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UBS Given Say In French Data Request

by Ulrika Lomas,, Brussels

28 October 2016

UBS has been granted "party status" by a Swiss court in the ongoing administrative assistance procedures initiated by the French tax authorities, allowing the bank to have a greater say in the handover of bank account data to France.

According to a statement from Switzerland's Federal Administrative Court, which ruled on the matter on October 25 (Judgment A-4974/2016), UBS was granted party status in light of the "special circumstances" of the case. As a result, the Federal Tax Administration must allow UBS to inspect the files and serve it with all final decisions.

The Court noted that the bank has been asked to hand over to France information on an unusually high number of banks accounts linked to French citizens – said to be a five-digit amount.

Normally, financial institutions in Switzerland involved in administrative assistance proceedings act only as a provider of requested information to the FTA and have no right to take part in the procedure as a "party." However, the Court decided to make an exception in this case because the high number of data sets "creates an incomparably high workload to UBS."

Significantly, the Court also granted the bank party status to help protect its reputation, arguing that "the unusually high number of clients concerned by the request for administrative assistance could leave one with the impression that UBS systematically helped clients to evade taxes."

The Court also raised the possibility that the data might be used in criminal proceedings already launched against UBS in France in its reasoning.

However, the Court emphasized that UBS can only challenge the tax authority's final decisions, and not the order to hand over the data in the first place.

"The FAC has not dealt with the question whether the request for administrative assistance itself is admissible," the Court confirmed.

It is believed that the French administrative request, which was sent to the FTA on May 11, 2016, is based on information passed on by German authorities and involves around 45,000 bank account numbers.

TAGS: court | tax | banking | tax authority | France | Switzerland | mutual assistance agreement | Tax

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