Total, Michelin, Adidas targeted in tax fraud probe

1st April 2009, Comments 0 comments

The case comes on the eve of a Group of 20 summit in London where leaders are set to announce an international blacklist of tax havens, as part of a push for greater transparency in the world financial system.

Paris -- The energy giant Total, tyre maker Michelin and sportswear firm Adidas face investigation in France for evading taxes using accounts in the Alpine principality of Liechtenstein, prosecutors said Tuesday.

The Paris prosecutor's office confirmed reports that the French finance ministry had provided it in late 2008 with case files concerning foundations linked to the three firms, as well as some 30 French individuals.

It said it will open a preliminary investigation into the firms, the first step towards a possible indictment on charges of dodging taxes and concealing the profits behind Liechtenstein's banking secrecy laws.

Le Parisien
daily reported that the probe targets the Copa foundation, which is thought to be linked to the Michelin group, the Elf Trading foundation, which it said is now part of Total, and six foundations linked to Adidas.

All three firms denied any knowledge of the alleged laundering activities.

"The Michelin group does not own a Copa foundation, nor does it hold any accounts at the LGT bank in Liechtenstein," a spokesman for the firm told AFP.

Energy giant Total told AFP it "formally denies" the allegations.

"We do not own any Elf Trading foundation that is used to launder funds," a Total spokeswoman said.

"We have no activities in Liechtenstein, with the exception of two service stations."

Adidas also told Le Parisien it had no knowledge of any such investigation.

The case comes on the eve of a Group of 20 summit in London where leaders are set to announce an international blacklist of tax havens, as part of a push for greater transparency in the world financial system.

French authorities opened an investigation after a major German tax evasion scandal last year uncovered allegedly undeclared accounts held by foreign nationals within Liechtenstein's secretive banking sector.

Lichtenstein bank LGT said tax inspectors were working from a list with the names of 1,400 of its clients that was stolen in 2002.

France's finance ministry has been investigating 64 family-owned firms in connection with the scandal, of which 16 have since come clean and paid their overdue taxes and penalties, Budget Minister Eric Woerth said.

Woerth confirmed on LCI television that his ministry had transferred three files to prosecutors, but would neither confirm nor deny the names of the groups involved.

Authorities estimated last year that French firms evaded up to one billion euros in taxes via Liechtenstein, of which Le Parisien said the Elf, Michelin and Adidas foundations accounted for "a large part".

Transparency International France estimates that corporate tax evasion via tax havens costs the French state some 10 billion euros per year.

European nations, led by Germany and France, are using the global financial crisis to step up their offensive on tax havens.

Liechtenstein is one of three countries, along with Andorra and Monaco, on a blacklist of "non-cooperative" tax havens drawn up by the Organisation for Economic Cooperation and Development (OECD).

Bowing to international pressure, it agreed in March to recognise OECD standards on transparency, and to ease its strict banking secrecy rules and cooperate with foreign governments on tax fraud.

The principality also concluded a landmark tax agreement with the United States in December, set to come into force next January.

AFP/Expatica

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