Analysis
14 July 2019

Carmignac to pay a 30 million euro fine to settle tax fraud prosecution

Bastille Day Newsletter 2019 - Enforcement / Court Decisions

 

On June 28, 2019, French investment firm Carmignac Gestion, agreed to pay a 30 million euro fine as part of the French equivalent of a Deferred Prosecution Agreement (“DPA”) settled with the National Financial Prosecutor (“PNF”) to resolve a two-year criminal investigation for tax fraud.

This Convention Judiciaire d’Intérêt Public (“CJIP”), signed by Carmignac Gestion and approved by the judge during the confirmation hearing on July 8, is the first prosecution agreement for tax fraud in France since the extension of the CJIP scope to tax fraud1 – the scope initially limited to corruption, influence peddling, laundering of tax fraud proceeds and offenses “connected” to the latter.

In the Carmignac case, it appears that the company’s Luxembourg subsidiary payed its executives with dividends rather than salaries to reduce French tax expenditure. To avoid criminal conviction, Carmignac settled for a 30 million euro fine to put an end to the tax fraud investigation launched in February 2017. The PNF indicated that this fine was determined in consideration of the benefits resulting from the misconduct2.

Once again, this case highlights the most considerable advantage of the CJIP – Carmignac resolved the dispute without conviction or admission of guilt.

Carmignac states that “[t]he prosecutors were investigating into technicalities over transactions carried out before 2014” and that the company had thereby “seized the opportunity to close a case belonging to the past3.

The question of potential proceedings stays open concerning the individuals who may have been involved however, as they are not concerned by the CJIP provisions.

Related content

News
Conseil Constitutionnel
5 October 2023
Fillon saga: Procedural victory before the French Constitutional Council for the former prime minister in...
In response to an application for a priority preliminary ruling on the issue of constitutionality (“question prioritaire de constitutionnalité”), the...
Press review
24 November 2023
Press review – Week of 20 November 2023
This week, the press review looks back at the criminal proceedings opened against Senator Joël Guerriau, former Socialist Party First...
Event
Formation EFB Navacelle - Session 3/10
23 November 2023
Defining the scope of the internal investigation: internal investigation sources and the investigation plan
EFB Degree - Internal investigation (3/10) What criteria need to be considered when deciding whether to carry out an internal...
Publication
ABA International Law Section
21 November 2023
Practical tips when dealing with corruption allegations in arbitration
Navacelle contributes to the American Bar Association International Arbitration Committee's Quarterly Newsletter (Q3 2023).
Press review
Press review Navacelle
17 November 2023
Press review – Week of 13 November 2023
This week, the press review looks back at the criminal proceedings against Bashar Al-Assad, leader of Syria, Gotabaya Rajapaksa, former...
Publication
Revue Justice Actualités #28
13 November 2023
Internal Investigation and Negotiated Justice (in French)
Can internal investigation be used to negotiate the investigation phase with prosecuting authorities? An article in French, by Guillaume Daieff, Stéphane...
Press review
10 November 2023
Press review – Week of 6 November 2023
This week, the press review looks back at the trials of the former deputy director of the Bordeaux Criminal Investigation...
Publication
GIR Guide to Sanctions - Navacelle 2023
8 November 2023
The Guide to Sanctions (2023) – GIR
Navacelle co-author of the fourth edition of the Global Investigation Review's Guide to Sanctions.
Press review
Press review - Week of 30 October 2023
3 November 2023
Press review – Week of 30 October 2023
This week, the Navacelle press review looks back at Altice's filing of a civil action in the criminal proceedings in...
Event
Navacelle - IBA Paris 2023
2 November 2023
2023 IBA Annual Conference – Paris – Host Committe reception
As a member of the Host Committee, Navacelle co-hosted the Host Committee Reception for the International Bar Association (IBA) 2023...
Press review
27 October 2023
Press review – Week of 23 October 2023
This week, the press review looks back at the seizure of almost 60 million euros by French judicial authorities in...
Analysis
Autorité des Marchés Financiers - AMF
23 October 2023
Heavy sanction imposed by the French Financial Market Authority (AMF) for market manipulation
In its decision of 7 September 2023, the Enforcement Committee of the “Autorité des marchés financiers” ("AMF") fined the French...
Press review
20 October 2023
Press review – Week of 16 October 2023
This week, the press review looks back at the ECHR's decision on the conviction of Total and Vitol on charges...