UBS France fined 10 million euros for undeclared accounts

A French banking watchdog announced on Wednesday that it has handed out a fine of 10 million euros to the French branch of Switzerland's UBS. The bank has allegedly helped hundreds of clients put money into undeclared accounts. UBS France has called the fine disproportionate.

The French branch of UBS goes under investigation for aiding tax evasion Reuters/Michael Buholzer

The bank has been placed under formal investigation over charges that it tried to persuade clients to evade taxes by putting their money in suspicious accounts.

The ACP, France’s regulatory arm, found accounts running between 2002 and 2007, which were not declared in France.

Investigating magistrates have sent a list of the 353 people who hold the dodgy Swiss accounts and have requested additional details from Swiss authorities.

UBS France has said the decision by the ACP was contentious and it plans to lodge an appeal before the Council of State.

However, the ACP shot back on Wednesday, saying the bank had been “lax” in taking measures to correct the issue, and that management took 18 months to implement controls to turn the trans-border activity around.

The case came to light after a former UBS employee, turned whistleblower, made allegations against the bank.

Tax evasion has become a hot topic in France ever since April, when ex-Budget Minister Jérôme Cahuzac was investigated for tax fraud.

Cahuzac finally admitted to holding a secret Swiss bank account from 1992, which contained some 600,000 euros.

Ahead of his grilling by a parliamentary probe committee on Wednesday, Cahuzac said he had been made a "scapegoat" for all political corruption.

Cahuzac's questioning comes one day after the lower house of parliament approved a new law on transparency, which will open the assets of parliamentary members to public viewing.