The French prosecutor’s office has put UBS under a formal investigation for allegedly being involved in illegal sales practices concerning investments designed to evade taxes. 

Officials had already questioned UBS France's chief executive, Jean-Frederic de Leusse, and placed the French unit under investigation.

"This is not a new issue. It has been reported on since early 2012. The decision of the court extends the investigation," UBS said in a statement.

"We will continue working with the authorities in France within the applicable legal framework to arrive at a resolution to this matter. UBS fully supports the strategy of Switzerland to limit itself to the management of declared assets. We believe that Switzerland and the countries of the EU need to find a solution for the past. This is an industry issue that UBS has taken significant steps to resolve since 2009. Our aim is for our approach to be industry leading. UBS does not tolerate any activities intended to help its clients circumvent their tax obligations," the bank said.

Political concerns over the issues have been increased by the resignation recently of former French budget minister Jerome Cahuzac over allegations he had an undeclared Swiss bank account. Cahuzac admitted to holding a Swiss bank account in March. He did not specify which bank, but French media reports have said investigators have a voice recording in which Cahuzac says he regrets having an account at UBS.

The bank was also given the status of "supervised witness" on two other allegations related to money laundering and tax evasion rather than being placed under investigation, the prosecutor's office is reported by Reuters to have said.

Under French law, being placed under official investigation means there exists "serious or consistent evidence" pointing to probable implication of a suspect in a crime. It is one step closer to a trial, but a number of such investigations have been dropped without trial, the news service said.