国际英语资讯:German Freshfields offices searched again in Cum-Ex tax fraud scandal

BERLIN, Nov. 23 -- The Frankfurt offices of Freshfields Bruckhaus Deringer LLP were searched for a second time by German investigators in the Cum-Ex scandal, the international law firm confirmed on Friday.

Freshfields told press that the raid had already taken place in mid-November. Earlier, German newspaper Handelsblatt had cited unconfirmed information that German authorities had launched investigations to reputed partners at the firm in relation to tax consulting services rendered to the now insolvent Canadian Maple Bank.

The "Cum-Ex" scandal is widely considered to be the largest tax fraud scheme in Germany history.

As initially revealed by the newspaper Die Zeit, domestic and international banks, as well as some investment funds, used two distinct "Cum-Cum" and "Cum-Ex" loopholes in stock trading regulations over the course of several years to strip the German state of billions of euros.

"Cum-Cum" is a still legally-disputed practice whereby financial institutions help foreign investors in securing tax rebates they are not entitled to.

In broad terms, banks sell the stocks of a foreign client to a German buyer, for example a domestic brokerage firm, shortly before dividends are paid out. The brokerage can then claim a tax rebate from the German state which a foreign auctioneer would not have received. After dividends are disbursed, the stocks are sold back to the original foreign owner immediately and the tax rebate is split between participants.

The second method, "Cum-Ex", is more complex and was officially outlawed in 2017. Following this approach, a tax bill is settled by the owner of stocks once, before being claimed as a refund twice, or even multiple times. The profit thus achieved is then split again between the parties to the transaction.

The scheme is currently estimated to have caused total Europe-wide damage of 55 billion euros (62.47 billion U.S. dollars) and 31.8 billion euros in Germany alone to fiscal authorities.

Scores of lawyers, lobbyists and bankers were found to have assisted their clients with two lucrative "Cum-Ex" and "Cum-Cum" methods.

Commenting on the latest investigatory search of its Frankfurt premises, the Freshfields spokesperson said that its advice "always complied with the prevailing laws". The spokesperson added that the firm was "still confident that our advice was legally sound".