'Severe sentence' for Nina Ricci heiress shows that France is winning its war on tax evasion

Tax authorities anticipate that imposing a one year prison sentence on Arlette Ricci will bring more self-declared tax cheats out

Arlette Ricci must also pay €6.9m in back tax (Getty Images)

France is beginning to win its war against tax evasion thanks to high-profile prosecutions, the HSBC leaks and the unaccustomed help of Switzerland.

On Monday, in what a defence lawyer called a “show trial”, the Nina Ricci heiress, Arlette Ricci, 73, was sentenced to one year in prison for tax evasion that was originally exposed by the “Swissleaks” revelations from within the British bank HSBC.

Two days later, President François Hollande spoke on a visit to Switzerland of a “transformed” atmosphere of co-operation between the two countries on tax affairs.

The conviction of Ricci, as well as her daughter and her lawyer on related charges, ended the first of what may be scores of trials in France based on leaks from within the Swiss arm of HSBC in 2009. At least 62 other prosecutions are in progress. A combination of tougher new laws, the HSBC leaks, a 2013 “amnesty” and the more helpful approach of Switzerland has produced a torrent of hidden money into the French exchequer in the past 12 months. Almost €2bn (£1.4bn) was recovered in 2014. The French finance ministry hopes to almost double that figure this year. Since the government invited French tax evaders to “confess or face severe punishment” in 2013, more than 4,000 people have come forward to put their tax affairs in order. They have paid an average of €390,000 (£280,000) each in penalties and back taxes.

France has lots of taxes to evade – including annual levies on wealth as well as income, inheritance and local taxes. In Switzerland alone there are believed to be more than 80,000 undeclared and undiscovered French-owned bank accounts containing a total of more than €100bn.

They will not stay hidden much longer: France and Switzerland have agreed to exchange private financial data from 2018. Over 3,000 French names were on the original “Swissleaks” list, provided by a whistleblower at HSBC in 2009.

The list details financial data of more than 100,000 clients, including many in Britain. It included well-known people, such as the chef Paul Bocuse and the former France footballer, Christophe Dugarry. Many of them have already made deals with le fisc, the French tax authorities. At least 62 others who declined to co-operate, like Ms Ricci, face prosecution. Under tough anti-tax evasion laws introduced by the former President Nicolas Sarkozy, France has a “fiscal police” force which can bug the phones of suspects.

Fear of these powers, coupled with the 2013 amnesty, have persuaded many tax evaders to come forward.

The French tax authorities also anticipate that the “severe sentence” imposed on Ricci will bring even more self-declared tax cheats out.

In their ruling, the judges said Ricci has shown “a great determination” to hide €18.7m (£13.4m) from the French authorities for more than 20 years. As a result, she had “inflicted exceptional damage on public order” and France’s republican values, the court said.

Ricci was jailed for three years, two of which were suspended. She was ordered to pay €6.9m (£4.9m) in back taxes, penalties and fines. Houses in Paris and Corsica, worth €5m, were confiscated. She has appealed. Her daughter, Marguerite Vignat, 52, a pop singer, was given an eight-month suspended sentence. Ricci’s tax lawyer, Henri-Nicolas Fleurance, was also found guilty and given a one-year suspended sentence and a €10,000 fine.