MONACO Law and Practice Contributed by: Donald Manasse, Donald Manasse Law Offices
1.4 Limitation Periods The general civil statute of limitations period is five years from the date the party bringing an action knew, or should have known, the facts allowing the lawsuit to be brought. Criminal acts defined as délits are mostly punishable by up to three years in prison and tried before a cor - rectional tribunal. The statute of limitations is three years, although corruption carries a special limitation of five years. For acts defined as crimes rather than délits, the imprisonment is from five years to life (but generally 20 years). The statute of limitations is 20 years. 1.5 Proprietary Claims Against Property Article 1800, paragraph 2, of the Civil Code provides that a judge may order real or personal assets to be escrowed or sequestered where there is a dispute over ownership between two or more persons. The fruits of the escrowed asset will go to the party estab - lishing the right of ownership. As regards criminal proceedings, the investigating magistrate may order a freeze on assets if doing so is considered necessary for the manifestation of the truth. However, confiscation of the proceeds of a crime is also provided for, in Articles 12 and 32 of the Penal Code; these provisions have been further developed under Law 1.535 of 9 December 2022 (“Law 1.535”). Law 1.535 transposes into Monaco law certain provi - sions of the EU Directive (2014/42/EU) on the freezing and confiscation of the proceeds of crime and the FATF Recommendations. The Law provides, among other things, for a special service ( Service de Gestion des Avoirs Saisis ou Confisqués or SGA) to manage seized or confiscated assets, and to facilitate the pay - ment of damages awards to victims from the assets. In the event of insolvency, a party claiming ownership can request the return of property held by the bank - rupt party. Security in the form of seizure orders or a judicial mortgage will have precedence (unless the judicial administrator claims a preferential transfer). The suspect period in Monaco during which assets not transferred for value can be “clawed back” is
three years from the date the entity is declared to have become insolvent. 1.6 Rules of Pre-Action Conduct There are no particular or specific rules requiring, for example, a letter before taking action to return assets prior to filing an ex parte motion to seek an order to freeze them. In a standard civil action, it is necessary to demand the reimbursement of any amount alleged to be due prior to starting an action. This is known as a mise en demeure , which also starts the running of legal interest on the claim. 1.7 Prevention of Defendants Dissipating or Secreting Assets Freezing Orders A victim of fraud can request a freezing order over assets belonging to a defendant and held by third parties as a pre-judgment attachment, by filing an ex parte application with the president of the Court of First Instance (Articles 490 and 491 of the CPC). The claimant must demonstrate the existence of a “certain principle of a claim with a sufficiency of evidence”. This is a standard established by case law. There is no requirement for a foreign judgment. A saisie is the equivalent of a freezing injunction and does not require a cross-undertaking or court fees (as a bond). If the request is refused, the creditor can appeal in an ex parte proceeding. The saisie , or freezing order, will be specific to “accounts in a bank” held by a debtor, for example, but it is not necessary to name specific account numbers. The Monaco courts will not issue a general “worldwide” freezing order of the type that can be obtained in common law jurisdictions. The pre-judgment attachment grants precedence over other creditors, other than where the assets are pledged to the bank, for example. It is not necessary to explain why it is thought a third party or bank holds assets, nor is it necessary to specify, for example, the bank account numbers to be seized. Nor is it nec - essary to demonstrate a risk of asset dissipation to justify the seizure order. Under Article 487 of the CPC, it is possible to unilater - ally and without a court order make assets, including bank funds, temporarily unavailable to the defend - ant by filing an application with the court, which will
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