30/05/25

SWITZERLAND: UBS Closes U.S. Tax Chapter for Credit Suisse

As published on: leadersleague.com, Friday 30 May, 2025.

Led by Joël Fischer and Eric Stupp, Swiss law firm Bär & Karrer has advised UBS in securing a landmark settlement with the U.S. Department of Justice (DOJ), ending a long-standing tax evasion probe into Credit Suisse. The result: a $511 million settlement and a major legal hurdle cleared for Switzerland’s largest bank.

A painful fiscal chapter ends

On May 5, 2025, Credit Suisse Services AG—an entity now part of UBS following Credit Suisse’s acquisition in 2023—entered a guilty plea to conspiring to aid in the preparation of false tax returns. This plea settles allegations that Credit Suisse violated a 2014 plea agreement with the DOJ related to offshore tax evasion by U.S. clients.

At the time, Credit Suisse had admitted to helping American taxpayers hide assets in offshore accounts and agreed to pay $2.6 billion, later reduced to $1.3 billion. But the DOJ found that such misconduct continued, particularly via accounts opened in Singapore.

A dual-track resolution

The settlement features two key components: a guilty plea involving over 475 undeclared accounts used to hide more than $4 billion in assets from the IRS between 2010 and 2021, and a non-prosecution agreement regarding U.S. clients booked through Credit Suisse’s Singapore office. The latter covered more than $2 billion in assets held between 2014 and 2023, during which the bank allegedly failed to verify clients’ tax compliance.

In total, Credit Suisse Services AG agreed to pay $510.98 million, including penalties, restitution, and forfeiture. The deal effectively closes the U.S. tax liability chapter for Credit Suisse, shielding UBS—which was not involved in the misconduct—from further legal exposure.

UBS as a cooperative actor

UBS, which has absorbed Credit Suisse, emphasized that it was not implicated in the underlying actions and reaffirmed its zero-tolerance policy on tax evasion. The DOJ acknowledged UBS's voluntary disclosure of problematic accounts and its full cooperation throughout the investigation.

The full integration of Credit Suisse into UBS is expected to conclude in 2026. This settlement marks a significant milestone in that process, removing a major legal uncertainty for UBS and its shareholders.

A legacy of litigation

This resolution adds to Credit Suisse’s long list of legal challenges. In 2022, the bank paid $495 million to settle allegations that it misled investors about the risks associated with mortgage-backed securities prior to the 2008 financial crisis. While Credit Suisse’s legacy continues to cast a shadow, UBS—backed by strong legal counsel—appears firmly committed to cleaning the slate.

Bär & Karrer, through partners Joël Fischer and Eric Stupp, played a pivotal role in navigating this highly complex legal and diplomatic case. Their strategic guidance and complete control of involved amounts helped secure a settlement that avoided direct liability for UBS while containing the financial impact. This major deal highlights the international firm’s expertise in cross-border legal issues over more than 11 years, particularly in tax litigation and financial regulation.

Tags

Switzerland Credit Suisse UBS