Cases

Swiss bank UBS hit by massive EUR 4.5 billion fine

A Paris court has found the Swiss bank UBS guilty of tax fraud. The amount became a record one for similar legal offenses committed in France.

UBS, one of the world’s largest asset management banks, objected to the court ruling. Its representatives said they would file an appeal.

In the view of investigators, the assets that were hidden illegally by French clients in Switzerland from 2004 to 2012 came to about EUR 10 billion.

From the outset, the French Financial Prosecutor’s Office and UBS representatives tried to reach a plea-bargaining arrangement, but the bank refused to settle the matter out of court. In 2017 the agency managed to conclude a similar agreement with the Swiss HSBC Private Bank, which agreed to pay EUR 300 million to the French authorities to dismiss the tax fraud case.

The UBS case was one of the first cases for the National Financial Prosecutor’s Office of France, established in 2013. According to experts, the court ruling will become a precedent for similar cases that are still in the process and may encourage other banks to reach an agreement instead of commencing court proceeding.

UBS has been earlier accused of assisting its clients in tax evasion. Thus, in 2009, the bank agreed to pay USD 780 million to US authorities to dismiss the case on assisting its clients in tax evasion. The credit institution also undertook to provide competent regulators with information on the accounts of clients under suspicion in the United States.

MTS to pay USD 850 million in US corruption case

Russian telecommunications giant MTS will pay USD 850 million to dismiss a corruption case against it in Uzbekistan, which is currently in process.

It’s worth noting that MTS signed a settlement agreement with the US Securities and Exchange Commission and the US Department of Justice. The US Securities Commission also reported on MTS’s willingness to pay a fine. According to the Commission, MTS bribed Uzbekistan officials related to the former president of Uzbekistan who had influence over the Uzbek telecommunications regulatory authority. MTS illegally paid at least USD 420 million to establish and maintain its business. These payments provided MTS with the opportunity to enter the telecommunications market in Uzbekistan, to work there for 8 years and to receive more than USD 2.4 billion in income. It is noted that MTS agreed with the position of the Commission, acknowledged violations of the law, and agreed to pay a fine and confiscation in the amount of USD 850 million. MTS will also be obliged to undergo an independent audit for at least 3 years.

Naftogaz got favorable ruling in Hague case against Russia over assets in Crimea

NJSC Naftogaz of Ukraine received a favorable arbitration decision in The Haguein the case regarding consideration of company assets lost in Crimea.

Naftogaz experts estimate that the value of the assets expropriated in Crimea is at least USD 5 billion. The final amount will be the subject of the next hearing, which is expected to be held this year.

According to estimates by the company’s commercial director, Yuriy Vitrenko, the total amount of indemnity should amount to USD 8 billion (including interest).

The press service of the Ministry of Justice of Russia stated that the Russian party disagreed with the decision adopted by the Court of Arbitration in The Hague.

“The Russian Federation has not taken part in the relevant proceedings and does not acknowledge the partial decision as the Court of Arbitration has no jurisdiction to consider the claim filed by NJSC Naftogaz and others against the Russian Federation,” the Russian Ministry of Justice statement said.

European Commission imposed another large fine on Google

Google, the American corporation, has been punished for abusing its dominant position on the online search services market. The European Commission (EC) imposed a fine on Google in the amount of EUR 1.49 billion for violating European competition rules when placing advertisements on the Internet and highlighting these when searching online. As Margrethe Vestager, the European Commissioner for Competition, stated these violations were set in the contractual obligations dictated by Google to its partners.

In the summer of 2018 the EC imposed a fine on the corporation in the amount of EUR 4.34 billion for violating EU antitrust law: the company was paying large manufacturers and mobile operators for pre-installing Google applications on their devices.

In June 2017 EC imposed a fine on Google in the amount of EUR 2.42 billion for abusing its dominant position among search engines. Google search results related to goods were changed in favor of the Google Shopping service. At the same time, the ratings of competitors’ projects were understated, their proposals were not placed on the first search page for goods and services.

London Court forbid Gazprom from withdrawing assets from England and Holland

On 15 March a hearing was held at the English Commercial Court to enforce the judgment made by the Stockholm Arbitration in a transit case between Naftogaz and Gazprom related to the territory of England and Wales.

It was noted that the court imposed additional obligations on Gazprom not to conceal and not to withdraw its assets from under the jurisdictions of England and the Netherlands.

Moreover, Gazprom was obliged to provide cash collateral to the court’s account or to the escrow account of a bank in London as security for fulfillment of court requirements within 28 days from the date of the petition’s satisfaction.

At the same time, the said ruling did not cancel the obligations of Gazprom not to conceal assets and not to withdraw these from the territory of England.

“If Gazprom fails to comply with the ruling adopted the English Commercial Court, it will become subject to sanctions by way of fines or prosecution of directors or other Gazprom officials,” it was noted in the statement.

In its turn, Naftogaz would then be able to continue unhindered enforcement of the ruling made by the Stockholm arbitration in the territory of England and Wales.

The proceedings, related to Gazprom assets that were “frozen” upon a demand filed by Naftogaz as an interim measure, continue. The ruling adopted by the English Commercial Court has no effect on the mentioned proceeding.