The figure is impressive … and deserves to be put in perspective. Two days after the conviction of the largest Swiss bank, UBS, by the Criminal Court of Paris to a fine of 3.7 billion euros for "Illegal banking canvassing" and "Aggravated money laundering of tax fraud", the look turns to the banks.
A warning to the leaders of the banking sector
The amount of the fine reaches a record, in France. The players in the banking world can be struck by this " strong signal As Benoît Lallemand, secretary-general of Finance Watch, a Brussels-based NGO, which wants to act as a counter-power to the lobbies of the banking sector. It is likely that the court decision will make banks leaders think, especially since the financial penalties were doubled with criminal penalties. Five leaders of the bank were sentenced to six to eighteen months suspended sentences.
Historic fine for Swiss banking giant UBS
" Even if these sentences have a dissuasive effect because of the reprieve, it is a novelty, according to Gunther Capelle-Blancard, professor of economics at Paris 1 University. This is an important step in the work of OECD member countries (1) since the 2008 crisis, when the lack of state revenue has exposed the black holes in financial regulation. Governments then became very sensitive to tax evasion issues ". Since the crisis, there has been progress: banks are obliged to publish their information, and states have committed to share their tax data.
A sector in progress …
" The last years indicate that we are going in the right direction, notes Marc-André Feffer, president of Transparency International, another NGO that fights against tax evasion, particularly in France. I welcome the rise of the national financial prosecutor's office, created in 2013. This institution gives us credibility in the eyes of other Western countries, who thought that we did not take this subject seriously.. "
Europe applies new rules against tax evasion
Another reason for satisfaction with Marc-André Feffer: the creation of the public interest court agreement (CJIP), thanks to the Sapin law, an amicable negotiation with the tax authorities to avoid going to trial.
" In France, we believe in the exemplary nature of the penal sanction, and that which has just been applied is a good thing, He says. But the judicial convention of public interest facilitates the treatment of this type of case and allows not to go to the trial when the parties manage to reach an agreement ". The sanction of UBS attests to the progress made since the crisis of 2008 and a cleansing of the system.
… in a sector far from being cleansed
It is important not to proclaim victory too soon. First of all, because the conviction was appealed, and no one can say to what extent UBS will pay his fine. Bercy remains cautious on the subject.
Above all, the record amount of the fine must be set against the penalties already imposed on the banking sector since the crisis. In the United States, the US regulator inflicted more than 300 billion euros in penalties on its own banks over the period 2009-2016. Uncle Sam is more customary of the "settlement", this transaction which makes it possible not to go to the trial (and of which the CJIP is inspired).
In Europe, the amount rises to 20 billion over the same period. 3.7 billion fine, so it is both much … and little, compared to the trillions of billions generated by fraudulent financial transactions over several years.
A "culture of impunity"
According to Gunther Capelle-Blancard, a real breakthrough would be a change of culture Inside the banks, where you learn to " bypass the regulation ". "Until the 1970s, bankers valued prudence, rigor, seriousness. Then, under cover of positive values like "innovation", ''the audacity'', ''the dynamism'', The behavior limits, even fraudulent, were encouraged, He says. It is necessary to regain a culture of compliance and prudence. In other words, let's remember that if we make progress, we really start from a distance. "
" We are in a culture of impunity ", Benoît Lallemand adds about banking practices. According to him, the root seems to be in the difficulty of the states to achieve greater fiscal harmony. Put in competition with each other, governments have no room for maneuver on globalized capital flows in our financialized economy »
"From now on, political leaders are not accountable to the population, but to markets. If they disappoint them, they take the risk of seeing the financing fall, the borrowing rates increase and flatten the economy He says. In spite of the warning shot, the banks are far from being arrested by the only decision of justice concerning the Swiss banking giant.
The Paris Criminal Court sentenced Wednesday Wednesday, February 20 UBS to a fine of 3.7 billion euros, the heaviest sentence ever imposed by the French justice in a case of tax evasion.
The Paris Criminal Court sentenced Wednesday Wednesday (February 20th) UBS to a fine of 3.7 billion euros, the heaviest sentence ever inflicted by the French justice in a case of evasion f …