In a move that appeared to be timed to coincide with pressure by President Nicolas Sarkozy for a G20 agreement on curbs for offshore tax havens, the French government has demanded tax fraud investigations into bank accounts allegedly held in Liechtenstein by Michelin, Total and Adidas.
President Sarkozy has been pushing for strong action to curb tax evasion at tomorrow's summit in London and the timing of yesterday's announcement – originally a leak to the French press – was almost certainly intended to prove that the French government is taking an equally tough line at home.
A pre-summit agreement has already been reached in outline by the G20 countries on restrictions on offshore banking, according to sources in Paris. One official said that "more progress has been made on tax havens in the last 10 days than in the previous 10 years."
Of the three French corporate giants, officials said the Finance Ministry in Paris had requested a criminal investigation four months ago into "foundations" and bank accounts run by subsidiaries in Liechtenstein. Two of the companies concerned – Michelin and Total – quickly denied they had front organisations or bank accounts in the territory. "All we have in Liechtenstein is two filling stations," said a spokesman for the oil giant Total.
The public prosecution service confirmed that it had been studying files involving the three companies – and 30 French individuals or smaller companies – since December. A decision had not yet been reached on whether there was a case for prosecution for tax evasion, the prosecution service said.
The French investigations arise from information the German government passed on after an investigation into off-shore accounts in Liechtenstein last year. Several French companies and individuals have agreed to co-operate with the tax authorities, officials said.
Three other "large dossiers" had been passed on to the prosecution service, concerning accounts held by "foundations" linked to the tyre giant Michelin, the sportswear company Adidas and the oil company Elf, now part of Total.
Total later denied having any financial activities in Liechtenstein. Michelin denied all connection with the foundation and bank account named in the leak to the newspaper, Le Parisien. Adidas made no immediate comment.
The leak and government confirmation came amid of flurry of comments by President Sarkozy this week designed to impress domestic opinion in France in the run-up to the London summit. Officials from other G20 countries yesterday played down suggestions that President Sarkozy might walk out of the summit if it failed to take tough action on tax havens or international regulation of finance. Le Figaro reported yesterday that President Sarkozy had told a cabinet meeting in Paris two weeks ago that he would "get up and walk out" if insufficient progress was made. Diplomatic sources in Paris said that they regarded this as intended for "domestic pol-itical consumption". President Sarkozy wanted to reassure voters that he intended to take a tough line in London.
In fact, a likely summit declaration on tax havens has already been agreed in outline to the satisfaction of France and other governments.
On financial regulation, President Sarkozy has been calling publicly for some form of international watchdog to supervise banking and other international financial transactions.
In private, the diplomats said, Paris appeared ready to accept an emerging compromise in which national watchdogs would retain control but would meet regularly to ensure that standards were uniform around the globe.
Asked about the summit yesterday, President Sarkozy appeared to back away from any threat to storm out. "We have to get results," he said. "We have no choice. The crisis is too serious to allow the summit to fail."