- Credit Agricole CIB agreed to an €88.25 million CJIP settlement with France’s PNF over alleged “cum-cum” dividend-arbitrage trades, avoiding trial and criminal conviction.
- The payment includes €49.03 million in disgorgement and a €39.22 million punitive fine tied to securities-lending/derivatives transactions from 2013-2023.
- Investigators said the trades generated under €5 million of average annual revenue and noted CACIB tightened controls after 2018 by extending dividend-date transaction maturities to 90 days.
- The deal is the first major resolution in France’s wider cum-cum crackdown, with other large banks still under scrutiny and about €4.5 billion in tax redress demands issued.
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The settlement by Crédit Agricole CIB reconciles several legal, operational, and reputational risks while providing a roadmap for other institutions caught in similar investigations. Legally, the use of a CJIP allows CACIB to settle without admitting guilt or incurring a criminal conviction, but the validation of the agreement by the Paris court on 8 September 2025 means the terms are now binding.
Operationally, the investigation centered on techniques known as “cum-cum” wherein foreign shareholders temporarily transfer shares around dividend dates to tax-exempt French entities to evade withholding taxes. The average income from these trades was under €5 million a year over the decade examined, indicating relatively modest scale when compared to other large banking liabilities—but perception and regulatory implications are large.
Compliance improvements were central to reducing the punitive portion of the fine. CACIB had reportedly increased the maturity window for transactions around dividend detachment to 90 days post-2018 law changes; the PNF considered this when calculating the afflictive component. This demonstrates that proactive policy changes, even partial, can materially influence penalty outcomes.
In strategic terms, Crédit Agricole now becomes the first of its peers to reach a formal settlement in this set of probes. That leaves other banks, particularly HSBC, BNP Paribas, Natixis and Société Générale, in a more exposed position regarding legal, financial, and reputational risks—especially given cumulative exposures and French authorities’ finite tolerance for abuse. The broader fiscal impact is significant: France has already notified roughly €4.5 billion in tax redress to the banks under scrutiny.
Open questions remain: whether this settlement will prompt admissions or disclosures from CACIB beyond what the CJIP requires; how France’s courts will treat similar CJIPs with other banks; whether the €88.25 million fine fully captures potential losses or exposure, especially in cross-border jurisdictions; and how the risk of follow-on civil claims or shareholder litigations is being assessed.
Supporting Notes
- The fine totals €88.25 million; €49.03 million is restitution of income (“disgorgement”) over the 10-year period 2013-2023, and €39.22 million is punitive.
- The CJIP was validated by the President of the Paris Judicial Court on 8 September 2025.
- The scheme under investigation involved securities lending-borrowing and equity derivatives transactions categorized as dividend arbitrage (“cum-cum”) used by foreign shareholders to avoid French withholding taxes.
- Average annual income from the transactions in question was less than €5 million over the ten-year span.
- Following the Finance Act of December 2018 (Article 119bis A), CACIB voluntarily increased its transaction maturity requirement around dividend detachment from the 45-day standard to 90 days.
- The CJIP does not equate to a criminal conviction; CACIB admitted no guilt but accepted the fine and compliance obligations.
- France has already notified approximately €4.5 billion in tax redress demands to banks involved in cum-cum investigations.