Taxation. Suspicions of tax evasion: Crédit Agricole agrees to pay €88 million fine

Crédit Agricole 's corporate and investment bank, Cacib, has agreed to pay a fine of some 88 million euros to secure the abandonment of an investigation into a tax fraud case.

A scheme uncovered in 2018

This public interest judicial agreement (Cjip) was signed on Friday between Cacib (Crédit Agricole Corporate and Investment Bank) and the national financial prosecutor's office (PNF) , and must be validated this Monday morning by the president of the court.

In financial jargon, the practice known as "CumCum" consists of evading the tax on dividends that foreign holders of shares in listed French companies must in principle pay.

This scheme was revealed in 2018 by a consortium of international media outlets that investigated the matter, including Le Monde.

To take advantage of this arrangement, stock owners—small savers or large investment funds—entrust their securities to a bank at the time of tax collection, thus avoiding taxation. The banks act as intermediaries, while charging a commission to the stockholders, hence the term "CumCum" (win-win).

Six banks targeted

The agreement with Cacib concerns aggravated money laundering and aggravated tax fraud, particularly due to the fact that the acts were committed habitually, with thousands of transactions each year at the same time, when the tax must be collected, and international arrangements, with fraudsters abroad. The practice is officially called "dividend arbitrage."

During the hearing, financial prosecutor Jean-François Bohnert praised "the quality of Cacib's cooperation during the investigation and negotiation."

The bank explained that it had since conducted an internal investigation, stopped these practices, "even if it meant losing a customer," and implemented weekly checks.

In total, the PNF has launched investigations targeting six major banks suspected of engaging in this practice, which aims to "evade tax." According to a source close to the case, the other five are BNP Paribas, Exane (a fund manager and subsidiary of BNP Paribas), Société Générale, Natixis, and HSBC.