the fight against money laundering and tax evasion intensifies

In an unprecedented case in France, € 3.7 billion was needed on Thursday against UBS, accused of illegally contacting the wealthy French customers.

3.7 billion euros. It is the fine, of an amount not published in France, which was requested by the indictment against UBS on Thursday 8 November. The largest private bank in the Swiss Confederation is accused of unlawful solicitation of French customers and aggravated money laundering.

A penalty that, even if it had reached this amount in the final verdict, would have remained well below the amounts inflicted in other countries and, in particular, in the United States. The average of the ten heaviest fines issued by the courts or regulators of the market in the United States since the start of the crisis, in 2007, exceeds 10 billion dollars (about 9 billion euros), when it does not reach 90 million of euros in France.

Still, even shy about the gravity of the US authorities, the fight against tax evasion and money laundering or tax evasion – is escalating in France, a sign of greater consideration by the courts and regulators (in our case, the authority French supervisory authority). prudential and resolution) of the damage caused by these frauds. Two of the last major fines were imposed for this reason: in 2017 the Latvian bank Rietumu had to pay 80 million euros (and it was also forbidden for the five year period).

In the same year, the British HSBC inaugurated the new device of the Judicial Convention of public interest, included in the Sapin 2 law, which wants to modernize and strengthen the action of French judges against cross-border financial crime. With this type of transaction, common through the Atlantic, the accused recognizes the existence of the facts but not his guilt, negotiating a sentence with the accusation.

Likewise, Société Générale will pay more than one billion euros to settle two long-standing disputes: investigations into the Libyan sovereign wealth fund and manipulation of the Libor interbank rate.

The war against fiscal fraud is declared

France is not the only one to have declared war on tax evasion. Thus, over 1.7 billion euros of fines were imposed on this land against banks by financial gendarmes and judges of the Old Continent from the beginning of the crisis (out of a total of 8.5 billion euros), including a fine record of 775 million euros in the Netherlands against ING for tax evasion and money laundering.

This severity is also justified by the fact that most of the major European banks have now been hand in hand for money laundering offenses in the last ten years … even in some of the world's most renowned countries. the least corrupt in the world, like the Scandinavian countries.

The latest scandal comes from northern Europe and has produced answers well beyond its borders: European, British and even American investigations have been launched on Danske Bank, which is one of the most important in Europe for years. According to an independent report, the Estonian branch of the Danish bank would have illegally transited around 200 billion euros between 2007 and 2015, mainly from Russia. Nordea, the main bank in Scandinavia, has also been involved in the tumult.

Read (in edition subscribers):

Scandinavia hit by the banking scandal

Improve the European rules

In addition to the Netherlands and Denmark, Spain with Caixabank, Latvia – whose central bank governor has been suspended from office and charged with corruption in June – but also Cyprus and Malta are among the countries that will have to fight money laundering and tax fraud.

Meeting at the beginning of October in Luxembourg, the finance ministers of the European Union committed themselves to improve European standards to combat money laundering and strengthen the resources of the European Banking Authority.

Read (in edition subscribers):

The European Commission wants to equip the fight against money laundering by new means

At the same time, in Germany, the market controller (Bafin) made an unprecedented decision to appoint an auditor entirely dedicated to evaluating Deutsche Bank's progress in the fight against the criminal use of funds (money laundering, financing of terrorism or organized crime). The plant, the largest in Germany, is also the most sanctioned in Europe, followed by UBS and the American JPMorgan.

And the fight against dirty money crosses the oceans: another regulator for taking the bull by the horns, Australia, which has started a series of surveys with its main institutions and, in particular, the Commonwealth Bank . Accused of tens of thousands of violations of the law on money laundering and terrorist financing, the largest bank in the country has had to pay a fine over 450 million euros this summer.

Deregulation on the road through the Atlantic

Ten years after the end of the crisis they provoked, even the banks end up paying the bill subprime. The sale of these risky mortgages turned into financial products is by far the most common reason to sanction US regulators: since 2007, has raised almost $ 180 billion in the United States, or about 160 billion euros. In total, around € 220 billion of fines were issued to banks for eleven years.

In August, the US Department of Justice confirmed the signing of an agreement with the Royal Bank of Scotland for an amount equivalent to more than four billion euros. The British bank had already been heavily penalized in the United States for its practices before the crisis, the institution had to pay in 2017 a fine of almost five billion euros to the Federal Housing Finance Agency and, in 2016, a penalty equivalent to one billion euros to the National Credit Union Administration.

However, the banking regulatory framework in the United States, introduced by the Dodd-Frank law in 2010, begins to crack on several fronts, under the pressure of the Trump administration. The latter has appointed a new controversial leader for the Office for Financial Consumer Protection. The US Federal Reserve has announced that it will alleviate stress tests for major banks and reduce the amount of capital required to protect the system.

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