Crédit Agricole to Pay €1.1 Billion to Settle “Cum-Cum” Tax Fraud Investigation
PARIS – Crédit Agricole Corporate and Investment bank (Cacib) has reached a judicial agreement with the National Financial Prosecutor’s office (PNF) to pay €1.1 billion, avoiding prosecution in a major tax fraud case known as “cum-cum,” a Paris court heard Monday. The agreement, formalized Friday and pending validation by the Tribunal President, marks a significant development in a sprawling investigation into a scheme that allegedly defrauded European governments of billions in taxes.the “cum-cum” practice involves exploiting loopholes to avoid the taxation of dividends paid to foreign investors in French companies. owners of shares would temporarily transfer ownership to banks like Cacib just before dividend distribution, circumventing tax obligations.The bank would then take a commission for this service, leading to the moniker “cum-cum” – a “win-win” for all parties involved.
the settlement with Cacib centers on accusations of aggravated money laundering, stemming from the bank’s routine handling of thousands of these transactions annually, coinciding with tax collection periods, and its involvement in complex international financial arrangements with suspected fraudsters. cacib has stated it has since ceased these practices, even at the cost of losing clients, and implemented weekly internal controls.
The PNF is also investigating five other major banks – BNP Paribas, Exane (a BNP Paribas subsidiary), Société Générale, Natixis, and HSBC - for their alleged participation in the scheme. Financial prosecutor Jean-François bohnert lauded Cacib’s “quality of cooperation” during the investigation and negotiation of the agreement. The “cum-cum” scandal first came to light in 2018 following an investigation by a consortium of international media outlets,including Le Monde.