This complaint against X for laundering tax evasion, breach of trust, forgery and use of forgery, and aggravated concealment in an organized gang “was filed with the PNF” on Monday, said Eva Joly, lawyer for the CSE and the CFE-CGC unions and Sud, during a press conference on the GE site in Belfort. It has a total of 4,000 employees, including 1,250 for the gas turbines entity.
“This is an exceptional moment because complaints of laundering tax evasion against multinationals are rare,” said Me Joly, from the Baro Alto business law firm. “The laundering of aggravated tax evasion is seven years of imprisonment incurred and the leaders can be responsible for the amount of the fraud on their assets”.
Proudly sporting a t-shirt with the “Lion of Belfort” and the inscription “Belfort out its claws”, union delegates Philippe Petitcolin (CFE-CGC) and Alexis Sesmat (South) denounced the tax practices of the American conglomerate. “Fighting tax evasion is not inevitable. We are entering into resistance!”, thundered Alexis Sesmat.
Hundreds of millions of euros
The industrial giant said on Sunday that it respected “the tax rules of the countries in which the company operates”.
“All companies that operate and manufacture in multiple countries have a transfer pricing policy to ensure that all inter-company transactions are at arm’s length prices (i.e. prices that are ‘would apply to transactions between unrelated parties),’ he argued.
However, according to the plaintiffs, since the takeover of the Belfort turbine plant from Alstom in 2015, the American multinational has caused more than 500 million euros to escape from the Belfort site to Switzerland and the American state of Delaware where the taxation is more advantageous.
“We have shown that over the period 2016-2019, there was an artificial reduction (of the profits of the Belfort site) of 555 million euros on three contracts where the rules on transfer prices are not respected” by GE, said Eva Joly, former MEP and former investigating judge specializing in the fight against corruption.
According to the Disclose investigation site, this sum would even amount to 800 million euros.
Current procedure
“In reality, if we don’t rig the accounts, the Belfort site is in balance”. “GE organized the impoverishment of the Belfort site” and “prepares the closure of this site”, fears Me Joly.
For Philippe Petitcolin, CFE-CGC delegate and secretary of the CSE, this “artificial deficit has allowed GE to justify wage moderation, lower investment and relocation” abroad.
On December 30, the unions had already seized the Belfort court for “fraud on the right to employee participation”. This procedure is still ongoing.
“Since 2018, we have done a lot of analysis, expertise and we have noted a certain number of non-conformities”, notes Mr. Petitcolin. “Despite the reports, despite the meetings, despite the information that we have given to the tax authorities for four years, nothing changes, and therefore the tax evasion of General Electric continues”, he continues, while “like McKinsey, GE n has not paid tax in France for more than 10 years”.
Position of Bercy
The French tax administration had denied Monday to AFP having validated a tax optimization scheme for General Electric (GE), allowing it to transfer several hundred million euros in profits abroad.
“There is a lack of political will to fight against tax havens,” said Quentin Parrinello, of Oxfam, also present on Tuesday with the Attac association to support the inter-union approach.
“I hope that the filing of a complaint (…) before the National Financial Prosecutor’s Office will allow for full transparency on this affair. Bercy must also position itself: the time of tax havens is over”, reacted the president of the Bourgogne-Franche-Comté region, Marie-Guite Dufay (PS). “If this information is verified, there are potentially hundreds of millions of euros in tax revenue for the country and for the territory of Belfort, which could not have been invested in local development”.