Credit Agricole Investment Banking Arm Pays €88.2 Million to Settle Dividend Tax Case

Credit Agricole SA’s investment banking division agreed on Monday in Paris to pay €88.2 million ($103 million) to resolve a probe into alleged dividend-arbitrage trades that skirted French withholding taxes.

The settlement addresses a long-running criminal investigation into transactions critics say exploited loopholes in France’s tax code to reclaim dividends without proper tax treatment.

Settlement Details

• Payment amount: €88.2 million ($103 million)
• Case focus: Dividend-arbitrage trades allegedly designed to avoid French withholding taxes
• Authority: Paris criminal court judge approved the agreement

Background

Dividend arbitrage involves cross-border transactions where investors claim tax refunds on dividends that have not been properly taxed. French prosecutors launched the investigation after identifying patterns of trades structured to reclaim withholding tax credits on ineligible dividends.

Significance

By resolving the case, Credit Agricole avoids potential criminal charges, reputational damage, and further legal costs. The settlement underscores heightened regulatory scrutiny of complex tax-optimization schemes and signals that French authorities will pursue aggressive enforcement of market-abuse and tax-evasion rules.

What’s Next

Credit Agricole has confirmed compliance enhancements to prevent recurrence, including tighter controls on dividend processing and transaction oversight. The bank did not disclose whether it will seek to recover any portion of the payment from clients or counterparties involved in the trades.