MONACO Law and Practice Contributed by: Donald Manasse, Donald Manasse Law Offices
1.3 Claims Against Parties Who Assist or Facilitate Fraudulent Acts Parties who assist or facilitate the fraudulent acts of another can be charged as accomplices to the underlying crime. The receipt of fraudulently obtained assets is qualified as recel (receipt of stolen property, including property obtained through a crime), which is punishable under Arti - cle 339 of the Penal Code. Money laundering prosecutions are also captured under Articles 218 and 219 of the Penal Code. A relatively new provision criminalising the organisation of insolvency to avoid the enforce - ment of a judgment is provided for in Article 368- 1 of the Penal Code, and applies even before a judgment is final. The criminal infraction extends to those who assist in creating the insolvency, and thus to the accomplices. The Penal Code specifically provides that accomplices will be jointly liable. Article 1022 of the Civil Code provides for the Paulian Action, which allows creditors to attack all acts performed by a debtor to defraud the creditors of their rights. The effect of the Paulian Action is to consider the transfer to a third party as null and thus unopposable to the creditor. 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 pun - ishable by up to three years in prison and tried before a correctional tribunal. The statute of limi - tations 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 pro - vides 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 establishing the right of ownership. As regards criminal proceedings, the investigat - ing magistrate may order a freeze on assets if doing so is considered necessary for the mani - festation 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 pro - visions have been further developed under Law 1.535 of 9 December 2022( “Law 1.535” ). Law 1.535 transposes into Monaco law certain provisions of the EU Directive (2014/42/EU) on the freezing and confiscation of the proceeds of crime and FATF Recommendations. The Law provides, among other things, for a special ser - vice to manage seized or confiscated assets, and to assist in payment of damages awards to victims from the assets. In the event of insolvency, a party claiming own - ership can request the return of property held by the bankrupt party. Security in the form of sei - zure orders or a judicial mortgage will have prec - edence (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.
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