Spanish Princess Cristiana, the youngest sister of King Felipe VI of Spain, will have to return to the dock with the other 17 defendants of the "Caso Noos" corruption trial on February 9.
Cristiana had tried to avoid standing trial for tax avoidance by evoking what is known as the "Botin doctrine", but her final appeal was rejected by the provincial court in Palma de Mallorca on Friday, according to Xinhua.
In 2007, Emilio Botin, the former president of Spanish banking group Banco Santander, was able to avoid trial for fraud because accusations levelled against him came from a private source rather than the Spanish state prosecutor's office or the treasury.
Cristiana's defence lawyers argued the charges against the princess came from the trade union Manos Limpios (Clean Hands).
However, the three judges at the Court in Palma decided on Friday that Manos Limpias did have the right to press charges against the princess.
She becomes the first member of the Spanish royal family to face charges which could theoretically lead to an eight-year prison sentence.
The Noos case is over the dealings of the Noos Institute, a supposedly non-profit making institution set up by Cristina's husband, Inaki Urdangarin and his partner, Diego Torres.
Noos is accused of embezzling 6.2 million euros ($6.7 million) for organising sporting and social events with some of the money siphoned off through a company called Aizoon of which Cristiana and her husband were the directors.
Over 360 witnesses have been called to testify and 600 journalists accredited to cover the trial which is expected to last around six months.
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