A briefing document looking at all aspects of Cum-Ex has been created by Rahman Ravelli.
The financial crime, cross-border investigations and complex commercial litigation legal practice details the background to Cum-Ex, the current situation and the issues that may arise regarding it in “Cum-Ex Trading Scheme Explained’’.
The 16-page publication has been written by Rahman Ravelli partners Syedur Rahman and Joshua Ray, and Salomé Lemasson, who heads the firm’s EU business crime and regulatory practice group. It was devised and designed to be a concise and informative point of reference for companies and individuals that may have had either direct or indirect involvement with Cum-Ex trading.
The publication begins by explaining exactly what Cum-Ex is: the huge volume of dividend trading strategies that exploited a loophole to enable more than one party to claim tax rebates. It sets out the background to such transactions, including those who took part, and uses graphics to show the individual stages that were involved.
The authors describe the response so far from the authorities regarding Cum-Ex. Developments in the UK, Germany, France, US, Austria and Denmark are all detailed in the guide. The guide also considers what developments could be expected in the future, as investigations progress or commence in various countries.
One section is also dedicated to considerations for banks and financial institutions that had involvement in Cum-Ex
It states that financial institutions and other corporate bodies should consider devising a robust defence strategy and/or remediating measures in order to limit reputational harm to themselves.
Such a response would involve ensuring all accounting, contractual or legal documents relating to relevant transactions are kept and stored, as they may be required as part of a defence strategy in case of a prosecution. Conducting an internal investigation that focuses on activities relating to Cum-Ex, the jurisdictions where these were conducted and the relevant evidence may also be needed before deciding whether there is a need to report to national tax and criminal authorities.
The guide is available here. Cum-Ex Trading Scheme Explained