"CumCum" Affair: Crédit Agricole Agrees to Pay 88 Million to Avoid Trial

This is a turning point in the so-called "Cumcum" tax fraud affair, which involves the largest French banks and deprives the state budget of €1.5 to €3 billion each year. Crédit Agricole has decided to negotiate with the National Financial Prosecutor's Office (PNF) to settle a highly sensitive case, and has agreed to pay €88.2 million to end criminal proceedings and avoid a trial. It thus becomes the first French bank to admit to the practice of "CumCum" in court.

On Monday, September 8, the Paris Judicial Court validated a public interest judicial agreement (CJIP) signed three days earlier between the PNF and CACIB, the banking group's market arm, in which the latter acknowledged aggravated money laundering and aggravated tax fraud. This decision marks an important step in this complex case, in which the French banking sector had until then categorically denied any accusations of fraud.

Modestly called "dividend arbitrage" (or " div-arb" ) in the banking world, "CumCum" allows foreign shareholders of French companies to circumvent dividend tax thanks to banks remunerating themselves in the process. Le Monde revealed the existence of these arrangements as part of the " CumEx Files " investigation, published with the assistance of several foreign media in 2018. Long considered a gray area, this practice remained tolerated for decades. While abroad, comparable practices had already been prohibited for several years, notably in the United States and Germany, it was not until December 2021 that the French justice system opened its first investigations, targeting six banks suspected of having practiced " CumCum" on a large scale: CACIB, BNP Paribas and its subsidiary Exane, Société Générale, Natixis, and HSBC France.

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