Tax fraud: from BNP to Société Générale, five French banks searched

The National Financial Prosecutor’s Office (PNF) announced on Tuesday that searches were being carried out at the premises of five banking and financial establishments located in Paris and La Défense as part of an investigation for tax fraud and laundering of tax fraud. A spokesperson for the PNF confirmed that the establishments targeted were Societe Generale, BNP Paribas, Exane (a subsidiary of BNP), Natixis and HSBC after an article published in The world.

Contacted by Reuters, a spokesperson for Societe Generale confirmed that a search had been underway in the group’s offices since this morning and declined to comment. The other establishments targeted did not respond to Reuters’ requests immediately.

A hundred billion euro fraud

The searches are part of five preliminary investigations opened in December 2021 on the count of aggravated money laundering of aggravated tax evasion and for some of aggravated tax evasion, relating to the so-called “CumCum” fraud scheme. According to the public prosecutor, these operations are carried out by 150 investigators from Bercy, 16 French magistrates and 6 Germans.

This fraud consists of a foreign shareholder of a company listed in France temporarily transferring, around the date of payment of the dividend, the securities he holds to a French banking establishment, in order to avoid payment of the withholding tax source applied to the payment of this dividend. The damage for the States would amount to more than a hundred billion euros.

The collective “Citizens in organized band” at the origin of a complaint

According to the public prosecutor, “some of these investigations follow a complaint”, filed at the end of 2018 by a collective “Citizens in an organized gang” around the boss of PS deputies Boris Vallaud, “or a mandatory denunciation of the tax administration” , which dates according to The world from the end of 2021.

Read alsoTax evasion: a citizen collective files a complaint with the national financial prosecutor’s office

The daily also affirms that the General Directorate of Public Finance (DGFip) “made its first tax adjustments at the end of 2021” concerning some of these banks “for sums counted in tens, even hundreds of millions of euros.” Asked by AFP, the DGFip did not comment. Neither customs nor Bercy had responded immediately either.

The so-called “CumCum” practice pointed out

A group of sixteen media revealed in 2018 via the “CumEx Files” these suspicions of giant tax fraud. The amount, initially estimated at 55 billion euros, had been significantly increased in 2021 by the consortium, rising to 140 billion euros over twenty years.

The so-called “CumCum” practice in financial jargon consists of escaping the tax on dividends which must in principle be paid by foreign holders of shares in listed French companies. To take advantage of the scheme, these owners of shares, small savers or large investment funds, entrust their securities to a bank when the tax is collected, thus escaping taxation. The banks would have played an intermediary role, while charging a commission to the holders of shares.

(With AFP and Reuters)