZEUZE, she explained that Caroline DURET was more of an "internal business contributor". She was a 'free electron' who dealt mainly with non-resident clients.

 

UBS AG

 

UBS AG is interviewed in the person of Christine NOVACOVIC, CEO, who did not work for UBS during the prevention period.

 

She stated that Swiss business managers were present on French territory to meet their clients, whose identity they could not give, in order to restore Swiss banking secrecy. According to her. "In France, it is not well understood that secrecy is regulated by the Swiss penal code. It is very serious ( ... ). Banking secrecy is avv/iQue in Switzerland and outside Switzerland." She explained that for this reason the business managers travelled with encrypted computers: on the other hand, it was clearly stated that the business managers could not help their clients to evade taxes. On the question of the Court. Christine NOVACOVIC stated that the country offices had been established to enforce the law. However, she could not state that no business agent had violated them. It was impossible to monitor all 90,000 employees but UBS took a lot of time to train its business managers.

 

[When asked about the usefulness of providing business representatives with business cards that are free of any mention of UBS. Christine NOVACOVIC replied that she did not see the need and that it had nothing to do with banking secrecy. At the court's request, she specified that the purpose of banking secrecy was to protect the client. According to her, it was not banking secrecy that was invoked during the investigation but commercial secrecy.

 

She explained that until 2012. UBS was forgetting its figures at the global level and not by market share. From 2012 onwards. UBS started to forget its figures at regional level. According to its estimates. in 2007. the figure for "France International" was ten or eleven billion Swiss francs. In 2012, it was around twelve billion.

 

As regards the 2009 reform, she explains that no particular measures were taken in Switzerland because it was enough for UBS to respect the European agreement. The bank nevertheless experienced a change in its relations with its French clients. However. Christine NOVACOVIC explained that it was difficult to know whether clients had left the bank because of the reform or because of the 2008 financial crisis.

 

On the subject of energy. Christine NOVACOVIC explained that they did not consist of envying clients but of giving the other the benefit of their experience. She cited the example of the "Renew" application developed by UBS AG but whose use depended on the choice made by each country.

 

When asked about the case of Lennart BRAG, a prospect invited to the Bouffémont golf course before finally opening an account in Basel. Christine NOVACOVIC said she did not know whether he was at the event or whether he already knew a business agent. She recalled that the legislation on canvassing provides for certain exceptions, particularly concerning qualified investors. In the case of Philippe CHERAULT, she could not confirm his presence at the events and did not know the date the account was opened. Maître CHEMLA stated that this client had opened an account in 1991. Similarly, concerning JacQueline BALLEYDIER, Maître CHEMLA explained that she had opened her account in Switzerland in 2001.

 

Regarding the distinction between "simple" and "complex" accounts. Christine NOVACOVIC said that she had discovered these expressions in the file. She deduced that the complex accounts took into consideration the tax aspects in the way they were invested and were therefore necessarily declared.  She pointed out that this was not a distinction between declared and undeclared accounts but was based on the types of investments made. It gave the example of shares, which are simple products, and life insurance, which are more complex products. It confirmed that, as regards simple money, invested in simple products, it could be undeclared money. She said that the bank had always provided all the information needed to make the tax declaration.

 

It argued that UBS was not in a position to quantify the number of clients who had taken steps to regularise their affairs with the tax authorities. The bank did not distinguish between those clients who required documentation for their regularisation or for some other reason.

 

She said that UBS had already started to think about a system for the automatic exchange of information in 2013. She explained that UBS used certain criteria to identify clients who were not in good standing. She cites the example of the remaining bank, which could be used by a client who was not a fraudster, but for whom the bank would ask him to justify his tax situation.

 

According to Joëlle Pacteau's statements, the Swiss client profiles were very incomplete. Christine NOVACOVIC said she did not know what she meant. On questioning by the court, she stated that "everyone knew that there was tax fraud in Europe" but that the spirit of the 2005 agreement was not to "reopen everything immediately because the countries had to change the law". The court also questioned her on Joëlle Pacteau's statement that there were two kinds of clients: those who were there to benefit from financial expertise and those who were there to benefit from banking secrecy. She confirmed that some people had abused banking secrecy and that this was the reason why Switzerland had signed the agreement with the European Union. She explained that... all clients now sign a document certifying that they are tax compliant. At the request of the public prosecutor's office, she stated that this procedure was introduced in 2007.

 

Concerning the numbered account. Christine NOVACOVIC said that this type of account still exists, even if the system is a little different. She also confirmed the existence of accounts held by offshore companies. It explains that UBS has strictly applied the 2004 agreement and therefore has not levied withholding tax on accounts held by legal persons. However, contrary to what anonymous witness no. 119 argued, she denies that UBS advocated interposing structures. She explained that the accounts held by interposed structures were only 1.3%.

 

Information

None of the persons prosecuted have any record in the French criminal record.

 

According to the information obtained, UBS AG is a fully-fledged bank based in Zurich.

 

Its subsidiary, UBS SA, is also a fully-fledged bank that is not subject to any particular supervisory measures by the French or European authorities.

 

Hervé d'HALLUIN is 53 years old. He is married, lives in Mouvaux and has declared that he is a "financial director".

 

Olivier BAUDRY is of Swiss nationality and is 58 years old. Given his non-appearance during the investigation procedure, no information concerning him appears in the investigation file. Olivier BAUDRY stated that he carries out activities in Switzerland without providing any details that would allow the court to assess the exact nature of these activities. He has been employed since 2019 by the company ALKIMIA and is in charge of a portfolio of Swiss HNWI clients. He has filed his tax return for the year 2019.

 

Dieter KIEFER is 71 years old and of Swiss nationality. He claims to be retired and resident in Switzerland.

 

Philippe WICK is a Swiss national, aged 63. He says he is a "service employee" and lives in Switzerland. Given his non-appearance during the investigation procedure, no personal information concerning him could be collected.

The same observation must be made about the defendant KIEFER.

Patrick de FAYET is 66 years old. He is a French national and lives in Paris. He is married and has declared that he works as a consultant and earns an estimated income of €7,000.00. The defendant mentioned other sources of income without specifically mentioning them.

 

On the public action

 

1.         On the lack of jurisdiction

 

Considering that the nature and extent of the facts must be ratified. obiet of the judicial infonnation. because only this raooel makes it possible to define the place of commission of the facts. presumed to have been committed. as well as the applicable law: that the Court is seized of two challenges on this point the first emanating from the bank UBS SA;

Considering that four reminders of the applicable law must be made;

 

The French court has jurisdiction to deal with acts committed abroad by a foreigner if these acts appear to be indivisible from the offences also committed in France and attributable to that foreigner:

 

In the case of related acts committed in France, French law is irrelevant and the rule of reciprocity of offences is also without effect;

 

Considering, with the benefit of these reminders, that the Paris investigating court (with the additional clarification that the UBS SA bank has its headquarters in Paris) was competent, as assessed by the court, because the alleged acts of canvassing for which it is accused are, in the literal and first diachronic sense, those accused of the UBS AG bank under Swiss law. It is exposed in the documentary basis of the file and UBS SA is doubly accused as having collaborated by placing at the disposal of the parent company UBS AG its material and human resources in order to allow this bank to circumvent its prohibition on canvassing and to solicit French tax residents to open bank accounts with this bank under Swiss law with the aim (described in the proceedings as having been achieved) of evading their tax obligations in France;

 

Considering that, by way of illustration, the synergies created between de FAVET and BAUDRY and the seminars organised jointly (French and Swiss Boards of Directors) will be recalled as demonstrative factual elements, among others, of this diachronic constant which brings this case to the forefront of the proceedings dealing with indivisible facts, since the canvassing facts (in the presentation made in the file of the proceedings opened and then followed in the chambers of the designated examining magistrates) precede the procedures for opening the accounts in time and are their cause;

 

Considering in view of the scope of the case file that the competence of French justice to assess these facts is certain with regard to this subsidiary as regards the challenges to the competence of French justice as invoked by this bank;

 

Considering' the movens proposed by Raoul Weil and the rule that requires that all the facts in the referral be taken into account in order to decide on the applicable legal standard, it will be recalled that among the facts of which the defendant is accused are precisely his visits to France as a manager (the Court referring on this factual point to the section on the facts and procedure in this judgment) The Court reiterates that the merits of this accusation are irrelevant to the question of jurisdiction, especially since, as has already been stated, the facts that allow it to be stated that this defendant is, on a purely factual level, involved, are contained in the case file;

 

Considering that for this first reason, it is erroneous to maintain, as this defendant tends to want to impose, that none of the facts were committed in France;

 

Considering then, with reference to the reminders on the failure to apply the rule of reciprocity to the 'it is positive law that the acts of canvassing of which Raoul Weil is accused are indivisible, as he could, in addition to what has just been recorded with regard to the French subsidiary of those alleged to be laundering. It should be recalled that the position of the hierarchical superior of this defendant both in the bank known as the parent company and in the subsidiary: that this, through this defendant's (presumed) unity of will with regard to his two managerial functions, contributes to the competence of French justice to investigate this case in its entirety, i.e. the facts committed in France, indivisible from those committed in Switzerland;

 

Considering that for these reasons, which are complementary to those of the court, the objection of lack of jurisdiction will be rejected and the judgment confirmed on this point;

 

Considering the personal objection of the accused D'HALLUIN seeking the annulment of the order for settlement of the proceedings, on the grounds that the facts of which he is accused are undetermined and infringe his rights, as reiterated by the court and reiterated before the Court. it will be recalled that an order for settlement must satisfy the requirements of Article 184 of the Code of Criminal Procedure; that in order to assess this act, nothing should be taken away from it, and it should be analysed in its continuity: that, in fact and as the court rightly judged, the examining magistrates, after recalling the essential elements of the facts concerning the professional status and position of this defendant within the UBS SA bank in his capacity as manager of the Lille office, have, without contradiction or approximation of the necessary precision, listed the elements both incriminating and exonerating which are personal to him;

 

Considering that from the reading of this referral order it is clear that the accused d'HALLUIN had precise knowledge of what he was accused of and for which he should be prosecuted before the Criminal Court of Paris: the judgment will be confirmed on the basis of its interpretation of this exception which is not in conformity with what the reading of the said order establishes and reveals;

 

2.         On the exceptions

 

Considering that on the objections of nullity, the Court will make a distinction between, on the one hand, the persons (Messrs. WICK. KIEFER and BAUDRY, Swiss nationals residing in this country and who were absent during the investigation), and the persons represented during the investigation procedure Whereas it is common ground that the investigating judges sought to hear these three persons and were opposed by various legal arguments concluding that it was allegedly legally impossible for them to be heard under Swiss law: Considering that it was the legal reasons put forward by their Swiss lawyers that determined them not to come to France to explain themselves or, according to French law, to exercise their right to silence

 

Considering that the court found the search warrants to be proportionate and necessary and declared them inadmissible, these three persons, who were under arrest at the time of the investigation, in their requests for cancellation;

 

Considering that Article 131 of the Code of Criminal Procedure states that a person residing abroad may be the subject of a search warrant; that the criterion of residence as a reason for issuing a search warrant; that it is necessary to ensure that this warrant is necessary and appropriate;

Considering that it is common ground that these three defendants were summoned to France to be heard in accordance with French procedure; that the Court makes this clarification, which may seem superfluous but which, in view of the documents submitted, seems necessary; The Court makes this clarification, which may seem superfluous but which, in view of the documents submitted, seems necessary; the documents sent to them informed them precisely of the factual and legal framework of their hearing and of their right to be assisted by counsel; they then chose to instruct a Swiss lawyer to prepare a reply with the sole aim of justifying, from a legal point of view, their refusal to appear before the investigators and to appear on French territory;

 

Considering that the Court must recall the essential characteristics of this case in its investigation phase, according to the law applicable to the search warrant;

 

-It concerns (presumed) acts (of canvassing) committed in France and, as already stated, indivisible from those of aggravated money laundering

 

- The conversion was carried out materially in Switzerland, but it was the result of steps and contacts that were reputedly and assertedly made in France (the Court reiterating that it was at the time of the judicial investigation when the search documents were issued)

 

- these facts are the essential prerequisites for opening accounts in the books of the Swiss bank

 

Considering that this threefold specificity is the basis for the exclusive jurisdiction of French justice; that this legal norm, which derives from the law, and whose age is rightly recalled by the prosecuting authority in its writings in the file, is exclusive of the jurisdiction of Swiss justice; that in law the Swiss authorities had neither the right to regarg nor the right to infer in this procedure; that it follows that the competition with the French judicial authority by the Swiss lawyers of the Swiss authority concerning facts that did not concern them, must be reduced to the level of unfounded claims;

 

Considering that the intervention, in fact provoked by these authorities, results from a particularly contrived legal approach to the facts of the case and to the common law applicable to the facts, (the Court recalls), partly committed in France and indivisible with those committed in Switzerland;

 

Considering then, with regard to the offence of money laundering itself, that these specificities under French law must be recalled; that this offence is autonomous, liable to be prosecuted even if the original act is time-barred or does not constitute an offence in the country where it was committed; that these details are provided solely to illustrate the autonomy of this offence which is not subordinated to the law of a third country, Switzerland in the case in point, taking into account the application of French law to the facts, whose characteristics are those already included in this report;

 

Considering that the fact that the conversion incriminated under the heading of aggravated money laundering concerns funds that are the product of the offence of tax fraud falls within the competence of the French justice system, which has territorial jurisdiction as has been said, taking into account this autonomy of the offence of money laundering;

 

Considering that, in view of the written submissions, it will be recalled that requesting Swiss justice was not a legal obligation for the French investigating magistrates seized of these facts and who have the legal powers available to them under the Code of Criminal Procedure; that contrary legal opinions and points of view which tend to subordinate this jurisdictional exercise of the investigating magistrates to a third State are irrelevant; that this procedure, which borders on interference, must be considered as particularly inoperative in the course of the proceedings;

 

Considering the complaint that if these three persons had attended the summons, they would have been liable to be prosecuted in Switzerland for breach of banking secrecy, it will be recalled that

 

- any person responding to a summons to appear in court within the legal framework of judicial information has the right to remain silent statements made in response to questions asked by a judicial police officer acting in execution of a rogatory commission are covered by the secrecy of the investigation and cannot be transferred to third parties during the entire information procedure;

 

- these statements, assuming they have been made, are not intended to be communicated outside the scope of the investigation and, if they are taken up in court, benefit from the immunity attached to statements made in the French courts (Article 41 of the Act of 29 July 1881);

 

Considering then that the possibility, or even the quasi-certainty, if one follows the writings of the defence, that the Swiss justice system would prosecute in Switzerland a person heard within the legal framework of the investigation file, for the offence of violation does not appear, in the light of the information gathered from the sources of information said to be open by the Court, to be well-founded; according to its open sources, << in absolute terms this text protects the clients and not the bank; the accessible Swiss doctrine (these questions were put in the appeal debate) stating that "the private sphere of the client and not the bank is protected"; that consequently answering, if need be, questions asked by French investigators, relating to the activities of the bank that employs you does not seem to fall ineluctably, according to the meaning given to the text by the Swiss doctrine, under the Swiss law;

 

Considering that with regard to this offence which would be committed abroad because it was committed in France and prosecuted in Switzerland, the Swiss Federal Court on 21 January 2019 ruled that the violation of Swiss banking secrecy committed abroad by a Swiss person is not subject to Swiss jurisdiction if the act is not punishable in the country of origin; that this decision, which has been included in the appeal debate, confirms that the quasi-inevitable nature of a conviction for a Swiss national who complies with the above-mentioned summons is not a matter of positive law;

 

Considering that the Court must refer to these points of Swiss special criminal law because it has been presented as a given that any Swiss bank employee was prevented, on pain of prosecution, from testifying or even speaking out about the practices of the bank employing him; that it is clear from these brief reminders of doctrine and case law that this secrecy cannot be pursued automatically simply because a person chooses to respond to the requests of a legitimate authority, which is the case of investigators, in the confidentiality of the hearing requested under Article 81 of the Code of Criminal Procedure;

 

Considering that if in France the violation of banking secrecy is liable to prosecution (the Court specifying that banking secrecy protects in French criminal law more the clients than the bank itself), a prosecution should be reconciled with the right of the person prosecuted to defend himself, by answering the questions of the investigators and then satisfy the control of proportionality between, on the one hand, the interests of the clients (assuming they are named and identifiable) of the Swiss bank to remain unmentioned and that of any person to exercise the rights attached to the status of person prosecuted

 

Considering that in France, the prerequisite of a prosecution in France, which follows from the above-mentioned judgment of the Federal Court, any prosecution must be reconciled with the necessary respect for the rights of any person heard as a "suspect" to exercise his right to defend himself and satisfy the above-mentioned proportionality control;

 

Considering that these developments and clarifications show that these alleged legal defences that the three defendants put forward as a justification for their failure to appear must be analysed as an attempt, in vain on the chosen legal ground, to conceal the real reason for their failure to appear; that is, to evade the legitimate questions, legally permitted, of the investigating judges, who had specially appointed investigators for this purpose;

 

Considering the alleged impossibility for French justice to send summonses to Swiss nationals, the court ruled that no reservation had been made with regard to Article 16 of the Second Additional Protocol; it is further stated that when a case is regularly referred to the French judges, they have, under the control of the Investigating Chamber (which, moreover, has never been referred to them by anyone else in this case), the right to choose the way in which they wish to summon the persons they wish to hear;

 

Considering that the court has moreover accurately pronounced on the necessary nature of the facts (presumed illegal canvassing with the complicity of the French subsidiary with a view to opening bank accounts in the books of the parent company under Swiss law, with total assets estimated at more than eight billion euros), it was rightly held that these three individuals, under cover of subterfuges with a legal pretence, did not in fact have any intention of presenting themselves; that, since the arrest warrants were in order, the court was justified in ruling that their applications to have the procedure declared null and void were inadmissible; that the judgment referred to will therefore be confirmed as regards the inadmissibility of the applications for annulment raised by AUBRY, WICK and KIEFER;

 

Considering, with regard to the objections raised by the defendants who took part in the information, that it will be ruled:-

 

- With regard to the applications of the respondent Raoul WEIL, this defendant raised a single objection, namely that French justice lacked jurisdiction, on the basis of which the Court has already ruled;

 

- With regard to the claims of UBS SA, it should be noted that, for the first time in the appeal case, this legal entity is arguing that the documents handed over to the investigators by the witness GIBAUD are null and void because these communications were obtained in an illegal and unfair manner;

 

Considering that it is constant that, as the bank under investigation, UBS SA had the right to submit any request for cancellation during the judicial investigation; that it will be recalled that, as one of the first persons to be heard, (cf. Exhibits D46, 55 and 57 in particular), this witness handed over to the investigators the documents, the cancellation of which is now being requested; that it must be recalled that Article 385 of the Code of Criminal Procedure is a time bar;

 

Considering that in order not to incur the grievance of the inadmissibility of a request for a new part in the cause of appeal and never previously invoked during the information procedure, the applicant for annulment invokes a new fact which would be constituted by the fact that the administrative court, in a judgment of 15 November 2018, has recognised the status of occasional collaborator to Mrs. GIBAUD for her "joint work with the investigators of the Judicial Customs" (see conclusions on page 7);

Considering that this alleged new fact constituted by this judgment has no effect or impact on the fact that the documents claimed to have been obtained illegally have been included in the proceedings since the preliminary investigation stage; that this communication or handing over of documents could, if necessary, be considered null and void, the fact that a court of a different legal order assessed the status of this witness in terms of administrative law being without direct connection with this handing over;

 

Considering that this judgment of 15 November 2018 is unrelated to the handing over of documents to the investigators seized; qualifying "a job" and indeed unrelated to the handing over without constraint of documents to investigators acting within the framework of the code of criminal procedure governing the preliminary investigation;

 

Considering that it is consequently judged that in the absence of being able to recognise the character of the aforementioned judgment of the administrative court as a new element, since it is in fact an element that is completely external to the dispute over the annulment of the acts of a criminal procedure, this exception of nullity will be declared inadmissible, as was said for the first time in the case of appeal;

 

Considering that three objections relating to inadmissibility were also presented in limine litis, two of which were raised by UBS AG and the third by UBS Bank, as well as the objection of prescription, an objection that is relevant to the merits;

 

Considering that the exceptions of inadmissibility of elements of proof being attached to the evidentiary field, they will be examined with the merits of the case; the Court considering, on the contrary, that it is necessary to pronounce on the exception, invoked by UBS AG, relating to the qualification;

 

Considering on this exception that it is argued that "the public action is inadmissible" on the grounds that the facts should have been the subject of an "appropriate reclassification"; that consequently, "the prosecution which applies against UBS SA the qualification of complicity in tax fraud instead of the qualification of complicity

of tax fraud" whereas "the first qualification" applied to the alleged facts for which UBS SA was prosecuted";

 

Considering that it is concluded that "it is by a deliberate choice of the prosecution that this contact is presented as aiding and abetting the recycling of a tax fraud that did not take place, rather than being prosecuted as aiding and abetting a tax fraud that has yet to be committed";

Considering that the conclusion drawn from this is as follows: the inadmissibility of the public action for failure to file the complaint by the tax authorities;

 

Considering that this exception concerns the conditions for the initiation of public action by the aforementioned introductory indictment, the plaintiff for admission of the exception denouncing the "opportunism of the public prosecutor" and consequently the very basis of the public action that was initiated by the introductory indictment; that it is incumbent upon the court to rule;

 

Considering that it must be recalled that only the investigating court is competent, under the control of the investigating chamber, to qualify the facts referred to it by the opening statement and the supplementary statements of claim, if any, requested; that in fact the public prosecutor, in his or her jurisdictional exercise, must accurately qualify the facts, but this qualification is not imposed on the investigating judge or the parties, who remain entitled to raise any dispute on this point that they consider useful for the defence of their interests;

 

Considering that it is consequently incorrect to focus an argument tending to the inadmissibility of the public action on the act of referral to the examining magistrates because this inadmissibility, which did not give rise to any challenge before the appeal court, according to the observation of the Court, would in any event concern the referral order, a conclusive act, also not challenged on this precise point;

 

Considering then that the terms of the prosecution, which must in any event be assessed by the so-called trial judge, the one whose function is to judge whether the facts referred to him are accurately qualified and liable to be classified as criminal, must be in keeping with the nature and extent in time and space of the facts referred to;

 

Considering that the court was justified in judging that "the facts revealed and reproached to the two banks (UBS SA being prosecuted as an accomplice) are operations that consist in the placement of funds resulting from tax fraud on accounts located in Switzerland and then their management by means of procedures or devices intended to conceal, place or knowingly convert the said undeclared funds"; The court went on to state that "these facts go well beyond" the field of complicity in tax fraud "in that they concern downstream actions involving complex arrangements and stratagems intended to manage the direct or indirect proceeds of tax fraud";

 

Considering that the court, following the investigating court, having accurately qualified the facts which are the subject of the file submitted to its appreciation and the prosecuting authority having not disregarded any procedural provision of public order in the exercise of its jurisdictional powers, the objection, taken up before the Court, will be rejected by adopting the above-mentioned reasoning of the court with the conclusive observation that the facts as the plaintiff tends to impose them on the objection, are devoid of their essential characteristics and by recourse to the process of omission, omit, (in the presentation made of them), the (presumed) participation of UBS SA in the commission of the offence of aggravated money laundering, for which its parent company, the Swiss bank, is blamed; that the judgement will consequently be confirmed on the rejection of this objection;

 

3.         On guilt

 

Considering that the developments that follow are based on the factual and testimonial elements as well as the points of view and technical and legal analyses recorded under the heading "Recall of the facts and the procedure" in this judgment: it is specified that the reasoning of the judgment is based on the events detailed in this heading of the judgment;

 

Considering, however, that before examining the characterisation of the proceedings, the objection of prescription, which is a matter of public policy, must be examined; that this objection is taken up again before the Court after its rejection by the court;

 

.  Considering that it is noted that the first interruptive act is the transmission of March 1, 2011 and that the aggravated laundering of tax fraud appeared in the referral document in that it was originally denounced by the ACP authority as "a system of tax evasion from France to Switzerland conceived by the UBS AG bank with the complicity of its subsidiary: any assertion to the contrary on this point being denied from the stage of reading the acts of the preliminary investigation and the alert; that in fact transferring from France to a Swiss banking establishment funds remitted by French tax residents includes the fact that the bank which receives the funds in accordance with the usual banking practices. In this regard, the Court of Cassation has held that the bank which receives the funds in accordance with normal banking practice will not be satisfied with a deposit of the funds, as this would be contrary to its interests, which require, to use a colloquial expression (which was also used before the Court), that the money works;

 

Considering that it will be noted that the prescription regularly interrupted with regard to an offence also interrupts the prescription with regard to the offences which are related to it, if these are not themselves prescribed;

 

Considering secondly that when, as in the case in point, the (alleged) acts of canvassing and money laundering are part of a complex fraud and have extended over an extended period of time without discontinuity, the statute of limitations only begins to run from the last act of canvassing or money laundering;

 

Considering that these characteristics of the facts as assessed by the court (independently of whether the offences were characterised in all their elements) have consequences for the assessment of the validity of the exception: the Court recalls that only factually substantiated presumptions are sufficient to interrupt the statute of limitations: or' reference is made to the descriptions of the fraud schemes detailed in the section "reminder of the facts and procedure" of this judgment which establishes without contesting this complex fraud character of the facts under investigation;

 

Considering in any case that the money laundering activities denounced being for the last one presumed to have been committed during the year 2012 and that as regards canvassing it is dated June 2011, the statute of limitations was not necessarily acquired on 1 March 2011;

 

Considering then that the notion of indivisibility retained by the court was in accordance with its exact assessment. induced by the documents in the file that the "laundering of funds linked to tax fraud is directly dependent on the presumed illicit prior suspicion of French tax residents": it is true, (the Court referring on this point to the judgment on pages 63 and 64). that

"These facts are in such a state of dependence that the existence of one cannot be understood without the existence of the others: money laundering appears to be the logical and necessary consequence of the acts of canvassing";

 

Considering that the plaintiffs for the admission of the exception. concealing in their writings these points of the file or only proposing a segmented version which does not take into account this indivisibility, the judgment will consequently be confirmed on the rejection of this exception;

 

Considering that the guilt and the determination of the constituent elements of the offences prosecuted will be examined separately for the two main offences prosecuted: illegal canvassing and then the acts of aggravated money laundering;

 

Considering that it is clear from the evidence in the case file, and specifically from the evidence relating to the commercial, management and administrative relations of the two banks being prosecuted, that it cannot be disputed that UBS AG was not authorised to carry out the activity of direct marketing of banking and financial services on French territory;

 

Considering that it had a subsidiary under French law, UBS SA, created in 1999, which was authorised to canvass on French territory according to Article L.341-1 of the Monetary and Financial Code;

 

Considering that a first observation is necessary: the French subsidiary was economically dependent on the parent company, both in terms of management and administration and management; that the elements set out below establish this;

 

Considering' that the management of the subsidiary for the time of the prevention. which began in 2004. that extracts from the statements of one of the defendants must be quoted. who cannot be suspected of collusion with the prosecution. Hervé d'HALLUIN: he stated that after the mandate (completed in 2004) of de MONTESQUIOU, described as a "lazy prince", "UBS Switzerland appointed Pierre POYET (because) de Montesauiou's lack of cooperation with the subsidiary had been extended to him by the parent company, who had to "maximise the synergies with Switzerland": this new manager was described by d'HALLUIN as a "puppet of UBS AG";

 

Considering that under the next manager, d'HALLUIN continued, named CASTELLO. UBS AG 'put intense pressure' on the French teams to create synergy by requiring its Board of Directors to make friends with the Board of Directors of UBS SA: in execution of the instructions, he (d'HALLUIN) had recruited two or three Board of Directors 'stamped CoA' (the name of the programme implemented for all the countries of Western Europe);

 

Considering that it is understood from these statements, which come from an executive of the subsidiary, that the subordination link of the manager of the subsidiary to the parent company was not prohibited by company law, but in relation to the facts in the file, tends to support the concept that from 2004 onwards, the parent company acted directly on management and prospecting practices via these two managers successively appointed in this way;

 

Considering secondly that the relations established by the Swiss establishment with UBS SA were not limited to the establishment and development of simple commercial synergies: that in fact these relations actually placed the subsidiary at the service of its parent company in order to participate, according to the documentation communicated, in the growth of the net banking income of UBS AG;

 

Considering that it should be recalled on this point that, from the time the subsidiary was registered, it benefited for years from financial assistance from the parent company to ensure its operation;

 

Considering that although the directors, and in particular the current corporate officer De LEUSSE, have attested to the subsidiary's sound financial situation and the accounting control of its management and administration, it remains that during the prevention period, the subsidiary could only maintain itself as a banking establishment in Paris with the financial assistance of the parent company;

Considering, with regard to "synergies", that at the level of internal management, it is established by the file that Raoul WEIL and Olivier BAUDRY, an executive of UBS AG, organised training for French business managers, as demonstrated by an exchange of emails between Olivier BAUDRY and the directors of European subsidiaries, including Patrick de FAYET: that under the terms of these exchanges Olivier Baudry transfers an email from Franck NIEDERMANN, the bank's director, who writes (the court quotes this email written in English): "Dear ail. Market Development and re1Jresentatives (rom ail ori1dnation units have developed a powerful new Sales Training that is especially designed to create the unique UBS -client evidence. In a first phase Raul Weil proposed to nominate 300 to1J performing Client Advisors for this course."; that Olivier BAUDRY. in the same -email. writes to Miguel IRISARRI. Patrick de FAYET. Paal SYVERSEN. Roger HEREN and Daniel LIPP: "Dear Colleagues. What I need from you by MONDAY is to fil[ the join spreadheet with the name of your best CA you want to achieve this seminar first (ail the CA will follow it but next year). Send me the name in front of each location for the date before year end. Miguel already send me he don't need sit before year end and he will use the newt year session in madrid (more efficient) that's ok for me. Perhaps Mi1ZUel it's just necessary that you follow one of the session in switzerland before year end. Probably the same approach can apply to Patrick. Give me answer and I will arbitrate before the different market/sellment the best I can"; that Patrick de FAVET replies "always the same story Thank you Patrick;

 

Considering that the meaning of this e-mail is as follows: the parent company, via the two defendants WEIL and BAUDRY, was setting the conditions for the training of business managers: that the reply given by De FAYET has the precise meaning that he is complying and that it is "always the same story"; that this means that, according to the interlocutor of the parent company De FAYET, these events have already occurred;

 

Considering that, unless it is confirmed that De FAVET does not master its written expression, it reveals or confirms the control of the parent company and consequently that the subsidiary did not have control over the training of its personnel;

 

Considering that it is recalled by the court that this training concerns the heart of the case in the sense that the business managers or client advisors known as CA were responsible for canvassing;

 

Considering that it must then be noted the situation of Caroline DURET in the file submitted to the court's appreciation: that it corroborates the subsidiary's lack of independence vis-à-vis its Swiss parent company; that in fact. Caroline Duret has always been an employee of UBS SA since 2001; that she worked in the SEG. SDort Entertainment Grou1J before being attached, following an audit in 2004, to the HNW2 segment of UBS SA directed by Anne LONGIN GUYOT; that according to Jean-Louis de MONTESQUIOU, president of the subsidiary from 2001 to 2004. Caroline DURET "reported directly to KIEFER. She was there, at a time of some confusion. We didn't manage to fire her. I wanted her to be based in Switzerland. I didn't know what she was doing. (... ). Her bonuses were not decided by UBS France. She was one of the people over whom I had no control;

 

Considering, with regard to the testimony of this manager (Mr De Montesquiou), that it is stated by the court that he gave a precise description of the functioning of the company he was in charge of managing at a time prior to the prosecution: that no precise element of refutation of this testimony has been provided or appears in the file: that it follows that the statements of this corporate officer are of particular importance to the court in reconstructing the facts that are the subject of the present case; that, in fact, he characterises an operation that escaped him, particularly through the case of Mrs DURET at a time that he described as 'troubled';

 

Considering still with regard to Caroline DURET that in an email dated 26 January 2005. Philippe DACOUIN, assigned to human resources at UBS AG, wrote to Béatrice LORIN-GUERIN: 'PhiliTme Wick will communicate to Caroline Duret and Sandrine Marsouin their bonuses and salaries this afternoon while in Paris: That it is clear that Caroline Duret continued her activities after 2004 under the theoretical authority of Pierre Povet but in reality under that of Philippe Wick, an executive of UBS AG, the defendant in this case;

 

Considering that it is clear from this correspondence that the expenses of the SEG sector were paid by Philippe WICK, as evidenced by another exchange of e-mails before the obiet "Re-invoicing of C. Duret" between Philippe WICK and Ludovic CHIMENES, accountant of UBS SA;

 

Considering that, in addition, a UBS AG document states that its fine manager is Philippe WICK;

 

Considering that the audit report of 1 October 2004 indicates (the court quotes the exact word) :

 

"Tele-ohonium meeting N. Forissier (Head of Audit Interne France) - D. Kiefer (Chairman of the Supervisory Board UBSF) at 08hl5. The Chairman of the UBSF Supervisory Board informs the Head of Internal Audit France that Mrs Duret (Head of Audit SEG France) has complained about the Audit on Audit SEG France to her business line and to her manager (Philippe Wick). The Chairman of the Supervisory Board drew the attention of Internal Audit to the precautions to be taken with regard to Mrs. Duret and, above all, to protect the Group's interests in this matter. Internal Audit France has questions about this intervention;

 

Considering the testimony of FORISSIER. Which is unanimously described by the defence of the defendants as coming from a person devoid of any scruples and having little to do with the honesty required of any individual. That at the time. 2004. Nicolas FORISSIER had no dispute with his employer: that if FORISSIER was later identified as one of the authors of the letters sent to the French control body, the fact remains that the above-mentioned document must be analysed as reflecting, from his point of view as head of the subsidiary's internal audit, the reality of the functioning of the subsidiary, which had to 'above all see the interests of the group in this case';

 

Considering that during the interrogation. Patrick de FAYET, for his part, confirmed that Caroline DURET "paid part of her expenses directly to WICK, and perhaps even her salary. This system lasted until 2005, I believe. She stayed on afterwards but we put everything back in order";

 

Considering that, contrary to what UBS SA states in its conclusions, namely that the "difficulties posed by the organisational weaknesses of the SEG department headed by Mrs Caroline DURET were corrected immediately after they were highlighted by the Internal Audit", Caroline DURET was subordinate to Philippe WICK after the audit, although Anne LONGIN-GUYOT officially appeared as her manager from 2005 onwards

 

Considering that the audit department had above all to "take precautions" with regard to Caroline DURET; that this is the meaning of these minutes;

 

Considering moreover that Caroline DURET declared that she had "a double relationship with UBS France and the SEG in Switzerland" and that her hierarchical superiors were both employees of UBS AG (such as Philippe WICK) and of UBS SA (such as Patrick de FAYET);

 

Considering that. for its part. Anne LONGIN-GUYOT stated: 'Caroline DURET had an ooac,ue activity. Nicolas FOR/SS/ER, with whom I got on well at school, put me in touch with his activity and directed me to certain questions, they questioned me about certain expense accounts. (...) I tried to get her to attend water meetings. I made sure that the base was well taken care of. When it did not respond to my requests, I questioned Pierre POYET. I did everything I could to put things in order, but it wasn't easy;

 

Considering that, when asked whether she had registered any business with Switzerland for Caroline DURET Anne LONGIN-GUYOT declared:

 

"I have absolutely no recollection of this. I think it must have been before 2005 because I went to Corea at the beginning of the year and she was more independent. If there was any in 2005, it must have been Philippe WICK or Patrick de FAYET who managed it;

 

Considering that, contrary to what Beatrice Lorin-Guerin indicated at the hearing, this dependence of the subsidiary on its parent company is further illustrated by the fact that the latter, in its capacity as Director of Human Resources, requested the agreement of Dieter Wick, who was in charge of the company. This dependence of the subsidiary on its parent company is further illustrated by the fact that the latter, in her capacity as Director of Human Resources, sought the agreement of Dieter KIEFER and Raoul WEIL in order to decide on requests for salary increases for UBS SA's business managers, as evidenced by an exchange of emails from June 2005 in which Béatrice LORIN-GUERIN wrote to Agata FAVRE. Pierre POYET and Patrick de FAYET are in the same email: "Af!ata, You will find herewith 3 requests for salary increases for 3 UBS France CAs (apart from that of David Guermond, which has been approved).

 

-The cases of Florence Gastaldi and Carine Mondino have already been discussed between Dieter and Omar Berkouk during his TJassaf!e in Cannes. The last case is that of VirJ!inie Lemesle, CA W1\f 3 particularly verformant. We have discarded 3 other applications. Thank you in advance for your feedback. Béatrice"; to AI!ata FAVRE replied: "Goodbye to you three. Ok from Dieter and me TJour these three requests. They are following their courses at Raoul Weil and I will give you feedback as soon as I receive them. Have a nice day, Agata";

 

Considering that on the issue of staff remuneration the branch was to refer to the matter for simple salary increases; that this is the finding of this exchange;

 

Considering moreover that it emerges from other e-mail exchanges that the court mentions in the first part of the judgment and which are included in the case file, that Raoul WEIL, Dieter KIEFER and Francesco MORRA, executives of the parent company, were interested in the litigation of UBS SA against one of its employees, Anna BARRY; that Francesco MORRA wrote that he was going to take stock of the situation with Raoul WEIL on Monday next That contrary to what he has always maintained, Raoul WEIL followed the files and at least one of the disputes relating to the French subsidiary as well as the figures of its operation that Dieter KIEFER communicated to him;

 

Considering that the court must recall that Patrick de FAYET acknowledged obeying instructions from the Swiss parent company: he declared in police custody:

 

"I, at the request of UBS Switzerland, had to verify the reality of the operations mentioned or appearing in the milk books;

 

Considering that the subordination of the subsidiary to its Swiss parent company is also evidenced by the fact that UBS AG gave directives that were immediately applied by its subsidiary: it appears from several documents in the file that the "group" thus asked its French subsidiary to transfer accounts opened in its books by American residents to Switzerland: in fact, the documents transmitted by UBS AG to its French subsidiary, which was not a Swiss subsidiary, did not contain any information on the accounts opened in Switzerland. The documents transmitted by UBS SA to certify certain ATAs indicate that "these clients were transferred between January and June 2008 in accordance with the directive": in an email dated 4 July 2008. Hugues RENARD writes to Gérald MATHIEU and Bruno CELLIER "it is intended that there is an outflow on American accounts that the group asks us to close";

 

Considering that it appears from these elements, which are not denied in factual terms, that the French subsidiary obeyed the directives of its parent company, which had imposed the transfer of certain accounts to Switzerland;

 

Considering that most of the remuneration of the company directors, including in particular Messrs de Montesquiou and Poyet, who were successive chairmen of UBS SA from 2001 to 2007, was paid by UBS AG in the amount of 80% in 2004. In 2007, UBS SA's salaries, expenses, bonuses and allowances were re-invoiced to UBS AG: this invoicing by the French subsidiary to the Swiss parent company also concerned UBS SA employees seconded to Switzerland, including Messrs BELIS. DESPLANOUES. DEFARGE. SCHÜTZE and Mme JOURDE: that the latter, although employees of UBS SA, were in fact working for UBS AG;

 

Considering that UBS SA still invoiced numerous expenses to UBS AG such as workstation installations, mobile telephony, use of videoconference equipment and maintenance of applications linked to private banking: according to the information communicated by UBS SA, these re-invoiced amounts amounted to €532,710 for 2009;

 

Considering that this subordination of the French subsidiary to the parent company in the determination of its objectives, its management and its administration was not contested by the accused De FAYET.

Considering that Patrick de FAYET declared in police custody :

 

"Question: Can it be said that UBS France was truly autonomous in relation to UBS AG?

 

Answer: No, from the organisation we have already mentioned. From 1) /us the successive chairmen of the supervisory board were mostly based in Switzerland.

 

Question: Omar BERKOUK stated during his audit: "The national branches such as France or Esoaene are under the supervision of UBS AG in SWITZERLAND" (quote DJ00/2). What do you think?

Answer: I agree, it corroborates what I have already told you.

 

Considering that a branch manager, who was not prosecuted, confirmed this point in De FAYET's statements;

 

Considering that Omar BERKOUK confirmed during his hearing that "UBS France was under the supervision of UBS AG, a wholly-owned subsidiary, and as such" and "while I was discussing the excesses of the bank with Pierre Povet, the latter told me that he was only a mere civil servant in the service of the Swiss headquarters"; that this testimony was not specifically refuted according to the observation of the Court;

 

Considering that at this stage, four members of the subsidiary, the manager of MONTESQUIOU, the heads of the BERKOUK and HALLUIN branches who, in the above-mentioned circumstances, have, if not admitted, at least conceded that UBS SA was only the front in France for the Swiss parent company;

 

Considering that this subordination of the subsidiary to its parent company is further corroborated by numerous testimonies of former employees of UBS SA. not all of them have had disputes with the latter: cm'en-effet. Anne Longin Guyot, head of the Core Affluent segment at UBS SA from 2005 to 2008, head of market development from 2008 to 2010 and again head of the Core Affluent segment from 2010, described Olivier Baudry's intervention at a meeting in Paris in 2004 attended by the Desk Heads and heads of segments. She described Olivier Baudry's speech at a 2004 meeting in Paris of Desk Heads and segment managers as "a demonstration (...) of why we were not working together enough and how to work well together": she went on to say that "the French reproached the Swiss a lot for hunting on our land. They did not take it very well, they did not deny it. They wanted us to get to know each other better. The Swiss wanted more cooperation from us: relocations, opening of declared or undeclared accounts, etc. I wasn't particularly happy about this. I wasn't particularly happy to see them, but we had to;

 

Considering that Sylvie JETZER confirmed that in 2007 or 2008, she had attended a meeting in Paris with many Swiss business managers during which it was question of energy: that Swiss business managers were offered to work in France and vice versa;

 

Considering that these two testimonies converge with each other and with regard to the events reported, which state that "the Swiss are hunting on our land", no factual element to the contrary, which would contradict them, appears in the file of the proceedings;

 

Considering. That with regard to the persons who have had disputes with their employer UBS SA, the court, in view of the debates, records the following observations in the judgment:

 

- The fact that people have initiated proceedings against UBS SA does not discredit their statements because it has never been demonstrated that their grievances, complaints and recriminations against their employer are slanderous in the sense of French criminal law;

 

- that the fact of having sometimes been dismissed from legal proceedings or of having, like one of the persons heard, made claims for compensation before the administrative judge, should not be analysed as invalidating from the outset the content of what they may have declared elsewhere;

 

- that the court must recall that it is the practice observed by judges ruling on criminal matters that persons who initiate litigation simply consider themselves released from their subordination link or their obligation of confidentiality or duty of reserve and may reveal to third parties facts that are likely to prove prejudicial to their former employer;

 

that the practices of 'whistleblowers' will be mentioned, which are certainly the subject of challenges that were only codified in France on 9 December 2016 and are not transposable to the species. in order to recall the development of whistleblowing, sometimes made public, by members of the staff of companies who feel that they must denounce the practices contrary to the law that they say they have observed or experienced;

 

- that the correlation between the accusatory testimonies in the case file and the profit motive or the illegality of the behaviour of their authors, which the defence lawyers tend to portray as the sole cause of their formulation, is not accepted by the Court, since it cannot be excluded that these persons were motivated by intentions similar to those of the whistleblowers;

 

- that, in the final analysis, in the light of the standards of the current criminal procedure, it is incumbent on the court to ask itself a single question: do these testimonies relate elements or facts which have or have not been verified, corroborated or proven? these elements of verification must be submitted, as in the present case, to the adversarial debate;

 

Considering that, at this stage of the examination of the file, the court notes that the testimony of GIBAUD is at best an account of personal feelings and has not brought to the knowledge of the judicial authority precise factual elements in evidential terms; that no other reference will be made to the testimony of this person; that this person made accusatory statements which either could not be verified in their effectiveness or did not go beyond the stage of value judgements; that it will be stated that his position within the subsidiary, although it enabled him to know what was happening in the events, did not give him access to the internal functioning of the subsidiary;

 

Considering that this witness is the only one in this case; the other employees such as Serge HUSS or Nicolas FORISSIER (these two names are only cited here as examples), having given reasoned statements and sometimes supported by a factual or indexical basis confirming the remarks, with an accusatory tone, made, because they were assigned to positions within the company that allowed them to know the operating methods of their employer, particularly with regard to the parent company;

 

Considering that there is therefore no reason in law that should determine the court not to integrate the testimonies of other former employees or managers of the company, that Mrs. GIBAUD ;

 

Considering on this point that Olivier FORGUES explained that "UBS France used to hold meetings to reflect on the optimisation of the transactions between CorA France and Chia Suisse (clients of movenne J!amme, i.e. between 250,000 and 5 million euros)": that he had witnessed practices as early as 2005 that he considered contrary to the professional ethics of the banking sector: that he exoliaued that when the Swiss business managers went to Paris. Anne Longin Glnot instructed him to take charge of them and organise outings using his professional bank card ("to buddy up" with them): that this rapprochement between Swiss and French business representatives was intended to exchange clients: that this Swiss initiative in the promotion of this energy is confirmed by Serge HUSS who specifies that the French chargés d'affaires were directly incited, by means of seminars, to share with the Swiss chargés d'affaires: that this incitement was materialised. In 2005 and 2006, Olivier BAUDRY, then in charge of HNW Switzerland for French clients, attended the Paris Desk Head meeting every two months;

 

Considering that Serge HUSS also explained that "our Swiss counterparts encouraged us to collaborate actively by proposing exchanges of information for more effective prospecting";

Considering that it is clear from the file that these two testimonies are not contradicted by the elements of the procedure submitted to the court's appreciation; that in fact, in an exchange of emails dated 30 August 2004 with the subject of "Franco-Swiss exchange", Bruno CELLIER wrote: "Within the framework of Franco-Swiss exchanges and the rapprochement of the teams, we have fixed a meeting in Zurich on 21 and 22 October next between the CAs of HNW3 Paris and the team of the French desk in Zurich. Please note this meeting in your diaries"; that Patrick de FAYET transfers this e-mail to Hugues RENARD and Frédéric PRAZ, writing "To be included in the follow-up of the Swiss collaboration";

 

Considering that it also emerges from a power point distributed on 9 July 2007 in Geneva entitled "Western Europe Revenue Sharing & ATA Correction Rules" that an ATA

Considering that a power point distributed on 9 July 2007 in Geneva entitled "Western Europe Revenue Sharing & ATA Correction Rules" also states that an ATA "referral" is set up in the event of collaboration between two chargés d'affaires from two different countries;

 

Considering that the defendant de FAYET was invited to the "France International Management Committee (FMC) of 20 June 2008 and that it appears from the agenda that he was in charge of presenting the "domestic collaboration" including a "discussion on referrals" and "Cross-Border activities";

 

Considering that in an e-mail dated 22 February 2008 that Olivier BAUDRY sent to Patrick de FAYET, he indicated: "I confirmed to your secretary that I would be coming to your meeting in March, it is now my turn to invite you to my management meeting";

 

Considering that, for her part, Anne Longin-Guyot declared: "Gabriel Castello asked that we work in synergy when he arrived at CoreA. N wanted me to exchange with Daniel LIPP to recover their good practices and exchange clients in compliance with the regulations";

 

Considering that Patrick de FAYET declared in custody concerning Dieter KIEFER "he recruited me. He was the boss of WICK and France Domestic;

 

Considering that for the court, these successive declarations and writings by de FAYET, on the basis of which no serious element of refutation has been presented, reveal, beyond the energy that has already been characterised, the predominance of the management of the parent company over the practices of the subsidiary, and more particularly with regard to canvassing;

 

Considering that the file highlights the "structural synergies" between UBS SA and UBS AG through the two positions held by Dieter KIEFER, that of head of Wealth Management Western Europe (France, Spain and Monaco) and that of chairman of the supervisory board of UBS AG. This was confirmed by Jean-Frédéric de LEUSSE and the other management executives of the parent company, including Dieter KIEFER himself: the same applies to the two positions held by Raoul WEIL, both within the subsidiary and the parent company;

 

Considering that the judicial information has demonstrated a verticality in these synergies desired by the Swiss hierarchy: Omar BERKOUK declared: "And it must be understood that in this system, most often, the French business manager

 

-In this system, the French chargé d'affaires did not carry out any operations, but only transmitted information to the Swiss chargé d'affaires. Everything else was handled by Switzerland and for the French chargé d'affaire this materialised in the recognition of his information in the milk book, thus contributing to the achievement of his annual objectives";.

 

Considering that Serge HUSS, who won his case before the labour court of first instance, stated during his hearing: "Our mission was to propose French products, but it was not always easy. A client was interested in buying products in Switzerland. We would make recommendations so that a Swiss CA would get in touch with a French client. I sometimes said to a client: "I don't understand this language, but I can put you in touch with a person who speaks your language";

 

Considering that the role of the French chargé d'affaires, according to Omar BERKOUK, was to identify people likely to need the services of the "offshore"; that he stated: "In France, our mandate was to know all the potential clients for wealth management. When, in this process, someone spotted a person likely to need the services of the "off-shore", that is to say those who are not allowed to canvass in France, such as the SWISS account managers. These operations did not have to be declared to the tax authorities. It was requested by the ZURICH Directorate General to develop a cooperation based more on information.

 

Considering that an internal document of UBS SA, entitled "Minutes of the meeting of 21 July", shows that Jürg ZELTNER told the employees of UBS SA: "Offshore is and remains our business";

 

Considering that this documentation cited by the court as an example is revealing of the oratiaues of the parent company and its subsidiary and has legal consequences;

 

Considering that it is clear from the investigation file and from the evidence transmitted by UBS SA. debated in the presence of both parties that UBS AG did in fact canvass the prospects or clients of its French subsidiary, either through the intermediary of the latter's employees or by removing its employees from French territory with the prior agreement of its subsidiary and of Patrick de FAYET, whose statements, on this point, are edifying, have been incorporated into this report;

 

Considering, with the benefit of this double observation, that it is incumbent to verify the consistency or effectiveness of the acts of canvassing attributable to the employees of the subsidiary on behalf of the parent company UBS AG, in respect of which, the court recalls, it has been established that at the time of the prevention, it exercised almost total financial and managerial control over its subsidiary;

 

Considering in fact that the salaried account managers of UBS France SA devoted some of their working time to prospecting on behalf of UBS AG;

 

Considering that the salaried account managers of UBS SA were mobilised to recruit a new French clientele and contribute to the transfer of funds and securities from France to Switzerland;

 

Considering that it is appropriate to examine the "ATA" system institutionalised by the parent company UBS AG, which encouraged employees of UBS SA to canvass on behalf of the Swiss parent company;

 

Considering that the ATAs, according to the expression commonly used by the defendants and their defenders, fell into two categories; that they could concern, on the one hand, a transaction for the transfer of assets - partial or total - by a client from one UBS office to another office of the group, and thus giving rise to a transfer ATA, and on the other hand, the entry into a client relationship of a prospect followed by the account manager of another company of the group, and giving rise to a "referral ATA;

 

Considering that UBS Finance SA states in its written submissions that in the case of a referral ATA, the two account managers concerned could agree that one of them would benefit from 100% on the basis of the work done;

 

Considering that the ATAs recognised by UBS AG to its subsidiary UBS France SA during the prevention period are 103 in number, of which 56 are identified by UBS SA as referral ATAs;

 

Considering that this part of the activity of the French chargés d'affaires was taken into account in the calculation of their bonus;

 

Considering that a person outside the present criminal case, the judicial administrator of UBS SA, in his letter to the examining magistrates of 30 November 2013, indicates that the referral ATAs traced 'the registration of a client to a structure located abroad, thanks to the diligence of a UBSF business manager, but who is not a client of UBSF';

 

Considering that in an email dated 5 October 2005, Olivier FORGUES wrote to Anne LONGIN-GUYOT about one of his clients whom he convinced to open an account with UBS AG: "At the time of the bet, our agreement-relations with Switzerland did not exist and this idea of introducing him to Switzerland came to me spontaneously ...."; that it can be deduced from this email that the agreements in question encouraged the French CROs to introduce Swiss CROs to their clients;

 

Considering that the ACP, which initiated the present proceedings, in its decision of 25 June 2013, summarised the ATA mechanism as follows: "To strengthen the incentive for each commercial agent (client advisor or CA) to detect new clients or to convince existing clients to entrust new funds to the management of the Net New Money. a system for recording 'business recognition', known as ATA (Asset Transfer Agreement), which measures the personal contributions of each person to the development of the NNM, irrespective of the entity actually collecting the NNM, and therefore increases the variable remuneration rights of the 'applicant' CA, while systematically reducing those of the 'recipient' CA";

 

Considering that it follows from the foregoing that the ATA mechanism was intended to take into account and reward UBS SA's salaried account managers thanks to whom prospects became clients of UBS AG or of another UBS entity located abroad;

 

Considering that Omar BERKOUK, during his hearing, stated: "an prospect is someone who is not yet a client. A prospect wants to be a client of UBS FRANCE and a prospect for UBS SWITZERLAND. The reverse could also be true. The investigation file contains numerous examples of UBS AG clients or prospects who eventually opened accounts or carried out banking transactions with UBS AG. Even if they did not request this relationship: that this activity is factually demonstrated at the material level without contradiction or invalidation by any documentary basis;

 

Considering that the procedure includes the file of the MORA couple: That Caroline DURET, officially employed by UBS AG as was integrated into the present judgment, met them on several occasions and in particular at their French domicile;

 

Considering that the court recalls that Marie-Laurence MORA was the president of the board of directors of the Giesler champagne company: That in fact, in her files extracted from the iAvenue Action software. Caroline DURET indicates that she was invited to dinner by them on a Saturday at 9pm "to discuss the April transfer, to follow up on the action, to see Marie-Laurence, her wife, the bubble file" on 1 April 2006: that on 3 April 2006. Caroline DURET had an appointment at the MORA's home for a "point bulle cession": that on 28 April 2006, she had dinner at their home for a "POINT SUR POST CESSION ET EVENTUEL PROJET ACHAT PROPRIETE AVEC HOTEL EN FRANCE POINT SUR AUTRE PROJET SUIVI RELATiON GROUPE": that she finally benefited from an ATA for the purchase of a property in France.

 

Finally, she received an ATA from Patrick de FAYET for which UBS SA indicated that: "Mrs Mora was a shareholder of the family Holdinf! Famille Mora. This Holdinf! controlled the Société des Champagnes Giesler and therefore the Lanson champagnes. This group was sold by the family and the other shareholders to Boizel Chanoine Champa2ne under the CAG "Bubble" mandate. The assets generated by the transfer were not booked in our books but were the subject of an ATA with the business manager concerned since she had initiated the relationship and the mandate": a trace of this operation can be found in the "milk books" found in the archives of UBS SA (UBS H2 seal) in which one can read in March 2006, for a "Bubbles" client, 62 million coming from C. Duret to P. Wick;

 

Considering that it is clear that Duret continued to act on behalf of his "employeurs" in the first half of 2006 and carried out canvassing activities right up to the homes of prospects;

 

Considering that Olivier FORGUES worked on the opening of accounts in Switzerland by one of his clients. Donald SLEATOR: That he indicates in one of his emails to Anne LONGIN-GUYOT before obieting "Perhaps 7,000,000 euros from NNM":

 

"It's about one of my clients (Mr Sleator) whom I suspected a year ago of having a small fortune at the Credit Suisse in Lausanne. with whom I made a bet... I made a bet with him, which he then ran to meet UBS at the bank of his choice in Lausanne. At the time of the bet, our agreement with Switzerland did not exist and the idea of presenting it in Switzerland came to me spontaneously. Considering that the Swiss business manager who corresponds with Olivier FORGUES, who is in charge of organising meetings in Switzerland, mentions the "prospect" in one of his emails: that Olivier FORGUES has been granted a 100% ATA on this operation;

 

Considering that Philippe CUVELIER is the director of the company Compagnie de Villemetrie, a client of UBS SA since 2000: that it appears from the documents communicated by UBS SA that the latter requested UBS SA, and more particularly its business manager, Laurent ZELLER, to obtain an ATA of 100% on this transaction. Laurent ZELLER. to obtain a credit for the acquisition of a vineyard: that it is finally UBS AG that will grant him this credit, as shown by the documentation transmitted by UBS SA concerning the ATA which is relative to it according to which: " Numerous elements support the thesis according to which the credit was carried out in Switzerland (... ) The business manager had the amount of the credit put in place for the operation recognised in Euros equivalent ";

 

Considering. in fact. according to the credit officer of UBS SA. Sandra TICHKOWSKY. it is a "file to be presented in Geneva": that, according to the documents communicated by UBS SA, the French chargé d'affaires "had the amount of the credit put in place for the operation recognised in equivalent Euros";

 

Considering that, in the case of Mrs Anita HARWELL. José SURACE, business manager at the Cannes branch, obtained an ATA, which he justified as follows: "We convinced the client to transfer her assets from Guernsey to UBS Lausanne"; that on an iAvenue Action form, the business manager indicated "Dinner with Mrs Hartwell and her lawyer. Deal done. OK to send us his 7M portfolio": that, moreover, the documents transmitted by UBS SA show that this opening was made during a dinner, therefore in a place that is not intended for the marketing of banking and financial products; that the business agent was granted an ATA of 100%;

 

Considering that Mr Osmane AÏDI was a client of Omar BERKOUK, the director of the Cannes branch: following the sale of the Roval Monceau hotel of which he was the owner. The latter placed his money in an account opened in the books of UBS AG as indicated in an email from Omar BERKOUK dated 27 July 2007 in which he wrote to Jean de BEAUCORPS: "Our colleague Claude Matthev has just recovered today at 4.30 pm a cheque of 47.7 M€, part of the proceeds from the sale of the RM hotel. This cheque will be cashed on Monday 30/07 with a value of +5/7. I expect a/00% recognition! As provided for in our agreements" (D2304/3); to justify the ATA related to this transaction. UBS SA stated "The French Chargé d'Affaires knew the owner of the Roval Monceau hotel (non-resident). The prospect transferred part of the proceeds of the sale, i.e. 47.7 MEUR, to Switzerland to the Claude Matthev Accountant": that subsequently, even though he was a client of UBS AG, he continued to deal with this client, as evidenced by an iAvenue Action file on the company, he stated that he had met with Mr AÏDI and his nephew on 1 October 2007 to discuss the investment of the proceeds of the sale of the Royal Monceau hotel;

 

Considering that Mr Jean FRANCOIS was an prospect of Alain BERTHAUT, business manager of the Lvon branch: the documents communicated by UBS SA indicate that the relationship originated with "an approach in the office of Alain Berthaut in January 2007": on the entry into a business relationship, it is specified that "in France. no entry into a relationship. Opening of the account with Roland GABERTHUEL at the end of 2007 and arrival of EUR 11.3 million in securities at the beginning of 2008' (D2320/5): the French chargé d'affaires was also awarded an ATA of 100 for this operation;

 

Considering that the holding company AURIA is a family holding company owned by Mr ASSERAF and his children, and is a client of UBS SA in Nantes; that during a lunch on 20 February 2008, the Nantes account manager presented to the client

"the structured products offer from UBS Switzerland to recover the 4M left by UBS Nantes.(... ) The idea is to recover for UBS Switzerland the 4M that left Interactive Broker and for UBS Nantes the fruit of the sale of assets (2/3M)' (D2327/7); in an email dated 8 October 2008, the account manager wrote: 'I had asked Switzerland at the beginning of the year for a problem with the structured products offer and this resulted in April in the opening of an account monitored by Frédéric with a transfer of 1M' (D2327/12); in an email dated 8 October 2008, the account manager wrote: 'I had asked Frédéric to open an account with UBS Nantes for a problem with the structured products offer. (D2327/12); that the French chargé d'affaires obtained an ATA of 100% on this transaction;

 

Considering that the Luxembourg limited partnerships with shares ANTARES, whose beneficiaries are the two sons of Jean-Louis NOISIEZ (JLN), founder and sole shareholder of the GSF group, opened accounts in the books of UBS AG thanks to the intervention of Olivier RA VET, a French chargé d'affaires; that it is in fact indicated in the documents communicated by UBS SA :

"In 2008, Olivier Ravet got in touch with JLN's lawyer, Lionel Yvant, for a project to create a foundation for JLN. The meeting was organised with Valérie Aubier Le Corre who accompanied the creation of the function in 2009. The foundation is not yet a client of UBS. Following multiple requests from Olivier from 2009 to 2011, to the lawyer and then to the CFO of JLN, Mr Yve Magaud, Olivier pitches for the management of the personal assets of the 2 SCAs. Wealth Planning/Thierry Chouvelon are asked to help and the client validates the opening of an account in Switzerland rather than in Luxembourg or France. (Dl 560/3) ;

 

Considering that, according to the documents communicated by UBS AG, the so-called US clients "were transferred between January and June 2008 to Switzerland in accordance with the JZrouve directive": French account managers contacted some of their clients on behalf of UBS AG. French business managers contacted some of their clients to ask them to close their accounts with UBS SA and to open accounts with UBS AG: among the French bank clients concerned, at least nine people were identified, including Mr and Mrs Stephen and Natalie WONG. Christian DESEGLISE. Jamasena PAGNIEZ. Nathalie DURAND. Raphaël LANKAR. Alice AVRAMOFF. Katharina WILSON. Yvonne ROGERS and Pierre HONEGGER: with regard to these clients, the documents communicated by UBS SA show that the client advisors sent them letters entitled "exit letter" as well as account transfer forms: in an email dated 4 July 2008. Hugues RENARD writes "it is intended to have some deco/lecte on American accounts that the wouve asks us to close (...) Pdf had confirmed this principle on the American customers";

 

Considering that in an email dated 14 December 2006. Christophe BIZET. French chargé d'affaires. writes to Patrick de FAYET to justify a request for recognition of business in the 'it is an American client transferred at the request of the JsrOUpe in Zurich whose capital outflow has never been "compensated" to me;

 

Considering that Gérard DUPEYRAT, a client of the French subsidiary with an account in Geneva, heard as a witness, stated: "UBS France offered to place part of my funds in Geneva"; that this operation gave rise to an ATA of 100% in favour of the French chargé d'affaires, Nicolas LONGON! that Gérard DUPEYRAT also stated: "It was LONGONI who gave me his opinion on investments in Switzerland, life insurance policies"; that Nicolas LONGONi confirmed the words of this client: "I told Mr DUPEYRAT, because of the drop in yields offered by rates, that if he wanted to benefit from a guaranteed rate, the best solution was to take out a life insurance policy invested 100% in guaranteed funds in Switzerland";

 

Considering that it results from the above-mentioned examples that, through the intermediary of employees of its French subsidiary UBS AG contacted 'prospects', often clients of its subsidiary, even though they had not requested it, with a view to obtaining their agreement to a banking or financial transaction as referred to in Article L.341-1 of the Monetary and Financial Code: ore. for some. these operations to which they consented were proposed to them at their home or in places not intended for the marketing of financial products. instruments and services: that the products proposed. in particular credits and bank accounts in Switzerland. are products prohibited from canvassing under the terms of Article L. 341-10 of the Monetary and Financial Code: aue these facts therefore constitute the offence of unlawful canvassing of banks and financial institutions as provided for by Article L. 353-2 of the Monetary and Financial Code, in particular in its subparagraph 1 and 2;

 

Considering that the 'France International' department of UBS AG targeted French clients, as evidenced by an email from Pierre PARIS, a former employee of UBS SA, to Philippe WICK dated 27 July 2006, in which he sent him a list of French clients and wrote to him (the court cites the email written in English): 'Dear all. Following our kick-off call last week. we are pleased to forward to you the updated TopFF target list. Should you have any additional changes (and we know that London and Brussels should add a few CA names) feel free to contact Cecile de Kerdanet. We have scaled back the list to 27 families out of the 50s screened (still reoresentimz an aggregated wealth of more than Eur100bn!). The ones wich are not selected are considered to be covered directly by local teams. In order to be ready to initial coordinated coverarre. each team needs to discuss objectives and action plans in the coming week and to complete the report sheet (corJV attached) by the 15th Septembre (pls send to Cecile). Pls also note in your diaries. that the first TopFF monthly meeting will take place on Monday 16th October (11am). An agenda and conf call number will be circulated. Regards, Pierre"; that this email can be freely translated as follows: "Dear all, following our kick-off meeting last week, we are pleased to send you our updated Top FF target list. If you have any additions to make (and we know that London and Brussels should add some names), please do not hesitate to contact Cécile de Kerdanet. We have reduced the list to 27 families from the 50 identified (still representing a fortune of over 100 billion euros!). Those who were not selected will be covered by local teams. In order to be ready to start a coordinated coverage, each team needs to discuss the objectives and action plans in the next few weeks and complete the reporting form (attached) before 15 September (please send it to Cécile). Please also note in your diaries that the first monthly TopFF meeting will take place on Monday 16 October (11am). An agenda and a contact number will be sent. Yours sincerely Pierre".

 

Considering that the internal regulations of UBS AG concerning the rules of canvassing are defined in documents called country papers: that it emerges from these documents produced by the legal person under examination that, after recalling the general regulations of canvassing in France, UBS AG points out that "The above-mentioned activities will not be considered as 'canvassing' if they are addressed to a person who is not a member of the company. e" if they are addressed to an existing client and if the transactions proposed are within the range of transactions that the client usually carries out (taking into consideration the nature of the transaction, the financial instruments offered to the client and the risks and amounts involved in the transaction)"; that on page 4 of the document. it is stated: 'No active solicitation of these (French) contacts with the contractual account opening documentation: no "cold" telephone to the prospects' and added: 'General networking activities by UBS ref)resents are possible in France. Care should be taken to keep contacts generic".

 

Considering that it is stated in fine that contractual documentation in the context of the opening of "relations" in France must, as far as possible, be concluded and signed outside France. In the case of a "relationship" in France, it is important that the contractual documents are signed and sent directly to Switzerland. These documents must be sent directly to Switzerland";

 

Considering that it is recalled on several occasions that it is possible for Swiss business representatives to respond to unsolicited requests from clients: it is clear from the above that the country Daoers encourage business representatives to enter into contractual relations with prospects residing on French territory;

 

Considering that the court must recall that it was mentioned that the Swiss CAs, when they went to France, had a manual entitled "Security Risk Governance" in which the practices that had to be observed in their relations with clients were detailed: that the court, with reference to the developments previously mentioned, must note that they tended to observe strict confidentiality and absolute opacity;

 

Considering that Olivier FORGUES affirmed, for his part, in the hearing, after having handed over a copy of the country papers: "This document reminds us that UBS Switzerland does not have the right to provide financial services in France. We explain to you what you should not do, but we explain further on in the document what you can do to get around these prohibitions. This document was available on the UBS intranet" and he added: "At the end of this document, which encourages people to commit fraud, the name and contact details of Mr VERNET, the Paris legal and ethics officer, are given, which I think is very suspicious;

 

Considering that it should be recalled that Bradley BIRKENFELD declares; "Assuming that these instructions were respected, they were hypocritical: authorising his employees to contact prospects for banking services (only to give him his account statement) but not for investments in shares, ob/ifzations... is like authorising to talk about football but not about women. But most importantly. these instructions were never Dected. and UBS knew it. These instructions. what we call "cover your ass": a hard facade. Do you think that UBS was prepared to spend $10,000 for a fortnight of professional work in the US if it was only to present their bank statements to existing clients and nothing else. I heard that all these documents were put on the UBS intranet without even being notified;

 

Considering that this testimony is one of the elements of the file, which in the law of evidence is valid as simple information. Considering that, although it can be said that BIRKENFELD was never involved in the operation of the French structure and is exclusively concerned with illegal procedures committed in the United States and which led to his conviction and before that to an agreement between his employer, the UBS bank, and the American justice system;

 

Considering that if it can be envisaged that BIRKENFELD has or has had a personal interest in implicating his employer for the facts that he committed on the territory of the United States, it must be envisaged that his testimony relates in general the description of fraudulent processes notwithstanding the prescriptions displayed by his employer to respect the laws: THAT it is not legally forbidden to the Court to note that this witness by his position within the bank. That it is not a legal defence for the Court to note that this witness, by virtue of his position within the bank, his hierarchical position and his professional experience, had a precise, if not high, level of knowledge of the mechanisms of its actual functioning. Even though it was concealed from the authorities of the various countries where this Swiss bank had decided to operate;

 

Considering that it is not forbidden for the French courts to mention the agreement concluded by this bank with the American courts and to recall that in itself subscribing to such an act is not a trivial act of banking management;,

 

Considering that the court must at this stage of the judgment rule on the promotional events organised by the subsidiary and the parent company: this factual aspect having given rise to controversy between the defendants and the investigating judges;

 

Considering that the two accused banking institutions present the events as vectors for promoting UBS's brand and image and for maintaining the commercial relationship: that the testimonies collected report in their entirety that these events were used to target "prospects" in order to initiate a future business relationship;

 

Considering that on the behaviour of the Swiss business managers when they were present at these events, the court cites an extract from MORA's testimony which states that they were "aggressive" in these circumstances;

 

Considering that no direct canvassing was in fact observed, and this applies especially to the surveillance carried out at the Roland Garros stadium. (only the presence of a Swiss CA is alleged): the Court favours the existing documentary basis on this point as well as the testimonies that would be related to it if necessary. The Court specifies that the signing of commitments by which capital is exported to Switzerland (a country little known for its fiscal transparency and very welcoming to capital from countries that are notably geographically distant), with the dual intention of making it escape taxation and profiting from it, is not carried out in full view of the public;

 

Considering that it appears from UBS AG's internal documentation, in particular from a power point written by Tania RIZZELLO entitled "Relocated French people", that, in order to initiate a relationship with candidates for expatriation ("Creation of the relationship"), UBS AG used events abroad

"Introducing Switzerland with the use of an event and brochures"); that the events suggested included "Alinghi, Champagne, Ferrari" as well as "domestic" events;

 

Considering that it appears from an email of 3 June 2004 that Gabriel DUBUIS, who works at the Basel agency, took part in a golf event on 21 June 2004 in Bouffémont to which he invited six prospects who are French residents; that among these prospects, Philippe CHERAULT appears on the "monobank" file produced by the tax authorities; that he therefore opened an account in the books of UBS AG;

 

Considering that it emerges from the documents submitted by Stéphanie GIBAUD (the court recalling that the testimony itself of Mrs. GIBAUD does not go beyond the stage of feeling) that David ROSSIER, business manager of UBS AG, invited 'prospects' to the Golf-Trophy event in Lille; that among these prospects, Robert TOULEMONDE appears on the 'single-bank' file produced by the tax authorities; that he therefore opened an account in the books of UBS AG;

 

Considering that at this stage (the examination of the documentation submitted by Stéphanie GIBAUD), it is appropriate to rule on the merits of the objection of inadmissibility (the court having rejected the objection of nullity relating to these documents, raised by the defence of the bank UBS SA);

 

Considering that in support of its claim, it is asserted that this documentation was obtained in an illicit manner, either as a result of misappropriation or fraudulent misappropriation;

 

Considering on this point that the court must recall that the documentation provided by GIBAUD has never led to a conviction by any court on the grounds of theft or breach of trust; that the applicant for the exception of inadmissibility is in fact limited to issuing opinions and views that are devoid of any evidential value;

 

Considering then that the falsity of the documentary base handed over by GIBAUD has never been established; that it is not enough to proclaim that documents are inaccurate, false or stolen in order to obtain that they be removed from the debates;

 

Considering that it must be appreciated that in these conditions no legal prohibition relating to inadmissibility on this point is characterised according to article 427 of the code of criminal procedure;

 

Considering, moreover, that this documentary basis was debated in adversarial proceedings at the stage of the judicial investigation;

 

Considering that the stratagem or illegality of the means of proof does not go beyond the stage of the allegations of the defence, the objection of inadmissibility is not legally founded; that it will be rejected for these reasons;

 

Considering then that it appears from an internal document of UBS SA, entitled "Minutes of meeting of 21 June 2010", that Jürg ZELTNER went to Paris to meet clients and "UHNWI prospects";

 

Considering that Juan MORENO, a Swiss business manager, visited the Bordeaux branch on several occasions, that Véronique ZAMORA, who was then a management assistant, stated that she had seen him at two events; that he signed a letter addressed to Pascal BRUN, a Loto winner canvassed by UBS AG, in which he wrote: "We refer to the meeting we had with your brother Stéphane on 21 April 2010 at our UBS (France) SA offices in Bordeaux";

 

Considering that the documentary basis is of various origins according to the court's observation;

 

Considering that the testimony of the manager who preceded Pierre Povet at the head of the subsidiary must be cited because it comes from a person who, according to the file, had no dispute with his former employers and that it undoubtedly confirms the other testimonies against him;

 

Considering that Jean-Louis de MONTESQUIOU, Pierre POYET's predecessor as Chairman of the Management Board, stated: << The Swiss had however kept their ancestral habits of going to France. I remember a big party at the Crillon attended by the big Swiss bosses, including Messrs GAGNEBIN and Martin LIECHTL. I forbade my business managers to go to this kind of event and the Swiss "canvassers" to set foot on Boulevard Haussmann. Every time we recruited people, we made a point of asking them not to work with Switzerland so as not to participate in illegal operations. Not everyone liked that. The Americans were on the same line as us. But when I came under the control of Dieter KIEFER, it became more and more difficult. Every quarter, I would come across at least one Swiss business representative ("green men" in Paris, in the airports, etc.). The Swiss representatives always said that all these trips were legal. KIEFER implied that the French banks in Switzerland were doing the same. I had only one argument against them and their representatives with the law against canvassing which came into force I think in 2002. I warned them. And then, as it was untenable, I asked to change jobs.

 

Question 5: What can you tell us about the illegal canvassing of prospects/clients in France by Swiss business managers?

 

Answer: Everyone reported it to me, including the account managers. On ten or so occasions, clients have told me that they had met Swiss business managers. Even I met two of them at the airport once when I was picking up my children. Some Swiss CAs often came to GOLF events. If they were paid for trips and luxury hotels, it was obviously not for nothing";

 

Considering that several witnesses report this expression of "little green men"; that in fact, Caroline DURET declared in police custody: "I remember that the Swiss salesmen were called "little green men", with a slightly mysterious side. I had obviously heard of Swiss or Luxembourgish people coming to France to canvass for clients"; Béatrice PANTAGNIES, heard as a witness, stated: "It's a Swiss bank, it comes to France to find its clients. The "little green men", i.e. the Swiss CAs, did not come to the premises of UBS FRANCE and I did not go to the events. I know that at the beginning there were Swiss CAs on the events, in 2002- 2003, 2004. But after a while they stopped going. I heard that.

 

Considering that it follows from the above that Swiss business representatives did indeed travel on national territory to carry out acts of banking and financial canvassing in defiance of the prohibition imposed on the parent company, which never had the documents authorising it to carry out such acts; that the convergence between this testimony and the above-mentioned documentary base, as well as with the testimonies of Mrs DURET, Mrs PANTEGNIES and Mrs ZAMORA, must also be noted

 

Considering that, contrary to what UBS AG's defence maintains, consumer protection is not the only legal function of the rules governing banking and financial canvassing; that these rules also aim to protect national interests; that in fact, Article L.341-10 of the CMF lists, among the products that may not be sold, "products not authorised for marketing on French territory pursuant to Article 151-2"; this article provides that "the government may, in order to protect national interests and by decree issued on the report of the Minister for the Economy :

 

- Subject to declaration, prior authorisation or control :

- Foreign exchange transactions, capital movements and settlements of any kind between France and foreign countries:

- The constitution, change of consistency and liquidation of French assets abroad;

- The constitution and liquidation of foreign investments in France;

- The import and export of gold as well as all other material movements of securities between France and abroad;

- Prescribing the repatriation of claims on foreigners outside the European Union arising from the export of goods, the payment of services and, in general, all income or products abroad;

- To authorise intermediaries to carry out the transactions mentioned in 1, .a and d above";

Considering that the rules on canvassing in the banking and financial sector are intended to protect organisations authorised to operate in France; that the purpose of penalising illegal canvassing in the banking and financial sector is to preserve their free and legal right to operate as authorised establishments; that this is the intention of the legislator, who wanted to protect both consumers and national interests;

 

Considering that allowing banks that are not established in the European Economic Area or that have adopted a policy of not being subject to EU law to be able to open accounts and export the associated capital from "a third country would be an obvious destabilising factor for the market economy in that, on the one hand, establishments established in France and complying with both French domestic law and EU law would be in direct competition with each other and, on the other hand, the conquest of market shares by unauthorised establishments is an obvious risk factor for money laundering;

 

Considering that the Court recalls that France has been pursuing the task of preventing the realisation of this risk for more than twenty-five years, even from a fiscal point of view; the first convention aimed at combating this deadly phenomenon of the economy dates from 1990;

 

Considering that there is no legal defence to situate bank canvassing in its exact framework, which goes beyond that of the simple defence of the consumer considered as an individual;

 

Considering that the defence advocates a legal consultation by an academic, Mr. Bonneau, as a doctrinal support for the fact that the canvassing facts referred to in the file are not covered by the law; that it will be recalled that doctrinal opinions have no other scope than that of issuing opinions and views on legal questions relating to the determination of offences for which the criminal justice system is the sole judge of the characterisation;

 

Considering that the simple act of contacting a potential client, even if no contract is ultimately concluded or if it is only a matter of offering advice, constitutes an act of canvassing in law, the restrictions made by the author cited by the defence being the result of an analysis tending to restrict the application of this text to cases that do not appear in the law;

 

Considering that, as the court rightly ruled, the fact of examining situations not subject to the rules concerning banking or financial canvassing provided for in Article L.341-2 of the Monetary and Financial Code is unnecessary since all canvassing activity was prohibited at UBS AG; that, in fact, on the one hand, Article L. 353-2 of the Monetary and Financial Code sanctions canvassing as defined in Article L.341-1 of the same code when it concerns prohibited products or when it is committed by a person who is not authorised to do so without any reference to Article L.341-2 of the same code; that, on the other hand, Article L.341-2 of the Monetary and Financial Code does not provide for exceptions to situations of illegal canvassing but for exceptions to the rules applicable to banking and financial canvassing;

 

Considering, moreover, and having regard to the defence's writings, that the court, according to the documentary basis that has just been inventoried, must note that the relations established:

 

- Go beyond mere contact;

- Took place in places that do not correspond to the provisions of Article L.341-3 of the Monetary and Financial Code, nor do they concern one of the persons mentioned in this text;

- Do not take place at the request of a legal person; Concern openings followed by transfers of funds to Switzerland;

- The steps are not taken on behalf of credit institutions or finance companies;

- Do not concern financing contracts referred to in Article L.341-2°7 ;

- Nor do they concern the facts referred to in Article L.341-2°8 ;

 

Considering moreover that the cases referred to in paragraphs 9, 10 and 11 are unrelated to the facts before the court because the persons mentioned in point one of Article L.341-3, do not concern the payment or electronic money establishments and have gone beyond the stage of disseminating simple advertising information, the court recalling on this last point that the testimony attesting to the signing of contractual acts outside any usual commercial framework, or even abroad, is a constant in the case file;

 

Considering in conclusion that the constant practices, over the years, as reported by the documentary base seized or handed over, the findings of the administrative procedure that gave rise to the opening of the judicial investigations, the testimonies collected and with the exception of one considered by the court to be reliable, are the basis for the firm conviction that the sufficient charges authorising the judgement that UBS AG, which did not have any document authorising it to do so within the European Union in general and in France in particular, had infringed French law, are met; that it is specified that in this assessment the documents transmitted by way of administrative assistance by the Swiss and German authorities were not taken into account in the court's judgment; that since these documents are the subject of the objection of inadmissibility raised by Bank UBS AG, it is appropriate to rule on it;

 

Considering that this objection raised at first instance was declared inadmissible by the court which, as has just been stated, declared that it did not take into account the documents that were the subject of the objection;

 

Considering that the court recalls that an exception of inadmissibility of elements of proof is admissible under the condition of being founded on the provisions of the procedure relating to the right of proof; that no foreclosure can be opposed; that on this point the judgement will be reversed; that in fact, the debate relating to probatory elements debated before the court concerns the trial and not only the procedure of instruction;

 

Considering that the exception of nullity of acts of investigation and the request for inadmissibility based on Article 427 of the Code of Criminal Procedure have different legal bases;

 

Considering that this reversal does not in fact have any consequence on the motivation of the court insofar as the latter did not take into account the said documents; that this will be noted;

 

Considering that the Court upheld this exception relating to the documents obtained from the Swiss and German tax authorities on the grounds set out on pages 64 to 66 of its decision; that before the Court, both the public prosecutor and the civil party appellant, who concluded on this point (the exception being taken up by the bank UBS AG), failed to produce arguments or means that would invalidate the judgement on its admission of the merits of this exception of inadmissibility; that in fact the documents handed over could not be used in criminal proceedings such as the one whose subject matter is the one of the file submitted to the Court's appreciation;

 

Considering that this exception was based on the ground that the legal effect was that the provisions of the Directive on administrative assistance had not been complied with; that this reasoning is correct and that, as the court decided, the Court, adopting the same position, will not retain these documents in its assessment, subject to the express reservation that they will be removed from the proceedings;

 

Considering that the Court wishes to recall that this measure has no practical impact on the central question of determining the elements of guilt of this legal person;

 

Considering that the guilt of _UBS AG as the main perpetrator must be considered from now on, subject to this reservation, as the court has correctly judged; that the material and human assistance as denounced, specified by the factual basis already examined, which was provided by its subsidiary, signifies the characterisation of the act of complicity retained in the prosecution; that the comments of the first corporate officer of MONTESQUIOU, of the immediate collaborator PANTAGNIES of Patrick de FAYET, and even the declarations of Patrick de FAYET himself in police custody, are again recalled; that reference is made to the other testimonies mentioned in this section of the judgment

 

Considering that other documents must be analysed because they concern this question of guilt;

Concerning UBS AG:

 

Considering that a UBS AG power point entitled "Western Europe - Revenue Sharing & ATA Correction Rules" of 9 July 2007 is submitted to the proceedings; that it is inferred from this document that UBS AG set up the ATA system in order to encourage the business managers to market on behalf of the "UBS Group", regardless of the entity for which they actually worked

 

Considering that the UBS AG documentation entitled "ATA Management" issued by the Head of Front Office and validated by the Executive Board on 21 March 2011 states: "1:

 

"1. reminder of the Group framework

 

An ATA (Asset Transfer Adjustment) is an acknowledgement of business between two traders that authorises accounting corrections to the allocation of net NewMoney.

 

An ATA can only be carried out on the basis of an actual flow of funds (transfer, transfer, cheque, etc.) of more than CHF 50,000 to or from a UBS JVM&SB account for a new or existing client.

 

Each Acknowledgement of Business must relate to only one client.

 

Considering that in addition to these two documents there is another document, a power point entitled "WM Referral Program - Briefing of Local Referral Desks" dated February 2008, that UBS AG intended to encourage the implementation of referrals of prospects by employees of its subsidiaries to other bodies of the group through the Renew application;

 

Considering that UBS AG set up a system allowing business managers of its French subsidiary to canvass on its own behalf;

 

Considering that Raoul Weil stated that "the general policy was that the CAs could recommend clients in other countries (...) There was the Global Referrals System as exists in other banks. (...) The objective was to keep the client within the UBS group. (...)

 

Question n°47: Was there a global policy to send UBS AG CAs to meet prospects/clients in their home country?

Answer: About fifteen years ago it was a global policy but since then there is a policy per country. Today, it is easier because there is uniformity within the countries of Europe for licences. Today, this is called the European passport.

 

Any AC who moves around has to follow the prospecting rules of the country in which he moves. They have to follow the rules of the country they are in. There has always been a procedure for travelling. I remember that travel had to be approved by the head of the desk.

 

I can tell you about Swiss CAs who travelled to the United States. They were trained on what they could and could not do in the US. I suppose it was the same for all CAs who travelled to other countries.

 

Whereas the 2005 country paper stated in part:

 

"*UBS presenters must not actively approach clients in France with a view to offering them investment products or services.

* UBS may respond to unsolicited requests from clients.

* Additional or revised banking forms should be signed outside France wherever possible.

( ...)

* Referral of possible clients by UBS (France) SA to UBS SA only on an occasional basis. UBS (France) SA must not be involved in what could be construed as banking intermediation or investment services for which UBS SA is not authorised to practice and offer in France.

 

* Client contacts at UBS's domestic premises with the involvement of UBS's French entities is only permitted if approved by the client/prospect and UBS (France) SA.

 

Considering that this document illustrates that UBS AG authorises its account managers to meet and offer services to prospects on French territory, in particular through its French subsidiary, or to clients who would not have requested it;

 

Considering that it is confirmed that UBS AG implemented a group policy aimed at encouraging its subsidiaries' business managers to prospect on its own behalf; that it is for the court definitively established that it allowed its business managers to travel on French territory, in particular to events at which prospects were present, with a view to obtaining from them an agreement on a banking or financial transaction; that this group policy was desired by the governance bodies of UBS AG, namely the Board of Directors and the Group Executive Board, and was implemented by the Executive Committee as well as by the successive directors of the private bank CEO Global Wealth Management, namely Marcel ROHNER, in office from 2004 to June 2007, and perpetuated by his successors, Raoul WEIL, Francesco MORRA and Jürg ZELTNER until 2011;

 

Considering that for these reasons the judgement will be confirmed with regard to this bank for the offence of illegal canvassing;

 

Concerning Raoul WEIL :

 

Considering that Raoul WEIL declared in open court: "There was a worldwide referencing system. (...) For the CAs, I defined a curriculum, in other words a certification process. I was involved in setting up this curriculum or specification for the training of CAs. The training was the responsibility of Regional Marketing. Between 6,000 and 10,000 CAs took part in this training worldwide. The "four step advisory process" was developed. I don't remember the details. I know that one of the things we had to do was to assess the client's needs in terms of his ability to take risks. (...) I remember a conference in Paris for managers from several regions. But generally I just stayed for the day (arriving in the morning, leaving in the evening) to give an update on the bank's activity in France and road show conferences to explain the bank's strategy and results. There were meetings with the managers of UBS France. We talked about the number of staff hired, the new branches, etc.";

 

Considering that Raoul Weil gave the introductory and concluding speech at the "WMI Core Affiuent Convention 2006" seminar which took place on 8 June 2006 in Zurich; that at this event, he declared "We want to grow as an organisation and to do this we need to have the best talent", i.e. "We want to grow as a group and to do this we need the best talent"; In November of the same year, Daniel LIPP took part in the introduction and conclusion, together with Patrick de FAYET, of another seminar entitled "CorA France Domestic: Synergies with CorA International"; that on this occasion, Daniel LIPP presented the tools developed by UBS AG in order to promote the development of the Core Affiuent sector; that Béatrice LORIN-GUERIN presented "a joint induction day between Core A France and Core A International" and proposed "to the recruited Board of Directors to discover the WMJ International organisation and vice versa";

 

Considering that in an email dated 7 November 2007, Raoul Weil announced a change in the organisation of the group; that in the letter attached thereto addressed to the "Key Position Holders, Global WM&BB" with a copy to the members of the Executive Committee and the Group Managing Board for Global WM&BB, Raoul Weil announced a reorganisation with the aim of accelerating the application of their "business strategy"; that in the minutes of the deliberations of the Management Board of UBS SA dated 7 November 2007, it is written: "A new organisation of Global WM&BB has been announced, with the aim of organisational simplification and strengthening of the regions, and results in a division of the markets grouped into five regions, namely Switzerland (WM&BB under the responsibility of Alain Robert), Americas (Marien Hozkstra), APC (Kathy Shih), NECE (Jürg Zeltner) and WEMMEA (. under the responsibility of Franco Morra), with the Western Europe Business Unit being integrated into the WEMMEA Business Area. HR & Education will move out of MS&D and report directly to Raoul Weil. Global Key Clients, Global Segment & Sales Management and Global FIM will be integrated into the Marketing, Segment & Client Development department;

 

Considering, however, that if it is true that WEIL was part of the decision-making structure of the bank in the conceptualisation of this illegal policy, he cannot legally be held solely responsible for the decisions collectively taken;

 

Considering moreover that the reasons which determined the court to release Raoul WEIL, remains that the fact of having intellectually participated in processes leading to circumventing the prohibition on canvassing is not sufficient in itself to characterise his guilt; that in addition, the implementation of a group policy concerns a plurality of persons on whose account the court remains uncertain;

 

Concerning Dieter KIEFER :

 

Considering that it is clear from Jean-Louis de MONTESQUIOU's statements that Dieter KIEFER encouraged the movement of UBS AG's business managers; that it is clear from Patrick de FAYET's statements that Dieter KIEFER insisted that he develop and ensure the desired synergy between the Swiss and French business managers;

 

Considering that Patrick de FAYET declared that Dieter KIEFER had asked him to collaborate with Philippe WICK to develop "France International" and "France domestique";

 

Considering that, still according to Patrick de FAYET, Dieter KIEFER had the budget for the events organised in France and that the authorisation to spend was given by him; that Etienne de TIMARY as well as Jean-Louis de MONTESQUIOU have attested that Dieter KIEFER travelled on French territory;

 

Considering that these elements, in conjunction with the court's motivation, justify Dieter KIEFER's guilt because, unlike Raoul WEIL, his actions, equivalent to the accomplishment of positive facts, are proven; that the court will confirm his conviction for these reasons, which complement those of the court;

 

Concerning Philippe WICK :

 

Considering that the court must recall the particularism that affected the management of the "milk books" in the

Considering that the court must recall the particular nature of the management of the "milk books" within the company UBS SA;

 

Considering that, while this bank was bound by the strict observance of French and European banking law, it was decided to manage, under the supervision of Philippe WICK and Patrick de FAYET, the recognition of business between the Swiss and French;

 

Considering that the "milk books", with the exception of one, have never been found; that this management method desired by the management of the two banks, obviously because of its type, constitutes a strong presumption that de FAYET and WICK, on the instructions of persons on whose behalf they did not wish to express themselves, chose to manage the calculation of the bonuses of the business managers in an abnormal manner;

 

Considering that it must be recalled that, in a banking establishment such as the subsidiary, which must apply French domestic law and European directives, any business movement must be able to be traced with precision; that this lack of traceability, which WICK and de FAYET not only accommodated for several years but also contributed to its operation, means that WICK, a seasoned professional in banking law, a high-level executive of UBS AG, specially mandated to act as de FAYET's interface, knew that his practices fell under the law and contravened the legal prohibition on canvassing;

 

Considering that even if the court admits that it does not have precise knowledge of Swiss banking law, the personal practices of this defendant are manifestly illegal; the court recalling the description, which appears in the case file, of his entry into the French domestic market in order to free his employer from the legal prohibition which prevented him from legally committing acts of canvassing in France or inciting the CAs of the subsidiary to act on behalf of UBS AG

 

Considering that it must be reiterated by the court that he was the real superior of Caroline DURET, even though she was an employee of UBS SA, who was prospecting and canvassing for the SEG sector of UBS AG;

 

Considering that these elements, in conjunction with the other grounds retained by the court to found Philippe WICK's guilt, determine the court to confirm the judgement on his conviction;

 

Concerning Olivier BAUDRY:

 

Considering that Olivier BAUDRY succeeded Philippe WICK; that he took over the system of milk books set up with Patrick de FAYET; that he carried out a large number of ATAs in favour of Patrick de FAYET; that he therefore participated in the system of business recognition that encouraged the business managers of the French subsidiary to canvass on behalf of UBS AG;

 

Considering that the reasons given by the court with regard to Philippe WICK are valid with regard to BAUDRY who did not change anything in the professional practices of his predecessor;

 

Considering that it must be reiterated that Olivier BAUDRY, a high-level banking executive, mandated by the bank's hierarchy to be Patrick de FAYET's interface, resorted to the same occult and atypical procedure leading to the result that, apart from the milk book for 2007, no traceability of these movements could be reconstructed;

 

Considering that this defendant, who before the court has exerted the perfect regularity of his professional practices when he succeeded WICK, fails particularly to refute these findings; that in reality BAUDRY has limited himself to taking up the mechanisms of concealment established and put into practice by his predecessor; that for these reasons, which are complementary to those of the court, his guilt will be confirmed by the court, which lastly stresses that, with regard to BAUDRY, his hierarchical level would obviously have allowed him, had he not subscribed to it, to modify the practices for which he has been convicted today;

 

Concerning UBS SA :

 

Considering that UBS SA made its employees available to UBS AG so that they could canvass for its own account; that this resulted in the ATA system, the purpose of which was to take into account the amount of "net new money" brought by the subsidiary's account managers to the parent company in the calculation of their bonus;

 

Considering that internal documents of the above-mentioned bank show that the subsidiary's account managers were required to cooperate with their Swiss counterparts; that in a presentation made by Joël PERIE, it is indicated that the French and Swiss CAs communicate regularly on new products and the evolution of the commercial offer; that among the avenues to be explored, he proposes to create pairs of desks; that the court cites this element among others that have already been integrated into the judgment;

 

Considering that Patrick de FAYET stated that Philippe WICK and Olivier BAUDRY "often walked around the corridors of UBS FRANCE"; that when asked whether the French business managers had the choice of collaborating with Switzerland, he replied: "not really no. When Zurich decided, we did it ourselves. When Zurich decided, we did as Zurich wanted;

 

Considering that these statements confirm that the French subsidiary provided UBS AG with the human and material resources to enable it to carry out its activities on French territory;

 

Considering that both the ATA system and the collaboration with the Swiss chargés d'affaires was decided by UBS AG; that the latter was able to set it up within its subsidiary through its management board and in particular its chairman, Pierre POYET, from September 2004 to 30 November 2007 and its supervisory board, of which Dieter KIEFER was chairman from 2004 until August 2008; that it results from Omar BERKOUK's statements that Pierre POYET, a Swiss citizen from UBS Monaco, was the 'puppet' of UBS AG; that according to the statements of Serge HUSS, Raoul WEIL, Dieter KIEFER and Pierre POYET were at the origin of the milk books; that according to Jean-Louis de MONTESQUIOU, Pierre POYET's predecessor, Dieter KIEFER was his 'direct boss' and managed both the domestic and legal activities; that when he came under Dieter KIEFER's control, it became increasingly difficult not to work with the Swiss;

 

Considering that the successors of Dieter KIEFER, namely Gabriel CASTELLO, and Pierre POYET, namely Thierry de CHAMBURE, perpetuated the policy of subordination of the French subsidiary to UBS AG and that the system of milk books and ATAs continued until 2009; that the guilt of the French subsidiary, which is rightly considered to be established, will be confirmed; the Court recalling the other charges, which must be qualified as diverse and convergent, already cited and examined by the Court;

 

Concerning Patrick de FAYET

 

Considering that Patrick de FAYET coordinated the commercial activity of the French subsidiary between 2004 and 2009; that in this capacity, he actively participated in the allegedly legal synergies put in place by UBS AG, which allowed UBS AG to canvass in France through the intermediary of its subsidiary's employees; that he thus intervened in the introduction and conclusion of the seminar "CorA France Domestic: Synergies with CorA Inti" with Daniel LIPP and Gabriel CASTELLO;

 

Considering that he set up the "carnets du lait" system within UBS SA; that he acknowledged having taken part in meetings with Philippe WICK and Olivier BAUDRY to validate the ATAs to be carried out; that he thus benefited from "nétés" ATAs that they "trickled down" to his French business managers; that he thus participated in the canvassing committed by UBS AG through the employees of its subsidiary;

 

Considering that the position of this accused, the charges against him which have been identified and already examined, lead to the already recorded finding that he was the interface of WICK and BAUDRY and the obligatory point of passage for the circumvention of the law; that it is not legally forbidden for the Court to recall the declarations he made before his appearance before the court and of which the Court has quoted numerous extracts which have the precise meaning that at that time of the procedure he appeared in the answers he gave not to question the presumptions characterising the illegalities in the law on canvassing that were being pursued;

 

Considering that the accused, in his capacity as a professional in the banking sector, had the necessary freedom of choice not to comply or to put forward elements that could have brought his own practices back into line with the law; that he made the opposite choice; that for these reasons, the judgement will be confirmed on his partial declaration of guilt; the partial acquittal pronounced in his favour by the court being well-founded and moreover not called into question by any fact or document that would have been submitted to the adversarial debate

 

Concerning Hervé d'Halluin:

 

Considering that Hervé d'Halluin organised, (this is a reminder), hunts in France with Joanny DALLOZ at which prospects were present;

 

Considering that he also benefited from an ATA from Joanny DALLOZ; that in his supporting email to Patrick de FAYET, he wrote: "Contribution of 1,440 KE from one of my prospects, a French resident, who wished to enter into a relationship with UBS directly in Switzerland (declared accounts). I introduced him to Joanny Dalloz who opened the registered account and received the funds";

 

Considering that, in order to establish its firm conviction, the Court deals with the case of this defendant on pages 197 and 198 of its judgment; that it is concluded in particular that he was

Considering that, in order to establish its firm belief, the court discusses the case of this defendant on pages 197 and 198 of its judgment; that it is concluded, in particular, that he was "an essential link in the regional system";

 

Considering, for the court, that if the above-mentioned document and the organisation of hunts are incriminating elements, the stage of reasonable doubt is not exceeded concerning him because it cannot be deduced, given his subordinate role in relation to that of De FAYET as a simple regional manager, that he personally and directly contributed to the illegal canvassing of business managers of the parent company;

 

Considering that the characterisation of a personal fact of canvassing infringement must be based on a plurality of documents or witnesses or the explanation of the charges, especially as the period of time referred to in the prevention is five years; that the Court willingly envisages that during hunting parties bringing together bankers and persons specially chosen for the importance of their financial situation, the subjects discussed during conversations go beyond the hunting field; that, however, conjecture cannot suffice as a basis for a conviction for lack of factual or documentary evidence;

 

Considering, moreover, that in an e-mail dated 11 February 2008 addressed to Patrick de FAYET with the subject "Compensation ATA Belgium 5 ME", Hervé d'HALLUIN wrote: "Following our conversation on Friday (thank you again for your visit and for the quality of our discussion), I confirm that Belgium has recognised 50% of JO ME that Anthony and Loïc brought them on the Duclos project at the beginning of January. The Belgian CA Yves Dupret has just confirmed an ATA of € 5.000.000, a copy of which is available via the link below.

 

As discussed, I am sending you today an ATA of € 5.000.000, beneficiary A. Watine (who will redistribute to Loïc according to internal agreement), in compensation for the loss of earnings.

 

As agreed, I am also working on a synthetic argument to define the key success factors for the development of major French clients who need to book in Belgium and/or Lux;

 

Considering that it must be recalled that the opening of accounts in Luxembourg or Belgium are excluded from the scope of the case; the court referring to the exact terms of the referral confined to Paris, the national territory and Switzerland;

 

Considering for the court, that it must state that this document in itself raises questions as to the legality of the practices of this defendant but that it must be stressed that the opening of accounts in Belgium and Luxembourg was excluded from the referral of the court and a fortiori of the court; that in reality this document, which concerns external facts, outside the scope of the case, cannot form the basis of the court's conviction in the sense of the declaration of guilt of d'HALLUIN, about whom it will be recalled that he was only a regional level and was at a relatively junior stage within the subsidiary; that in the end, and in the absence of being able to identify a plurality of clues, direct and substantiated accusations and a sufficient documentary basis, the confirmation of the judgement is not possible

 

Considering that it was possible to prosecute this defendant, who is also practising in the vicinity of the two countries (mentioned in the exchanges of February 2008) and also known for the fiscal and financial facilities that they grant to wealthy persons, but that the stage of presumptions has not been exceeded in his case;

 

Considering that for these reasons, the judgment will be overturned and d'HALLUIN will be dismissed from the proceedings;

 

Considering that the partial acquittal pronounced by the court, based on just grounds, will be confirmed; that the accused being dismissed from the proceedings in its entirety;

 

On the laundering of tax fraud

 

Considering that Article 4 A of the General Tax Code requires persons whose tax domicile is the payment of income tax: any person liable to pay the said tax is required to submit a declaration of all his income and profits for each year. In order to comply with the provisions of article 1649A of the general tax code. That to satisfy the provisions of article 1649A of the general tax code, the natural persons domiciled in France are held to deposit with their declaration of income. the references of the current accounts opened, used or closed abroad: with the same for the life insurance contracts subscribed abroad in application of article 1649 AA of the same code;

 

Considering that the provisions of article 885 A of the same code subject to the tax of solidarity on fortune. when the value of their goods is higher than the limit of the first bracket of the tariff fixed in article 885 U of the aforementioned code. the natural persons fiscally domiciled in France because of their assets located in France or abroad: that the base of the said tax is constituted by the net value of the whole of the taxable goods. rights and values which composent the assets of the taxpayers on January 1st of the year, in application of article 885 E of the same code;

Considering that the absence of declaration of funds placed or concealed generates each year a renewal of the offence of tax fraud within the meaning of Article 1741 of the General Tax Code;

 

Considering that taxpayers domiciled in France who did not meet their tax obligations mentioned above were clients of the UBS AG bank within its France International department; that they transferred or deposited on accounts opened in this establishment sums that were not subject to tax: that this state of affairs was reported by employees of UBS AG (the court referring to the section of the judgment entitled "reminder of the facts and the procedure" and "the course of the appeal hearing") and was not contested by the defendants, who agreed that among the clients of the France International department that the particular situation of these clients gave rise to the specific designation of "simple money" for their assets used by the teams of UBS AG and its subsidiary UBS France: that several thousand clients of UBS AG. identified in the proceedings by the communications made by the civil party both during the judicial investigation and before the court have spontaneously requested the regularisation of their tax situation by filing files with the ad hoc bodies set up within the General Directorate of Public Finances: that the court has the files of Mrs Jacqueline BALLEYDIER. Mr Lennart BRAG. Mr Bernard DAL, Mr Patrick BAUMGARTEN. Mr Pierre SACHET. Mr and Mrs Raymond HOLLANDO. Mrs. Danielle HOLLANDO and Mrs. Michelle HOLLANDO paid by the civil party who had the right to submit these documents to the court's appreciation;

 

Considering that it is therefore constant that the Swiss bank held in its books, in part or in full, for a fraction of its clientele, which opened and used one or more bank accounts, directly or through an intermediary structure, with the aim of concealing assets and/or income from the French tax authorities during the period covered by the preventive measures, which constituted the proceeds of the offence of tax fraud;

 

Considering that the French courts have jurisdiction to hear the offence of money laundering committed abroad when it concerns funds or values produced by offences committed in France, even if covered by the statute of limitations, which constitute the offence of money laundering within the meaning of Article 113-2 of the Criminal Code;

 

Considering that Article 324-1 of the Criminal Code. interpreted in light of the provisions of Article 2 of Directive 2018/1673 of the European Parliament and of the Council of 23 October 2018 on combating money laundering through criminal law. It is irrelevant that the proceeds of any tax fraud committed downstream of the deposit of assets in the books of UBS AG cannot be specifically located within the assets in question, and thus affect their lawfulness;

 

Considering that the defendants Olivier BAUDRY. Considering that the defendants Olivier BAUDRY, Dieter KIEFER and Philippe WICK acknowledged before the court that the clients of the "France International" department held in the books of UBS AG cash accounts, securities accounts and foreign currency accounts which they used to conduct or have conducted within the framework of management mandates. financial investment operations: this state of affairs is confirmed by the documentary evidence contained in the regularisation files drawn up by Mr Lennart BRAG and Mr Pierre SACHET and submitted by the civil party: any purchase or sale of foreign currency or securities and financial instruments. that the facts in question constitute repeated operations of concealment, investment and conversion, relating at least in part to the same funds, and carried out over a long period, forming an indivisible whole;

 

Whereas Council Directive 2003/48/EC on taxation of savings income in the form of interest payments adopted on 3 June 2003, the so-called Savings Directive on taxation, applied to the Swiss Confederation as from 1 July 2005 by virtue of a bilateral agreement concluded in Luxembourg on 26 October 2004 by the European Union and the Swiss Confederation. The agreement, which was in force until 31 December 2016, provided for the introduction by Switzerland of an unprecedented withholding tax system on the savings income of European clients, while preserving banking secrecy: it offered an alternative to holders of funds in the books of Swiss banks: either a flat-rate withholding tax initially set at 15% and raised to 20% and then 35% of the interest generated. This was done by the FTA (Federal Tax Administration), which transmitted 75% of the deduction to the tax administration of the saver's country of origin; or by the bank informing the FTA of its identity and the financial income received, with the FTA informing the tax administration of origin that certain financial products were outside the scope of the agreement of 26 October 2004. In addition, the system organised by the said agreement was not applicable to legal entities: it was therefore easy to prevent the levy on the interest referred to in the above-mentioned agreement by interposing either an offshore company, a trust or any other entity of which the taxpayer was the economic beneficiary;

 

Considering that employees of the "France International" department of UBS AG reported in a single voice that the bank proposed to its European clients, in order to avoid withholding tax, the use of an interposed legal entity: Beatrice BRETHOMME, a senior executive of the DGFIP.

 

Béatrice BRETHOMME, a senior official of the DGFIP, testified that the advisers orally told the agents of her department that it was on the advice of Swiss banks that their clients had set up offshore structures, particularly after the entry into force of the savings directive: thus, Mrs Fateneh Naver ADIB, widow of MADANI, living in Paris, had set up a legal entity on the advice of the Swiss bank. This foundation held shares in a company located in the Bahamas and held the account opened in the books of UBS AG in Zurich (credit balance of USD 1 025 516 as at 31 December 2009);

 

Considering that it appears from the statements of the defendants at the hearing that the fact that the books of UBS AG housed accounts not declared to the tax authorities was known; that Patrick de FAYET declared that he knew that there were accounts without knowing the number; that Olivier BAUDRY declared that the clients who opted for simple management were not all declared;

 

Considering that Serge HUSS stated: "We, French CAs, could not do offshore. This is why the Swiss CAs offered this type of product, what the Swiss call "simple money", money without problems. This should not be confused with "complex money", money where there were tax problems that were perfectly legal"; that Jean-Michel BENOIST stated: "In my memories there is simple money and complex money. I can tell you that one is for undeclared money and the other for legal money but I can't really tell you which is which. I think complex money is for/'legal money'; that Anne LONGIN-GUYOT said: 'complex must be a delocalised French account and simple is an undeclared account'; that Nicolas LONGON! said about the expressions simple accounts and complex accounts: 'I have heard this terminology before. I know that one concerns declared money and the other concerns undeclared money";

Considering that Nicolas LE FORESTIER declared: "(Most accounts in Switzerland are not declared, and are called at UBS "SIMPLE MONEY" as opposed to the term "COMPLEX MONEY" which designates bank accounts declared to the tax authorities"; that in an email of 12 December 2008 addressed to his counsel, he wrote: "knowing that 90% of their French clients have undeclared accounts in their books, it is hard to imagine that the French clients recommended by our Swiss "friends" all, without exception, hold only declared accounts. .. " ;

 

Considering that Philippe MAGNIN-FEYSOT, who joined UBS AG in Geneva in 2000 and worked there until June 2012, stated: "if it is the proportion of undeclared accounts compared to declared accounts, I would say that it is largely in favour of undeclared accounts, but without giving you exact proportions";

 

Considering that Patrick de FAYET stated: "Simple money is undeclared money that is in Switzerland for which there is no tax declaration as opposed to the complex which requires the production of elements intended for the account holder's tax declaration"; that Hervé d'HALLUIN stated: ". ON SHORE amounts are assets that are declared to the tax authorities and OFF SHORE amounts concern assets that are not declared. ( ... ) Simple money is undeclared money on which there are no tax optimisation constraints. Complex money is subject to tax constraints. This is Swiss jargon (...) During training sessions or events we had the opportunity to discuss this with Swiss CAs. They said that they had to respect specific rules when they travelled to France, for example, not to be in possession of compromising documents on French territory, in particular nominative documents on undeclared assets;

 

Considering that the representative of UBS AG, questioned by the investigating judge, stated:

"THE JUDGE: For some people (...), "simple money" means in UBS jargon money in Switzerland not declared to the French tax authorities, and "complex money" means declared money. Do you confirm this?

 

ANSWER: It is not a terminology that we encourage, but in broad terms, we can say that these statements are correct; with this important nuance that "simple money" is money that we do not know if it has been declared or not, whereas "complex money", we know that it has been declared;

 

Considering that these statements are corroborated by an exchange of emails of 10 November 2008 between Olivier FORGUES and Philippe CHARRIERE, a Swiss business manager, in which the former asks the latter: "Can you remind me of the difference between a Simple account and a Complex account (I still sometimes mix the two...)"; Philippe CHARRIERE replies "Complex = declared; Simple = not declared to the tax authorities. very easy to understand";

 

Considering that it appears from the above that UBS AG distinguished in its books between accounts declared and accounts not declared to foreign tax authorities; that it therefore voluntarily allowed French taxpayers to launder the proceeds of tax fraud;

 

Considering that, contrary to the written submissions and assertions of the representative. Mrs. NOVAKOVIC, who was not in office at the time of the facts, before the court, the offence of money laundering is established in all its elements against the parent company;

 

Considering that the Court refers to the elements of the section "Recall of the facts and the procedure" which, notably through the testimony of Witness 119 and BIRKENFELD, detail precisely the mechanisms of conversion;

 

Considering that, with regard to these two witnesses, the strongest criticisms were formulated by all the appellants and respondents; that grievances relating to their lack of good character were stated;

 

Considering that, with regard to BIRKENFELD and as has already been explained, the latter, although condemned and likely to feel strong resentment towards the bank which employed him, nevertheless gives precise and credible descriptions of the conversion mechanisms: with regard to witness 119, it is clear from the debates that he was one of the bank's executives;

Considering that it was mentioned by one of the counsels of UBS AG that this person was identified as having committed the most indelicate acts; however, since it is not possible to go beyond the stage of allusive suggestions, the Court must note that this testimony is also precise and does not come from a person who is disordered in his expression;

 

Considering that these two witnesses reveal an illicit method of laundering funds by detailing mechanisms which, when analysed (the Court recalls once again that it included these two testimonies in its judgment) constitute even more precise descriptions of hidden schemes which are known only to those familiar with the "offshore" banking method of laundering funds derived from tax fraud;

 

Considering that the possible duplicity of witness 119 with BIRKENFELD is not demonstrated and is difficult to imagine given the fact that they were not located on the same continent and that no element demonstrating a concerted effort between them was introduced into the proceedings;

Considering that these testimonies, which are precise in their description of the illegal mechanisms set up by the parent company, corroborate the reasons already mentioned in the grounds of the judgment;

 

Considering that, as regards the imputability of the offence of money laundering within the parent company, its responsibility must be sought in view of the management bodies detailed on page 135 of the judgment with regard to canvassing; that these decision-making bodies conceived, decided and then organised and implemented a banking policy translated into the facts as previously characterised by the court and the tribunal, and that in so doing the legal person worked directly on its behalf to contravene French law, which is the only law applicable, as has already been judged;

 

Considering that in reality. Considering that not only did the bank's management bodies adopt this policy, but they also developed a system rightly described as "systemic" aimed at laundering: In fact, it was decided to use the French subsidiary as a "Trojan horse" in order to get the French CAs to canvass clients concerned about tax evasion and to allow its own CAs to canvass clients in France with the aim of getting them to make a commitment, materialised in the above-mentioned conditions, to open bank accounts and carry out conversion operations, the execution of which was carried out by the bank's department specially organised for these purposes: In this respect, reference is made to the conversion procedures detailed in the lawsuit, which had been revealed by the aforementioned witnesses, in order to re-examine the effectiveness of these conversion procedures;

 

Considering that on these procedures, the court recalls the testimony of the head of the Bordeaux agency. BENOIST who was never implicated and who defended himself by saying: "I know that undeclared accounts in Switzerland exist but I don't want to know about them" and then "I know how it was done, for example when Juan MORENO (a Swiss CA), who is in Switzerland, came to France to meet with prospects";

 

Considering that it will be recalled the testimony of a former Swiss business manager from 2008 to 2012 MAGNIN-FEYSOT who stated: ".s'af!issant de la prooortion de comotes non déclarés par rarmort aux comf}tes déclarés. ie dirai aue c'est largement en faveur des comotes non déclarés mais sans vous donner de orooortions exactes ": aue pour LE FORESTIER. lui ancien CA francais : " 90 % -of the French clientele of Swiss banks had undeclared accounts";

 

Considering that these testimonies as well as others trace the practices of the bank and the intrusive practices of the Swiss CAs (which does not exclude those described above of the French CAs). Whereas it is obvious that this double scheme, acting via the subsidiary to import undeclared funds in order to convert them into the ad hoc structure, has flourished for more than seven years with the means and facilities provided by the exercise of banking activity;

 

Considering the control of this defendant over its subsidiary, the testimony of the defendant from HALLUIN will be recalled, which relates the replacement in 2004 of the manager of MONTESQUIOU because he no longer gave him satisfaction by POYET, described as a "puppet of the Swiss", and whose decision-making autonomy in the area of relations with the parent company and the management of the CAs seemed limited, according to what the branch manager BERKOUK declared: That these facts. change of manager. appointment of a dependent person. (the Court has already mentioned this state of dependence of the subsidiary) reveal that at the stage of the management bodies, the establishment at the head of the subsidiary of a manager assuming the implementation of this policy of "systematic fraud" was one of the management and administration movements of the group that the parent company and its subsidiary constituted in order to achieve the concrete realisation in France of its policy concealed from the authorities of the country concerned. In this regard, the Court of Cassation has ruled that it is not necessary to have a legal personality in France, but to collect funds from defaulting tax residents with the systematic nature of the facts and which is one of the perennial characteristics of the operation of the UBS AG bank;

 

Considering that it is particularly significant for the Court that while, via Raoul WEIL in particular, described in the present judgment as keeping himself informed of the subsidiary's internal disputes, the management bodies, necessarily informed of the challenges formulated internally by certain branch managers, the head of audit in office until 2007, chose not to change anything in this double infringement scheme: that this persistence in carrying out its practices is the basis for the prosecution in all its elements against it;

 

Considering that the two aggravating circumstances of the offence of money laundering are characterised by this double observation of the duration of the facts and the status of the parent company UBS AG as a bank;

 

Considering that, in the end, the parent company UBS AG received in its accounts the assets of French tax residents who had failed to declare themselves to their tax authorities, but, on behalf of this systemic organisation, carried out the conversions described above: That for these reasons, which are complementary to those of the court, the guilt of UBS AG is established; that the judgment is confirmed;

 

Considering that the question of the guilt of the natural persons, executives of the parent company, for the offence of aggravated money laundering remains;

 

Considering that, with regard to Raoul WEIL, the decisive reason for the court's decision is to find that there is no evidence of his direct involvement: as far as the court is concerned, this finding remains valid, since no relevant argument to the contrary or efficient documentary basis has been produced: consequently, WEIL's acquittal will be confirmed: the court specifies that the Swiss Confederation's opposition in principle to any collaboration in the elucidation of facts relating to tax fraud has, in all likelihood, deprived the French justice system of the means to carry out its task. The Court of Cassation has not been able to provide the French justice system with elements that could have led to a different approach, but the requirements of the criminal trial as in force in the European judicial area require that the personal conviction be supported by a factual, documentary or testimonial basis. It cannot be taken any further in the sense of guilt with regard to the respondent: That his acquittal is confirmed: the Court recalls its reasoning with regard to the collegial decisions taken (see above);

 

Considering with regard to Dieter KIEFER that his personal participation in the offence of aggravated money laundering is not characterised with the degree of precision required by French evidentiary law; that he is in the same situation as Raoul WEIL;

 

Considering that the court must make this finding if the concept of the establishment of the policy described above and its implementation leading to a systemic recourse to illegal conversion is established vis-à-vis the parent company. Dieter KIEFER cannot be accused of a specific fact that is directly attributable to him: that the judgment will be partially final and that he will be dismissed from the prosecution on the grounds of aggravated money laundering;

 

Considering with regard to BAUDRY and WICK that if these two defendants, who are at a lower level of decision-making, participated in the implementation of illegal canvassing in France, their personal and direct involvement in money laundering is not denied: it must be emphasised that both WICK and BAUDRY were not part of the management bodies of the bank that rightly stopped the practices sanctioned today;

 

Considering that it must also be pointed out by the Court that the accusation of money laundering made by a number of witnesses against the executives of the Swiss bank does not highlight any personal participation by these two executives in the money laundering activities, which were carried out at a higher level than theirs and in departments of the bank of which they were neither members nor directors;

 

Considering that the operations on the funds were the responsibility of the "Wealth Planning" department and not of the "France International" department: that neither WICK nor BAUDRY were part of this department: that the tasks they carried out within the "France International" department did not place them in a position to personally assist in investment, conversion and concealment operations: that for these reasons, the judgement will be overturned and they will be dismissed;

 

Considering that, with regard to the subsidiary, the court retained on page 196 of its decision as the first element the fact that it had recommended to its parent company clients wishing to invest undeclared assets, by organising events and by placing logistical means at the service of its parent company;

 

Considering that at the end of the debates, the court must recall a lack of correlation between the events and the concomitant or a posteriori signature of mandates or any other document prior to the opening of accounts in Switzerland;

 

Considering that if it was stated by the court that these events were the occasion for meetings between prospects and business representatives, the stage of the conclusion of agreements has never been formally established with the necessary degree of precision: for the court, it is the procedures revealed by BIRKENFELD and witness 119 that were put into practice: the events? In the Court's view, the procedures revealed by BIRKENFELD and the witness were put into practice: the events ? which were strongly encouraged by the parent company ? were a useful opportunity or pretext for the Swiss CAs to justify their coming to France and to organise discreet meetings with the concern, detailed by the Court, to leave no trace;

 

Considering that it is true that the subsidiary made available to the parent company its logistical resources, both human and material: however, the documentary basis demonstrating for the period of time retained for the prosecution that this provision exceeded the framework of illegal canvassing is lacking: it must be emphasised by the court that only three documents tend to demonstrate that the French subsidiary may have been involved in the process of placing undeclared assets, have been apprehended;

 

Considering that the hypothesis of the destruction of documents can be envisaged, but that in addition, two elements are exculpatory of the subsidiary's guilt: the first relates to the heterogeneity of the practices in place in the subsidiary's various branches:

- In the Bordeaux branch, despite being subject to intrusions by a Swiss CA MORENO, the director was not caught out when he stated that he had given the necessary instructions to refuse any compromise

-Considering that in the one in Lille, events were organised by d'HALLUIN for the purpose of opening accounts in Belgium and Luxembourg

 

Considering that the court cites these two agencies as an example of the absence of instructions given by the subsidiary's Nantes headquarters to participate beyond the canvassing phase in the conversion and investment mechanisms set up in Switzerland by the parent company;

 

Considering (second element in defence) that there is a lack of evidence to establish the involvement of the subsidiary's management bodies in the money laundering process: it is stated that the fact of having acted as a screen for the parent company in its collection of French tax residents and the fact of having assisted the parent company in this task certainly facilitated contacts between prospects and CAs, to use the terminology in force, but did not contribute directly to the money laundering offence;

 

Considering that the behaviour of the subsidiary in assisting the illegal canvassing did not exceed this point, both in terms of time (the laundering follows the canvassing) and geography (the laundering was carried out by the dedicated structure in Switzerland). The fact that the presence of the subsidiary within the parent company's bank at the time of the canvassing or of the staff at the time of the canvassing) is distinct from the stage of the laundering: if the subsidiary acted in breach of the law at the stage of what could be called "the collection of candidates for laundering", this constituted an indispensable intervention in the realisation of the process of collecting illicit funds as intended by the parent company. it cannot be said to be personally involved in the design and implementation of the laundering processes;

 

Considering that the documentary basis is lacking on this point; that this must be noted;

 

Considering that the guilt on these grounds is not sufficiently proven: the court is aware of the difficulties encountered by the investigating judges in the search for evidence but must draw the inherent consequence of the fair trial where reasonable doubt is not exceeded: the court recalling the close managerial and financial dependence of the subsidiary on its parent company: the judgment will be overturned and UBS SA will be dismissed from the prosecution on the charge of complicity in aggravated money laundering;

 

On the sentences

 

UBS AG

 

Considering that this legal entity is persuaded to have developed and implemented a double illegal process: to canvass French tax residents wishing to evade taxes while this was forbidden and then to launder the funds received; that it was absolutely forbidden to proceed in this way;

 

Considering that the breaches of Community and French domestic law, noted by the court on page 201 of its judgment, are proven, lasted for more than seven years and involved (this is an estimate) a sum of around eight and a half billion euros;

 

Considering that these facts were committed both in France and in Switzerland and that the Court wishes to recall that the mechanisms fomented by the Swiss bank consisted in penetrating the French market without the knowledge of the French authorities, who were only able to intervene in the subsidiary a posteriori;

 

Considering that it is clear from these constant facts that this legal person deliberately chose to leave the Swiss geographical framework in order to contravene not only domestic law but also Community law in France;

 

Considering that this stratagem is not admissible: by transforming a subsidiary into a simple "Trojan horse", this bank, which never seems to have reconsidered the merits of its practices, must be sanctioned according to the seriousness of the facts which result from :

 

the nature of the process implemented; its duration:

 

the importance of the prejudice :

 

its total infringement of EU and French law;

 

Considering therefore that the Court must impose sanctions appropriate to this intrinsic gravity;

 

Considering that the court must then recall that this bank is of foreign law and that, given the 'reticence' of the Swiss authorities with regard to criminality linked to the recovery of the proceeds of tax fraud, the Paris Court of Appeal has the objective of pronouncing penalties that will be enforced;

 

Considering that consequently, in view of the repressive texts, a fine of 3,750,000.00 € will be imposed;

 

Considering that the court recalls that it is not legally obliged to give reasons for sentences that it does not pronounce: it will simply be mentioned that 'in the state of the case law of the criminal chamber concerning article 324-3 of the criminal code, this cannot be applied to the case in question, given the indeterminacy of the exact amount of the proceeds of the laundering;

 

Considering that in addition to the fine, the publication of a judicial notice will be added, the terms of which will be explained in the operative part, since it is important to make

-Considering that the fine will be accompanied by the publication of a judicial notice, the terms of which will be explained in the operative part, as it is important to make known outside the judicial arena constituted by the public hearing the extent and nature of the criminal behaviour of UBS AG, for two reasons: to prevent any further intrusion by this banking establishment into regulated markets, and to inform the public of the consequences of violating legal provisions, as in the present case;

 

Considering that it must be recalled that the institutional choices made by this bank have disturbed the French and European economic order, as noted by the court: money laundering has been incriminated in France since 1996 and the first convention, although not ratified by the Swiss authorities, has been effective in Europe since 1990;

 

Considering that Articles 131-21 paragraph 6, 131-39 8° and 324-7 12° of the Criminal Code empower the criminal judge to confiscate all or part of the assets of a legal person convicted of money laundering;

 

Considering that in order to comply with an order of the investigating judges dated 23 July 2014, UBS AG paid the sum of one billion one hundred million euros (€1,100,000,000.00) into the hands of the registrar of advances and receipts of the Paris judicial court by way of a guarantee; that these funds constitute part of the property of the Swiss bank;

 

Considering that the facts are (the Court recalls) of particular gravity; that the investigation and the debates have established that UBS AG based part of its worldwide success during the period of prevention within its Wealth Management International division, on the conquest of a clientele that did not respect its tax obligations, to whom it provided its banking services that were conducive to opacity and dissimulation; UBS AG told the US Senate Select Committee on 14 July 2008 that the assets under management of US residents amounted to CHF 18.2 billion or USD 17.9 billion; that on the French market, it recruited several tens of thousands of unscrupulous taxpayers; according to the latest figures communicated by the DGFIP to the court through the French State's counsel, which take into account the work carried out by the STDR between 30 September 2015 and 12 February 2021, the updated number of regularisation files amounts to some 16,789, including 1254 under the Woerth Unit, and 15,443 recorded up to 31 December 2017, the deadline for filing rectifying tax returns, and processed by the STDR, broken down into single-bank files for 10,985 and multi-bank files for 4,458 ; that according to the information communicated by the tax authorities on the amounts of assets entrusted by French taxpayers and having given rise to rectifying declarations, using the latest figures updated to 12 February 2021, the assets regularised with the French tax authorities amount to a total of €9,592,949,261; that among the documentary elements communicated by the German tax authorities to the DGFIP, two tables, drawn up with spreadsheet software, presented respectively the situation of the holders of 34,733 and 38,330 accounts domiciled in France on 1 July 2006 and on 30 November 2008; that the assets deposited in all the accounts amounted to a total of CHF 16,767,464,417.12 on 1 July 2006 and to a cumulative sum of CHF 13,150,203,452 on 30 November 2008;

 

Considering that UBS AG, which was formed in July 1998 from the merger of the Union of Swiss Banks and the Swiss Bank Corporation, is the leading banking institution in the Swiss Confederation; that, according to the financial communication of Swiss institutions, it was the leading private bank in 2019, with USD 903 billion in assets under management, while its runner-up, Pictet, managed USD 576 billion; that UBS AG has established itself as a global bank in the field of asset management

 

Whereas UBS AG, with a share capital of CHF 385,840 million, is a remarkably profitable company; whereas its published results for the third quarter of 2021 of UBS AG mention a net profit of USD 2.3 billion; whereas in the first nine months of 2021, it had a net profit of USD 6.1 billion; whereas in 2020 its net profit amounted to USD 6.6 billion; whereas in that year its assets amounted to more than USD 1,000 billion

 

Considering that the penalty of confiscation constitutes the necessary complement to the fine in order to punish UBS AG to the extent of the damage caused to the interests of the French public treasury and the gains made by the establishment from its French clients who had evaded their tax obligations; that the court recalls that in February 2009, the institution agreed to a moratorium with the Department of Justice and the US Securities and Exchange Commission (SEC) in which it agreed to pay a sum of USD 780 million in return for the abandonment of the lawsuit brought in respect of its off-shore asset management activities before the district court of Miami (Florida);

 

Considering that the confiscation of one billion euros decided by the court, which corresponds to one-sixth of the profit of the financial year 2020, satisfies the principle of necessity and proportionality by causing a reasonable infringement of the right of ownership;

 

UBS SA

 

Considering that this bank has for years disregarded the legal provisions relating to canvassing: that the European directive relating to the compulsory possession of a European passport will be recalled: that respect for these rules, which are elementary and accessible to everyone, has obviously been deliberately ignored by the bank's management for years in order to allow the parent company to canvass and to approach clients who are residents of France;

 

Considering that it will be recalled that the French subsidiary set up illegal agreements between its business managers and those of the Swiss bank;

 

Considering that it will be recalled that this complicity in canvassing concerns the banking sector and presented an obvious risk for national interests: that of facilitating tax fraud and its laundering;

 

Considering that these acts of complicity were extended in time and assumed in practice by the successive directors of the bank from 2004 onwards

 

Considering that it will be recalled the atvPiQue management methods through the "milk books" and their almost total dissipation when the French control authority intervened;

Considering that the obvious seriousness of the offence committed is proven;

 

Considering that the penalties must at the same time, within the legal limits, have the effect of immediately punishing and preventing the repetition of acts prejudicial to the economic interests of the national community represented by the State in this case

 

Considering, with regard to the risk of repetition, that the court must note that the bank was represented before it by the new director and one of the members of the senior management in office at the time of the facts: without interfering in the operation of UBS SA, this presence may pose a question as to the assimilation by this banking establishment of the necessary respect due to the law

 

Considering that in order to achieve this first effect, the court condemns the bank UBS SA as a principal penalty to a fine of 1.875.000,00 €;

 

Considering that in order to achieve the second effect, the court orders the publication of a judicial notice, the details of which will be specified in the operative part;

 

Considering that the judgement will thus be infinite on the penalties with regard to these two legal persons;

 

Dieter KIEFER

 

Considering that with regard to Dieter KIEFER, his culpability is clear with regard to the illegal canvassing committed between 2004 and 2008;

 

Considering that this high-level executive, who was necessarily informed of the regulations and legislation in force in the European Union, not only exceeded his duties as Chairman of the Supervisory Board of the French subsidiary in that he was not aware of the regulations and legislation in force in the European Union, but also that he was not aware of the regulations and legislation in force in the European Union. Considering that this high-level executive, who was necessarily aware of the regulations and legislation in force in the European Union, not only exceeded his duties as chairman of the supervisory board of the French subsidiary in that these served as a screen to enable him to commit the infringement for which he was convicted, but also committed these acts for nearly four years: It should be recalled that he was in charge of the French sector among other activities: That he moved around the French territory at the time: That he had knowledge not only of the subsidiary's operations at the management level, but also of the practices of the parent company: That the statements of the directors of MONTESQUIOU and FAYET, who implicated him, will be recalled;

 

Considering consequently that, notwithstanding the partial acquittal pronounced by the court, two types of sentence must be pronounced against this defendant: the first of 12 months' suspended imprisonment as a warning from the French justice system and the second of a fine of €300,000.00 pronounced by the court in order to ensure that the sanction retains its immediate character;

 

Considering on this last point that the court notes that it has not been seized of any dispute as to the impossibility for KIEFER to pay a criminal fine;

 

Philippe WICK

 

Considering that Philippe WICK was placed at the head of "France International" and that for years he accepted not only to interface with the subsidiary but also to intervene directly in France

 

Considering that this defendant was the linchpin of the atypical employment of Mrs DURET;

 

Considering that he also worked on the equally atypical operation of the

Considering that he also worked on the equally atavoidable method of operation of the "milk books", a management method that is intolerable in countries where banking law must be written down and must give rise to traceability;

 

Considering that the seriousness of the facts committed by Philippe WICK makes it necessary to pronounce two sentences: one as a warning from the French justice system of 6 months' suspended imprisonment and an amount of €200,000.00 so that the sanction retains its immediate character as a sanction;

 

Considering on this last point that the court notes that it has not been seized of any dispute as to the impossibility for WICK to pay a criminal fine;

 

Olivier BAUDRY

 

Considering that Olivier BAUDRY, who has been a manager for many years within the parent company, succeeded Philippe WICK at the head of the "France International" division and, without changing anything, has taken up the same illegal practices as his predecessor;

 

Considering that this defendant, who has never questioned the legality of his actions, particularly in France, because he went there, makes it essential, given the seriousness of the intrinsic facts committed, to pronounce two sentences: one, as a warning to the French justice system, of six months' suspended imprisonment and a fine of €200,000.00 so that the sanction retains its immediate character as a sanction;

 

Considering on this last point that the court notes that it has not been seized of any dispute as to the impossibility for BAUDRY to pay a criminal fine;

 

Patrick de FAYET

 

Considering with regard to Patrick de FAYET that the sentences pronounced by the court on valid grounds must be confirmed: it will be recalled that he acted for years as an interface with the managers of the parent company: he was also the one who ensured the implementation and operation of this literally amazing institution for a person evolving in the world of the "carnets du lait" bank;

 

Considering therefore that Patrick de FAYET was sentenced to the appropriate penalties, the judgement will be confirmed: the court partially reforming the sentences pronounced on the three other natural persons who are Swiss nationals;

 

On the civil interests

 

Considering that the admissibility of the French State to act is established in law and jurisprudence;

 

Considering the extent of the harm actually suffered as a result of the money laundering offences having been committed over a period of time exceeding seven years

 

Considering that it must be referred to the constant facts that the accounts of the French taxpayers were managed by UBS AG in a dedicated department and that this bank, which was convicted at the time, has always refused both before the investigating judge and before the court to communicate the amount of assets under management by "France International";

 

Considering that this unjustified refusal under French law alone has, on the one hand, obliged the French State to carry out steps and research that have resulted, in particular, in communications to the investigating judge during the investigation procedure;

 

Considering that, according to the documentation submitted by the civil party, the undeclared assets are close to or even exceed the amount mentioned in the referral order, the figure put forward being more than 9 billion euros;

Considering that the Court does not intend to compensate the French State for the sums evaded from the tax authorities, but quotes this figure in order to determine the quantitative importance of the laundered funds;

 

Considering that the Court is certain that the State services, in order to identify the assets hidden abroad, carried out a significant number of investigations and searches by its agents, which resulted in operating costs corresponding to the performance of these tasks;

 

Considering that it must be recalled that the French State had to use its own resources, without the assistance of the UBS AG bank, to search for several thousand bank accounts that had not been declared; that this obliged it to carry out numerous cross-checks based on the situations of many French nationals or French tax residents; that the State was thus obliged to implement the procedures known as the right of communication, international administrative assistance and cooperation between administrations on numerous occasions;

 

Considering that the State's agents had to be paid to carry out these tasks: that in so doing, the financial cost of the State's services increased: that, moreover, the conversion mechanisms implemented in Switzerland by the bank UBS AG forced it to carry out specific analysis and research work in order to assess the extent of the money laundering acts committed;

 

Considering then that, in the particular case, the acts of concealment and misrepresentation inherent in money laundering operations have made the verification mechanisms that the administration is entitled to implement vis-à-vis taxpayers even more difficult: given the time that has elapsed, the acquisition of the tax statute of limitations appears to be a clear-cut case: as a result, the State has suffered a loss of opportunity, which is described exactly in the appeal pleadings on page 107 of the pleadings filed;

 

Considering lastly that it is topical to recall that the offence of money laundering, the purpose of which has been proclaimed since 1990 at the international level, is to protect the economic order: that the actions of the UBS AG bank have brought discredit on the French State's measures aimed at preventing the appearance of this criminal phenomenon. Considering that the French State's actions have brought discredit on the French State's measures aimed at preventing the emergence of this criminal phenomenon, which is serious and unanimously (with the exception of non-cooperative States) analysed as a disrupter of market economies: CIU' indeed, the concerted practices of the condemned bank had an obvious incentive effect contrary to this objective of prevention;

 

Considering that the plaintiff's claims are the consequence of the "systemic fraud" specifically committed by this bank.

 

Considering that for these reasons the sum of 800,000,000.00 € awarded by the court must be confirmed, no relevant legal or motive reason being given on this point by the defence: on this essential point: the money laundering committed necessarily caused the damage for which reparation is sought, given the constant practices, extended in time, conceived, organised and implemented;

 

Considering that the court recalls that, given the partial acquittals pronounced for the offences of money laundering, only UBS AG is liable for this sum, which corresponds to the above-mentioned prejudices, which were directly and effectively suffered: that the judgement will therefore be confirmed, as well as the sums owed by UBS AG under Article 475-1. the court discharging all the other defendants convicted of all sums in respect of both damages and procedural costs: that it will thus be pronounced and proceeded with a partial reversal of the civil provisions;

 

Considering that, with regard to the costs of the proceedings incurred before the court, it is appropriate to allow the civil party to receive the sum it is claiming, i.e. €20,000.00: that the bank UBS AG will be ordered to pay this sum, the other requests being dismissed.

 

FOR THESE REASONS

 

THE COURT,

 

Ruling publicly and contradictorily after having deliberated:

Receives the appeals;

 

Having regard to the judgment of this court dated 28 June 2021 before refusing the transmission of the priority question of constitutionality filed by UBS AG

 

On the exceptions

 

Confirms the judgement on its rejection of the objection of incompetence raised by the defendant Raoul Weil and the bank UBS SA

Partially reverses the decision,

,

Declares that UBS AG is entitled to request the inadmissibility of the evidence on the basis of Article 427 of the Code of Criminal Procedure

Granting this request

Dismisses these documents from the proceedings

 

Recalls that the court did not take into consideration in its assessment of guilt and penalties the documents transmitted through administrative channels by the German and Swiss authorities, which are excluded from the proceedings

 

Confirms for the rest the rejection of the other objections raised as well as the inadmissibility of Philippe WICK. Dieter KIEFER and Olivier BAUDRY to be able to invoke the nullities of the investigation and enquiry procedure

 

Declares inadmissible the objection of inadmissibility raised by UBS SA concerning the witness Stéphanie GIBAUD

 

Confirms the judgement on its rejection of the objections relating to the statute of limitations for the public prosecution

 

On the public action

 

Concerning Hervé d'HALLUIN, confirms the partial acquittal pronounced by the court

 

Dismisses Hervé d'HALLUIN from the proceedings for the offence of complicity in canvassing for the period between 2004 and 15 December 2008

 

Concerning Patrick de FAYET. confirms the judgment in all its provisions both on the partial conviction and the sentences pronounced

 

Offence provided for and punishable under Articles L.353-2 and L.353-4 of the Monetary and Financial Code and 313-1 of the Criminal Code

 

Concerning UBS FRANCE SA, on the issue of guilt, partially reversing the judgment referred to

 

Dismisses UBS FRANCE SA for the offence of complicity in money laundering

 

Confirms the remainder of the conviction for the offence of complicity in canvassing by an unauthorised person

 

Confirms the sentences and orders UBS FRANCE SA to pay a fine of €1,875,000.00

 

Orders the imblication of the following judicial communication: "By judgment of the Paris Court of Appeal. chamber 12 of division 2. dated 13 December 2021, the bank UBS FRANCE SA, subsidiary of the Swiss bank UBS AG, was found guilty of complicity in banking and financial canvassing by an unauthorised person, an offence committed from 2004 to 2009. and sentenced as the main penalty to a fine of €1,875,000.00 pursuant to Article 313-1 of the Criminal Code.

 

Offence provided for and punished by articles L.353-2 and L.353-4 of the monetary and financial code and 121-6, 121-7 and 313-1 of the criminal code

 

Concerning Raoul WEIL

 

Confirms the judgement on his acquittal Concerning Dieter KIEFER

 

Partially upholds the judgment on guilt

 

Dismisses Dieter KIEFER from the proceedings for the offence of aggravated money laundering

 

Confirms the judgment on the guilt of the charge of unauthorised canvassing of banks and financial institutions

 

Partially reforming the sentence, sentences Dieter KIEFER to a 12-month suspended prison term

Confirms the judgement on the sentence to pay the fine of €300,000.00

 

Offence provided for and punishable under Articles L.353-2 and L.353-4 of the Monetary and Financial Code and 313-1 of the Criminal Code

Concerning Olivier BAUDRY

 

Dismisses Olivier Baudry from the proceedings for the offence of aggravated money laundering

 

Confirms the remainder of the judgment on the guilt of the charge of canvassing by an unauthorised person

 

Partially reforming the sentences, sentences Olivier BAUDRY to a 6-month suspended prison term

Confirms the judgment on the sentence to pay the fine of €200,000.00

 

Offence provided for and punishable under Articles L.353-2 and L.353-4 of the Monetary and Financial Code and 313-1 of the Criminal Code

Concerning Philippe WICK

 

Dismisses Philippe WICK from the proceedings for the offence of aggravated money laundering

 

Confirms the remainder of the judgement on the guilt of the charge of canvassing by an unauthorised person

 

Partially reforming the sentences, sentences Philippe WICK to a 6-month suspended prison term

 

Confirms the judgment on the sentence to pay the fine of €200,000.00

 

Offence provided for and punished by articles L.353-2 and L.353-4 of the monetary and financial code and 313-1 of the criminal code

 

Concerning the bank UBS AG

 

Confirms the judgment referred to on the finding of guilt. Confirms the sentences.

 

Orders UBS AG to pay a fine of €3,750,000.00

 

Orders the publication of the following judicial notice: "By judgment of the Paris Court of Appeal, Chamber 12, Division 2, dated 13 December 2021, the Swiss bank UBS AG was found guilty of banking and financial canvassing by an unauthorised person, an offence committed from 2004 to 2011, and of aggravated money laundering through habitual assistance with investment transactions. The Court orders that the defendant be sentenced to a fine of €3,750,000.00 and the confiscation of the sum of €1,000,000,000.00 in application of Articles 313-1 and 324-2 of the Criminal Code, as a penalty for the offence committed from 2004 to 2012

 

Orders, as an additional penalty, the confiscation of the sum of €1,000,000,000.00. article of the sum paid on 23 July 2014 to the Paris judicial court as a bond imposed by the investigating judges

 

Offences provided for and punishable under Articles L.353-2 and L.353-4 of the Monetary and Financial Code. 131-21 al.6, 131-39-8. 313-1, 313-7, 324-1-1 and 324-2 (for the penalty only), 324-7°12 of the Criminal Code

 

On the civil interests

 

Confirms the judgment on the admissibility of the French State's application for civil damages

 

Partially reverses the judgement, taking into account the partial acquittals pronounced for the offence of money laundering. Dismisses the French State's civil claim against Dieter KIEFER, Philippe WICK, Olivier BAUDRY and the legal entity UBS FRANCE SA

 

Confirms the remainder of the judgment insofar as it ordered the legal entity UBS AG to pay the sum of €800,000,000.00 in damages to the civil party

 

On the costs of the proceedings

 

Confirms the judgment referred to on the amount awarded to the civil party and that the legal entity UBS AG must pay under Article 475-1 of the Code of Criminal Procedure

 

Dismisses the civil party's claims in this respect against the legal entity UBS AG and the natural persons Dieter KIEFER, Philippe WICK and Olivier BAUDRY

 

ADDING

 

Orders the legal entity UBS AG to pay the civil party French State the sum of €20,000.00 for the costs incurred before the court

Pursuant to Article 475-1 of the Code of Criminal Procedure Dismisses the remainder of the civil party's claims

Pursuant to Article 803-5 of the Code of Criminal Procedure and Article D 594-.

6. mentions that the present decision (and its reasons) have been notified orally today to the defendants or applicants through their interpreter

 

 

This judgment was signed by François REYGROBELLET, president and by Laëtitia PRADIGNA, clerk

 

The present decision is subject to a fixed procedural fee of 169 euros payable by the convicted persons. This amount shall be reduced by 20% in the event of payment within one month:

- from the date of delivery of the decision if it is contradictory.

- from the date of service if the decision is contradictory to be served or by default.

 

 

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