NextFin news, Crédit Agricole, one of France's largest banks, agreed on Monday to pay €88 million (approximately $103 million) to settle a tax fraud case related to dividend arbitrage, known as the 'cum-cum' scandal, in Paris, France.
The settlement was approved by the Paris Judicial Court during a public hearing, as confirmed by French prosecutors and court officials. This agreement allows Crédit Agricole to avoid a criminal trial over allegations that it helped clients evade taxes through complex financial arrangements involving dividend payments.
The 'cum-cum' tax fraud scheme involves banks facilitating clients to reclaim dividend withholding taxes improperly, exploiting loopholes in tax regulations. Crédit Agricole's involvement in this scheme was under investigation by French financial crime authorities.
The bank's investment banking division will pay the €88.2 million fine as part of the plea deal, which was validated by the court on Monday morning. This marks the first French bank to settle such a case related to the 'cum-cum' tax fraud probe.
French prosecutors stated that while Crédit Agricole has settled, investigations into other entities involved in similar schemes will continue. The settlement reflects the authorities' efforts to clamp down on tax evasion practices within the financial sector.
The case was handled in Paris, where the judicial court oversees financial crime cases. Crédit Agricole's agreement to the settlement was reported by multiple sources including Reuters, MarketScreener, and MLex, all citing official court and prosecutor statements.
This development comes amid broader scrutiny of tax fraud and financial misconduct in Europe, with regulators increasingly pursuing settlements and prosecutions to recover lost tax revenues.
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