What happens if a fine is greater than the value of a multi-national company's operations in a country? As $4.2 billion is ~10% of UBS's market cap, does UBS derive more than 10% of its value from within France? If not, might they just abandon operations in the country for the government to seize and avoid paying the fine, or would EU or international-level agreements or courts enforce payment? Anyone know of any precedent regarding such a scenario?
UBS Is Fined $4.2B in French Tax-Evasion Case
41–50 of 73 posts
Re: UBS Is Fined $4.2B in French Tax-Evasion Case
#42What happens if a fine is greater than the value of a multi-national company's operations in a country? As $4.2 billion is ~10% of UBS's market cap, does UBS derive more than 10% of its value from within France? If not, might they just abandon operations in the country for the government to seize and avoid paying the fine, or would EU or international-level agreements or courts enforce payment? Anyone know of any pre…
They'd most likely request European Arrest Warrants for the CEO and most board members and seize all French assets. Then they'd go for the assets in all other EU countries.
Re: UBS Is Fined $4.2B in French Tax-Evasion Case
#43What happens if a fine is greater than the value of a multi-national company's operations in a country? As $4.2 billion is ~10% of UBS's market cap, does UBS derive more than 10% of its value from within France? If not, might they just abandon operations in the country for the government to seize and avoid paying the fine, or would EU or international-level agreements or courts enforce payment? Anyone know of any pre…
If I owed you money and flee in another country, can't you generally sue me in that other country to get your money back?
Re: UBS Is Fined $4.2B in French Tax-Evasion Case
#44What happens if a fine is greater than the value of a multi-national company's operations in a country? As $4.2 billion is ~10% of UBS's market cap, does UBS derive more than 10% of its value from within France? If not, might they just abandon operations in the country for the government to seize and avoid paying the fine, or would EU or international-level agreements or courts enforce payment? Anyone know of any pre…
Court orders can, and are, routinely enforced in other countries. The interested agent goes to country B courts with a decision from country A and asks for a local enforcement order. When granted, this has the same power as a court order from country B. Even if UBS decides to abandon all assets in France and never do business there again, agents of the French state can get the fine from UBS assets in other countries.
Re: UBS Is Fined $4.2B in French Tax-Evasion Case
#45Earlier quoted context omitted.
Right. For context, that's around 9% if their $48 billion market cap. Much worse than sending any one person to jail. Also: in the US, I've heard the "value of saving a life" for some decision calculations to be assumed at ten million dollars. That's $200k per year for 50 years. (In New Zealand, from talking to some civil engineers, it is a lot lower.) At the American price, the fine is worth 420 human lives.
I agree that this is more than a slap on the wrist, but I doubt that it's more effective as a deterrent than jailing the individuals involved. From what I understand, the banking industry is built almost entirely on a Rand'ian "every man for himself" ethos, with little attachment to the company involved. I don't see how you can then hope to incentivize these individuals by fining the company. Except if the suits were…
I wonder if that's the case. I think the source of the problem is people prioritising the short term over the long term, and I'm not sure whether potential jail time in the long run will deter you when your direct environment is pushing you another way.
Instead, if the company risks fines like these, the environment of its employees may start to emphasise derisking more, to prevent them from being hit with new fines.
Of course, this is all just me looking into my crystal ball.
Re: UBS Is Fined $4.2B in French Tax-Evasion Case
#46Another slap on the wrist. No one goes to jail because of Deferred Prosecution Agreements HSBC got fined about half that when they caught laundering money for the Mexican cartels a few years back. True story: HSBC had to design special teller windows because the standard ones were too small to fit the sacks of money that were being brought in and laundered. If you want to know why these guys don't go to jail, pull up…
Those bigger teller windows were appalling, but this was more the actions for a rogue branch/country network than an officially sanctioned policy from senior management.
It does show a lack of controls in place, though.
Re: UBS Is Fined $4.2B in French Tax-Evasion Case
#47Another slap on the wrist. No one goes to jail because of Deferred Prosecution Agreements HSBC got fined about half that when they caught laundering money for the Mexican cartels a few years back. True story: HSBC had to design special teller windows because the standard ones were too small to fit the sacks of money that were being brought in and laundered. If you want to know why these guys don't go to jail, pull up…
I think many would be happy to go to jail and keeo the billions instead.
That might be true for people who would otherwise be desperately poor, but these are not.
Re: UBS Is Fined $4.2B in French Tax-Evasion Case
#48The predicate for this dates back a long way. I believe UBS were offered an initial sum of $1.1b to settle a few years ago and took it to trial [1]
> The judges’ move followed a failed plea bargain between national financial prosecutors and UBS representatives, the first time such an out-of-court settlement was tested in France. French magistrates reportedly offered UBS to settle the case for 1.1 billion euros ($1.2 billion), after considering an initial deal of 2.2 billion euros ($2.4 billion). - 2017
However the basis was
> The assets illegally concealed by French clients in Switzerland between 2004 and 2012 allegedly amounted some 10 billion euros ($10.75 billion).
Another quote puts it at $600billion[2]
I'd love to know the definition of "illegally concealed" in these circumstances
The chances of it being reasonable I'd consider very slim; France is not a reasonable country nor is it run by reasonable people. France is a failing protection racket running out of people to shake down, by and large. When the people who run the socialist party government budget are offshoring their wealth - perhaps your country is fundamentally broken.[3]
[1] https://www.apnews.com/2c7032c7d75a40728395587fd917517e
[2] http://www.ipsnews.net/2012/04/europe-loses-billions-to-tax-...
[3] https://www.bloomberg.com/news/articles/2015-02-17/three-ex-...
Edit: Downvotes without comment. Not exactly productive conversation.
Re: UBS Is Fined $4.2B in French Tax-Evasion Case
#49€3.7B ($4.2B) is last year profit.
Fine is €4.5B($5.1) Here is link to not paywalled article
https://www.reuters.com/article/us-ubs-trial-fraud/ubs-to-ap...
EDIT: Actually fine is €3.7 + €800m in damages.
Re: UBS Is Fined $4.2B in French Tax-Evasion Case
#50Another slap on the wrist. No one goes to jail because of Deferred Prosecution Agreements HSBC got fined about half that when they caught laundering money for the Mexican cartels a few years back. True story: HSBC had to design special teller windows because the standard ones were too small to fit the sacks of money that were being brought in and laundered. If you want to know why these guys don't go to jail, pull up…
Those bigger teller windows were appalling, but this was more the actions for a rogue branch/country network than an officially sanctioned policy from senior management. It does show a lack of controls in place, though.
Senior management must be responsible for the actions of "rogue branch" in an official capacity. When you slip and fall on black ice, you don't sue the janitor.