PARIS (Reuters) – A French court will rule on Wednesday whether UBS, Switzerland’s largest bank, helped wealthy French clients evade taxes between 2004 and 2012 and launder the proceeds.

French prosecutors are demanding a 3.7 billion euro ($4.2 billion) fine, while the French state is seeking an additional 1.6 billion euros in damages. Such a combined penalty would be a record for France and exceed the Swiss bank’s 2018 net profit.

UBS denies any wrongdoing and the case could drag on for years if appealed by either side. It has set aside $2.46 billion to cover potential losses from litigation and regulatory requirements.

The French trial follows a similar case in the United States, where UBS accepted a $780 million settlement in 2009 and in Germany, where it agreed to a 300 million euro fine in 2014. UBS last month reported a 2018 net profit of $4.9 billion.

European banks have come under pressure from regulators to tighten compliance with anti money laundering rules since the financial crisis and will scrutinise the ruling, analysts say.

“Bankers in Europe are watching this case closely and will try to assess how exposed they are to similar risk,” Thierry Bonneau, a banking law professor at Paris Pantheon-Assas University, said ahead of the ruling.

The penalty French prosecutors are seeking is high by European standards, although in the United States judges have levied higher fines including the $8.9 billion a U.S. court in 2015 ordered BNP Paribas to pay for violating U.S. economic sanctions against Sudan, Cuba and Iran.

GOLF AND HUNTING

The French court ruling marks the culmination of a seven-year investigation and aborted settlement negotiations.

French prosecutors say UBS sent Swiss bankers to golf tournaments, classical music concerts and hunting parties to solicit new clients illegally, while the bank is also alleged to have helped its clients launder the money involved.

The prosecutors said UBS was “systematic” in its support to tax-evading customers and that the laundering of proceeds from the tax fraud was done on an “industrial” scale.

Under French law, those convicted of money laundering can be ordered to pay a fine totalling half the amount laundered. The prosecution estimates UBS’s customers hid billions of euros from the French tax authorities.

Prosecutors told the court that UBS’s bankers would hand over business cards without any logo and used computers which carried software allowing data to be quickly erased.

Six former UBS executives, including its former head in France, Raoul Weil, could be fined of between 50,000 and 500,000 euros and suspended jail terms if convicted. The six have all pleaded not guilty in the case.

Lawyers for UBS have called the magnitude of the possible penalty “irrational” and “extravagant” and said prosecutors failed to bring material evidence against the bank.

UBS, whose lawyers said the case had become politicised, turned down a settlement offer of 1.1 billion euros, an amount the bank was later requested to pay as a court bond.

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