Authorities Conduct Raids on French Banks in Tax Fraud Investigation

French prosecutors have confirmed that raids were carried out on Tuesday at the Paris offices of five banks as part of ongoing investigations into allegations of tax fraud and money laundering.

The preliminary investigations, which were initiated in December 2021, are specifically focused on dividend payments. While the names of the raided banks were not officially disclosed by the prosecutors, several French media outlets have identified the banks as HSBC, BNP Paribas, Exane (a subsidiary of BNP Paribas), Societe Generale, and Natixis.

Societe Generale, one of the banks subjected to the search, acknowledged the investigation but refrained from providing further details or comments. Requests for comments from the other banks mentioned were not immediately answered.

The investigations in question center around a practice known as "cum cum" deals, in which foreign shareholders of French-listed companies transfer their shares to a French bank just before dividend payments are made. This tactic is purportedly employed to evade paying capital gains tax. The French National Financial Prosecutor's Office stated that the searches involved the collaboration of six German prosecutors from Cologne, underscoring the possibility of German shareholders or entities being implicated in the alleged wrongdoing.

While the Cologne prosecutor's office acknowledged its involvement, it refrained from making any comments, citing the French investigative authorities' jurisdiction over disclosing information to the press.

It is important to note that the recent upheaval in the global financial landscape, triggered by the collapse of two US banks and the government-orchestrated takeover of Credit Suisse by UBS, is unrelated to the ongoing tax fraud investigation in France. However, it is worth mentioning that Germany has previously conducted a wide-ranging investigation into tax evasion, similar to the current case in France. The German investigation encompassed searches conducted at banks, businesses, and private residences, leading to convictions against several individuals involved in the fraudulent "cum-ex" transactions. The scheme, which involved swapping shares to fraudulently claim tax reimbursements, reportedly defrauded taxpayers of billions of euros.

To summarize, French authorities have conducted searches at the Paris offices of five banks, including HSBC, BNP Paribas, Exane, Societe Generale, and Natixis, as part of investigations into allegations of tax fraud and money laundering related to dividend payments. The investigations focus on "cum cum" deals, and collaboration with German prosecutors from Cologne suggests the involvement of German shareholders or entities. Societe Generale confirmed the investigation, while the other banks have yet to comment. The recent global financial turmoil is unrelated to the ongoing investigation in France.

By fLEXI tEAM