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.
-