November 2011

THE LOGICAL SONG

 

 

The British band Supertramp released the album "Breakfast in America" in 1979. One of the songs is "The Logical Song." The last lyrics are: "I know it sounds absurd, (Won't you help me) please tell me who I am, who I am, who I am / But I'm thinking so logical."

I know too many people who think this is the kind of questions an American faces when he or she stays too long in France.

It is evident that too often we look for rational, coherent reasons for things that happen to us, and too often we are left with our questions unanswered, faced instead with what seems to be plain absurdity. Due to my work, I am very often in this situation in my own country!

Reading these lyrics made me think of some of my clients, who are absolutely convinced that they are completely logical and end up in total despair because nothing works. American logic does not work in France.

 

 

RADICAL CHANGE IN THE MOE: EMPLOYEE STATUS HAS BECOME NEARLY UNOBTAINABLE
For a long time, a myth about French immigration was that getting a full-time job was the safest way to obtain a solid carte de séjour. I have explained on several occasions how wrong this is, mainly because provision R 341-4-1 of the Code du Travail enables the MOE to veto the vast majority of requests regardless of who submits them. This provision defines "l'opposabilité de la situation de l'emploi," which could be translated as "the reason is the unemployment rate." I have always seen this provision being implemented with everybody, including North American citizens, but with a well-documented request, this veto right could simply be waived.

Then our current president, Mr. Sarkozy, decided to promote professional immigration and lower the amount of family-related immigration. One consequence of this was that undocumented aliens living in France could get a valid carte de séjour as employees if they met certain requirements. At first it was very easy to meet these, but once the French administration saw how many people could get legal status this way, the requirements became more and more strict. Use of the procedure pretty much stopped over a year ago, and then under the new interior minister the list of the jobs for which it could be authorized was cut in half. The final blow came in May: the new policy is that the only answer possible is NO. The goal is for legal immigration to diminish, since family immigration could never be downsized.

Information found in the French mainstream media, such as Le Monde, puts the problem in plain view. One of the most striking illustrations is the systematic NO that graduate students get when they ask to change their immigration status to employee after finding their first job. This is true even for graduates of the French equivalent of the Ivy League schools such as HEC, Essec, Sciences Po, Centrale, Ponts, and Arts et Métiers.

This radical change is creating serious problems for these schools. In this time of globalization, the best schools compete with each other worldwide, not just within national boundaries. Being able to attract the best students throughout the world is essential. While these schools are nowhere near as expensive as their North American counterparts, they are still very expensive by French standards, and even more so by emerging country standards. Mr. Pierre Tapie, the managing director of Essec, explains in one article in Le Monde that parents will take a second mortgage on their house to finance their children's studies, knowing that they will be able to pay it back with the child's first salary after graduation. He fears that his school will not be able to attract as many excellent students as before because of this change, since the parents will not take the financial risk of paying the tuition if the child cannot reimburse the outlay.

Another reaction is the outraged statement made by the president of the Conférence des Présidents d'Université, Mr. Louis Vogel, on September 21st: Cette circulaire est très grave, car elle peut avoir des conséquences importantes pour notre enseignement supérieur ... et détruit nos conventions passées avec des universités étrangères. (This decision is very serious since it may have major consequences for our graduate and post-graduate schooling ... and destroy our partnerships with foreign universities.)

France cherishes its grandes écoles, maybe excessively, and it does not take long, once one lives in France, to see how deep this love goes. So if their graduates, who are considered the elite of the French elite education, do not get the right to work in France, it is clear that no one does. On October 6th, the minister of higher education and research, Mr. Laurent Wauquiez, told Le Monde that the situation would change quickly for those graduates but that the general aim of the decision made in May would not be changed. At the time I am drafting this, I have no idea how far the government will go back but I am sure the definitive NO will stay NO except for some rare happy few.

I would remind everyone that changing employers, finding a job after a period of unemployment and, in some cases, getting a promotion will trigger a request to the MOE, with now the expected negative answer. My advice to everybody, for right now and for some months to come, is to avoid at all costs submitting a request to the préfecture that involves getting an answer from the MOE.

 

 

THE PARIS BRANCH OF THE MOE HAS MOVED OUTSIDE OF PARIS
A civil servant working at the Paris branch gave me information on the new address and the location of the new office. This is what I received:
"Adresse postale: 35, rue de la Gare - CS 60003 - 75019 PARIS
Adresse physique: 21 rue Madeleine Vionnet, 93300 AUBERVILLIERS (rue sur la gauche face au Centre Commercial MILLENAIRE et premier tourniquet-tambour)
Ouverture de 9H30 à 12H lundi, mardi, mercredi pour le moment car 2 mois de retard ... "

So the office is now open to the public only three mornings a week (Monday, Tuesday and Wednesday) from 9:30am to noon. The reason given is that the office is at least two month behind in reviewing requests.

I rarely question the motives behind this kind of decision, but in this case it could be understood that changing the regulations so as to drastically increase the volume of work and moving the office to a place far away and hard to reach, whether by car or by public transportation, in a location that cannot allow the public to be received properly, is a clear indication that the powers that be want to disorganize the service as much as possible, making it almost impossible to do a good job. So in addition to the near certainty of a negative answer, any request will take months and months to be answered, which creates problems since the foreigner is often waiting for this authorization to get started as a full-time employee.

 

 

FRANCE FUNCTIONS LOGICALLY ACCORDING TO FRENCH LOGIC
One of my readers sent me a link to a 2005 article from the British newspaper The Telegraph, which I enjoyed reading a lot. Titled "It's bad form to take French citizenship," it was written by Miles Clery-Fox. I would like to comment on a statement made near the end: "My brother-in-law ... summed up the general resignation of the French when dealing with The State: 'Because it's the law; c'est comme ça.' "

I totally respect the fact that very often foreigners feel that things are done in France in an incoherent, illogical and even nasty way. I respect their feelings and impressions because these people are caught in an awful situation and they feel they have every reason to think they have been picked on and discriminated against.

That being said, I very strongly disagree with the brother-in-law's fatalistic attitude, his feeling that the French bureaucracy is like what Franz Kafka describes in his novel "The Trial." Maybe it is because I spend a lot of time with civil servants in many different divisions of the French administration, but I can always see the motivation behind a decision made by an authority, the reasons for requirements made, the rationale for procedures being done a certain way, and so on. Strictly political decisions aside, I have never encountered a situation where I am faced with a decision that makes no sense from the French administration.

Nevertheless, the reasoning used and the motivations of the civil servants can be very difficult for a foreigner, or even for a normal French person, to understand. One situation illustrates this problem very well. Sometimes at the préfecture, a request derails and goes astray for no apparent reason. The applicant is devastated, considers this discrimination, and wants to meet with the manager, file a complaint, etc. Most of the time, the problem is actually that the civil servant has tried to be extra helpful and is asking for a complete new set of documents or a different procedure because he/she is checking to see if another status could be requested. In his/her mind, this is a favor, but usually the effort is totally misunderstood, and since the civil servant never explains anything, the result can be quite frightening. I have countless stories to illustrate this, and I admit that on some occasions I have failed to get the applicant to understand the situation and see how the civil servant was trying to be helpful.

 

 

OFFICE CLOSED FOR CHRISTMAS
I will celebrate Christmas in the USA and therefore the office will close on Friday, December 16th, and reopen on Wednesday, January 3rd. As always, I will be reachable by email for emergencies and important matters. The service I offer of receiving mail for clients will continue while the office is closed.

 

Best regards,

 

Jean TaquetJean

 

Q & A

THE MUTUELLE POLICY - FRENCH SECONDARY HEALTH COVERAGE

QUESTION
When I was working for a multinational I was sent to France and I quickly got a French contract and a mutuelle policy. I lost that job and have not been able to get another mutuelle ever since. I am now faced with major surgery and I realize that my out-of-pocket expense is going to be enormous. Can you help me choose the right policy for me?

ANSWER
Your question raises many issues, and some of them go way beyond the mutuelle coverage. Before getting into the needed explanation, I have to say I cannot imagine any insurance company covering such a pre-existing condition. So, to answer your question, No, I cannot help you choose the right policy, because I believe that there is no policy that can cover in these circumstances.

This type of supplemental health care policy came about because, over the years, the French national health care system has covered less and less of the total medical cost, either because procedures or medications are not considered to be sufficiently valid or because their costs are considered to be too high compared to the medical benefits they confer.

The first group includes all products one can buy without a prescription. Some of them can be very useful to fight a medical condition but are not considered to be proper medicine. Also in this group are substances that the doctor prescribes more for comfort than for treatment, which are reimbursed according to the medical benefit received.

The second group is mainly dental and the optical treatments. It is possible to get a pair of glasses for the amount that the caisse primaire d'assurance maladie (CPAM) reimburses, but instead everybody buys glasses that look good, with special lenses that make life much easier - and then the cost can be a hundred times the amount reimbursed by the system.

Another, much more recent trend that supplemental health insurance deals with has to do with the fact that families no longer provide as much support from one generation to the next, so some services are now paid for through these policies, include house calls, a cleaning lady, and someone to do grocery shopping or look after small children.

To sum up, the first mission of a supplemental health policy is to pay the difference between the actual cost to the patient and what is reimbursed by the CPAM, while its secondary mission is to cover certain services, up to a certain level determined by the provisions of the policy.

One issue here is that a group rate is always better than that for an individual buying such coverage. Hence the policy tends to be cheaper when an employer buys the coverage for many employees. Now that you are not employed you cannot benefit from this kind of offer.

An interesting twist is that all French banks now offer the entire spectrum of insurance products. I am not sure that you get the best rate this way, but there are advantages to a "one-stop shop," such as special discounts when you purchase more than one policy. I would bear this in mind as well for your homeowner policy, since in France tenants must have their lodging insured.

Also consider the fact that true mutual insurance organizations (assureurs mutualistes) are often cheaper and offer better service. The main ones include MAIF, MACIF, GROUPAMA and MAAF. The difference between them and the usual insurance company is the same as that between a bank and a credit union.

There are two very important issues here that appear to have been totally overlooked, however. First, if you purchase a policy now, there may be a medical questionnaire, or even a medical exam, so the medical condition that requires surgery may be identified and thus classified as a pre-existing condition. If the surgery is something not necessitated by a medical condition, there is even less chance that it will be covered by a brand-new policy.

The second issue concerns the way the French national health care system works. Surgery is by definition a crucial medical procedure and the basic primary coverage pays 99%, if not 100%, of the costs. The patient hardly ever even sees the price of the surgery, since the hospital gets complete payment directly from the system rather than the patient. So your fear is probably quite ungrounded. Staying in a hospital in France only gets expensive if you have a private room, use the phone extensively, watch cable TV, and so on. But you do have direct control over these costs, and they cannot be that high compared to the cost of the surgery.

So while purchasing a mutuelle policy can be a good thing, and you could or even should get one that fits your short- as well as long-term needs, but it is probably not going to meet your immediate needs. In other words, get a policy for the right reasons, and start by clearly understanding the French system so that you make the best decision for you.

 

 

 

CONSEQUENCES OF DEPOSITING CASH IN A FRENCH BANK ACCOUNT

QUESTION
I moved to France a couple of years ago and got my bank accounts opened in France through my American bank, of which I have been a client for decades. At first I found the personnel working there quite unfriendly and I was never able to get the full proper service (I was really hoping to have Internet access and credit cards, at a minimum). Every time it was needed I would withdraw money from one of my accounts, the French one or an American one, and deposit the cash in the account with the low balance.

Therefore I was outraged when, without any warning, I received a registered letter saying that my accounts would be closed in two months and I had to find another bank. I was never informed of the reason for this. The worst is that when I complained to my American bank, telling them they should control their subsidiary better, I was told that they have no control over their French branch and that it was just applying French law. I have never heard such a lousy explanation. This is not only very poor service but I want to sue for damages. I am having a hard time finding a bank in France where decent English is spoken and good service is offered.

ANSWER
There could be numerous issues that I cannot address here because I do not have enough information. But one thing I can help you with is the main reason the bank asked you to close your account. In France depositing cash is always suspicious, especially larger amounts. Unless you are a merchant who accepts cash payment, in which case dealing with cash is normal, any cash transaction other than withdrawals via an ATM or paying small amounts of money, leads to an assumption of some sort of fraud. Your banker does not have any problem with you taking money out of your account, but depositing cash is immediately assumed to be money laundering, because it is impossible to prove the origin of the funds. You might think the fact that the two transactions happen at the same time and location constitutes legal proof. But in reality, short of recording the number of the bank notes coming out of the ATM and matching them with those being deposited, you cannot prove anything this way. No matter how little the amount is, it is always suspicious. Think about it this way:
- What would be the motivation for depositing 10 or 20 euros?
- What would the origin of the money be if one deposits 200, 500, 1,000 euros or more?

It is totally illegal to pay any salary compensation in cash. The insurance industry only reimburses with non-cashable, non-endorsable checks or by wire transfer. These facts considerably reduce the chance that the money has been legally obtained.

Allow me to explain a French oddity that clearly illustrates how far this trend has gone. Since all salaries must be deposited into a bank account, all residents of France must have the right to a bank account. It is the same logic as that governing the concept of assigned risk in the American insurance industry. When a driver becomes uninsurable but has to be covered under state law, the state assigns this person to an insurance company, which has to provide the minimum legally required liability insurance.

The same thing now applies to bank accounts in France. If someone is "interdit banque de France" - which means barred from using normal banking services - then often the only solution left is to ask the Banque de France (which is France's version of the Federal Reserve) to designate a bank, which will provide the lowest possible level of banking services, a savings account, for the duration of the probation period, which cannot last for more than five years.

To me this illustrates quite well how strongly the French government is pushing to eradicate cash transactions and to maintain everybody's ability to use bank services.

It is not just cash deposits that arouse suspicion. All transactions going through an account can be reviewed, evaluated and questioned. Some will trigger almost automatic questioning, such as a large sum coming from a foreign country, or regular small amounts. Such deposits coming from France could also be questioned, although to a lesser extent.

France has one of the world's strictest laws against money laundering, enforced by a task force called TRACFIN (which stands for Traitement du Renseignement et Action contre les Circuits FINanciers clandestins), created within the Finance Ministry in 1990. Its operations and related prerogatives are a vast topic, impossible to address in a Q/A format.

But one aspect of this legislation has a direct impact on your situation: it puts a huge burden on the French banks to identify and report any attempt at money laundering. To put it very simply, either the bank informs the task force of a dubious transaction and so gets off the hook, or TRACFIN investigates some bank operation, in which case the bank (usually the branch manager) is considered an accomplice in any criminal deed discovered. The result is that the French banking industry, when it comes to dealing with the needs of the general public, is paranoid about money laundering. Under the circumstances, I do not blame them. The bottom line is that they will always prefer losing a client, if they have doubts, over taking the risk of being caught as an accomplice.

Some banks, or rather some branches, have a large North American clientele, and their branch managers understand the major cultural differences involved. Then allowing cash deposits becomes their choice; they can let it happen while checking once in a while to see which account the money came from. They can also educate their foreign clients through meetings and letters to get them to stop such behavior rapidly, if need be.

There is another aspect of cultural difference that can make things considerably worse. North Americans tend to be direct, "calling a spade a spade." French people express themselves very differently. What is written and what is meant can be very different. I can easily imagine that you had a few meetings with your account manager or even branch manager and walked out of them totally oblivious of the message they were sending you. You may have felt that you had a good and frank discussion with them, you answered all their questions and concerns, and therefore you had no reason to change. You heard something like "you should try to refrain from depositing cash" or "the bank has some concerns about the amount and frequency of your cash deposits," or even "we are sorry that we cannot offer all the services you asked for since your bank account is not being used adequately."

In the USA, the message would have been blunt: "You are forbidden from depositing any cash, period, since when you do so, my liability is on the line and I am putting a stop to it, right now."

Now you must find a new bank in France and you are stranded. There are several ways to ease the process, but none to make it easy and painless, mainly because of your track record of having been thrown out of a bank. Being introduced by a client of the branch will help in getting an appointment to open an account. Keep in mind that any advertisement stating that the bank opens accounts without an appointment does not apply to you. During the meeting repeat several times that you have learned your lesson, and never state that the letter throwing you out did not mention why they were doing this to you. Humble yourself as much as you can. Take along a file that presents you and your financial situation, with information such as where the bulk of your money is held, whether you work and have earnings, and if so whether this is in France or in the USA. In short, anticipate all the questions and concerns they might have, and be ready to answer them. You must reassure the bank representative, who will start the meeting with a negative opinion of you. Saying that you did not know the law because nobody told you about it never flies in France - or in the USA, for that matter.

Once a new bank takes you as a client, you must accept that you will obtain the needed bank services only gradually, since you will have to earn their trust even more than a regular client would. So arrange a second meeting to ask the bank how you should get money credited to your account, how you go about moving money from savings to a checking account, how to bring money from the USA and how to deal with a potential negative balance should a wire transfer take longer than expected. You absolutely need this second meeting, once you have been accepted as a client, so that they can tell you how they want things to be done. The more you act according to what they expect from a normal client, the smoother the relationship will be.

Finally, of course you should not sue your current bank, no matter how much their action has cost you. You are not in a position to prove that the bank did anything wrong. Also, keep in mind the bigger picture: you are having a hard time finding a new bank, so imagine what would happen if you sued your old bank, given that French law puts such a strong obligation on banks to report to the authorities. There is a good chance that they did not do so in your case mainly because it would have been as damaging for them as it would have been for you. Imagine the very first consequence of such a lawsuit: TRACFIN is informed of your cash deposits over a rather long period, and some sort of investigation ensues. I believe this kind of thing should be avoided at all costs, even if there is little chance of it going further than the initial investigation.




DISCLAIMER
Please forward this message to all those who would be interested in its contents. The information contained in this newsletter is intended only as general information. I strongly urge readers to seek professional guidance concerning the legal and tax matters mentioned. This newsletter is intended as a general guide and is not to be taken as professional advice.