Tax fraud probe raids five French banks

An investigation into alleged tax fraud has led to the raid of five French banks. As per the statement of French prosecutors, on Tuesday, the offices of five banks in Paris were subjected to a raid by the authorities on the grounds of suspected tax fraud.

The French National Financial Prosecutor’s Office has announced that five preliminary investigations were initiated in December 2021 on allegations of money laundering and tax fraud related to dividend payments. The recent raids are part of these investigations.

The banks that were raided were not specified by the prosecutors. According to French media sources, the banks subject to searches included HSBC, BNP Paribas, Exane (a subsidiary of BNP), Societe Generale, and Natixis.

Societe Generale acknowledged the investigation at its premises yet refrained from providing additional commentary. Requests for comments from the remaining banks were not promptly responded to.

Moving Markets

The aforementioned raid occurred amidst the global financial turmoil triggered earlier this month by the failure of two American banks and the government-led acquisition of distressed Swiss financial institution Credit Suisse by its competitor, UBS.

The investigation conducted in France pertained to the practice of “cum cum” deals, wherein a non-domestic shareholder of a company listed in France transfers their shares to a French bank when dividends are disbursed, intending to evade the payment of capital gains tax.
As per the statement released by the French prosecutors, the search operation was carried out with the assistance of six German prosecutors hailing from Cologne following the framework of judicial cooperation within Europe. The statement implies that the aforementioned foreign shareholders comprised individuals or organisations of German origin.

The prosecutor’s office in Cologne has refrained from commenting on the ongoing investigation, citing the French investigative authorities’ press sovereignty.

A tax evasion investigation of comparable scope was conducted in Germany in recent years, resulting in searches of financial institutions, corporations, and entrepreneurs’ residences, culminating in certain bankers’ convictions.

Reportedly, many bankers were implicated in a fraudulent scheme that revolved around “cum-ex” transactions. This scheme entailed the exchange of shares among participants to obtain reimbursement for taxes that had not been paid. According to reports, the aforementioned fraudulent scheme resulted in the misappropriation of billions of euros in taxpayer funds.


About Post Author