Several searches were underway in five French banks in the Paris region on Tuesday on suspicion of serious tax evasion, the National Financial Prosecutor’s Office (PNF) said, confirming information from the newspaper “Le Monde”.
These operations “are taking place as part of five investigations opened on December 16 and 17, 2021 into aggravated money laundering or aggravated tax evasion and, in part, aggravated tax evasion related to the so-called “CumCum” fraud scheme,” a dividend tax regime , said the PNF.
A group of sixteen media uncovered this suspicion of gigantic tax fraud in 2018 via the “CumEx files”. The amount originally estimated at 55 billion euros was significantly increased by the consortium in 2021 and rose to 140 billion euros over twenty years.
“The ongoing operations, which required several months of preparation, are being carried out by 16 judges from the PNF and more than 150 investigators from the Fiscal Judicial Investigation Service (SEJF), in the presence of six German prosecutors from the Cologne Public Prosecutor’s Office, and intervenes within the framework of European judicial cooperation,” added the prosecutor added.
Societe Generale, BNP Paribas, Exane (a subsidiary of BNP), Natixis and HSBC are targeted, according to Le Monde.
A spokesman for Société Générale confirmed to AFP that a search had been underway at the company’s headquarters since Tuesday morning, without knowing what the purpose was. The other banks did not immediately respond to AFP.
According to prosecutors, “some of these investigations follow a complaint” filed in late 2018 by a “citizens in an organized gang” collective set up by Socialist MP Boris Vallaud, “or a coercive indictment against the tax administration” which, according to “Le Monde ” would date from the end of 2021.
The daily also confirms that the Directorate-General for Public Finances (DGFip) “made its first tax adjustments at the end of 2021” in relation to some of these banks “for amounts in the double-digit, even hundreds of millions of euros”.
When asked by AFP, the DGFip did not comment, nor did French Customs and the Ministry of Finance.
The practice, known as “cum-cum” in financial jargon, consists of avoiding the taxation of dividends, which are generally payable by foreign shareholders in French listed companies.
In order to benefit from the regulation, these shareholders, small savers or large investment funds entrust their securities to a bank for the collection of the tax, thereby avoiding taxation.
The banks played an intermediary role and charged the shareholders a commission.