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Contribution Chambers 2018 Anti-Corruption Guide MONACO

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Law and Practice Monaco Corruption Bribery

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Contribution Chambers 2018 Anti-Corruption Guide MONACO

  1. 1. MONACO LAW AND PRACTICE: p.3 Contributed by Cabinet Giaccardi The ‘Law & Practice’ sections provide easily accessible information on navigating the legal system when conducting business in the jurisdic- tion. Leading lawyers explain local law and practice at key transactional stages and for crucial aspects of doing business. DOING BUSINESS IN MONACO: p.207 Chambers & Partners employ a large team of full-time researchers (over 140) in their London office who interview thousands of clients each year. This section is based on these interviews. The advice in this section is based on the views of clients with in-depth international experience. BELGIUM LAW AND PRACTICE: p.3 Contributed by Linklaters The ‘Law & Practice’ sections provide easily accessible information on navigating the legal system when conducting business in the jurisdic- tion. Leading lawyers explain local law and practice at key transactional stages and for crucial aspects of doing business. DOING BUSINESS IN BELGIUM: p.<?> Chambers & Partners employ a large team of full-time researchers (over 140) in their London office who interview thousands of clients each year. This section is based on these interviews. The advice in this section is based on the views of clients with in-depth international experience. CHAMBERS Global Practice Guides Law and Practice – Monaco Contributed by Cabinet Giaccardi Avocats Anti-Corruption 2018
  2. 2. MONACO LAW AND PRACTICE: p.3 Contributed by Cabinet Giaccardi Avocats The ‘Law & Practice’ sections provide easily accessible information on navigating the legal system when conducting business in the jurisdic- tion. Leading lawyers explain local law and practice at key transactional stages and for crucial aspects of doing business.
  3. 3. Law and Practice MONACO Contributed by Cabinet Giaccardi Avocats Authors: Thomas Giaccardi, Sophie Schumacher, Erika Bernardi, Eva Gros 3 Law and Practice Contributed by Cabinet Giaccardi Avocats CONTENTS 1. Offences p.4 1.1 Legal framework for offences p.4 1.2 Bribery p.5 1.3 Accounting provisions p.5 1.4 Intermediaries p.6 1.5 Scope p.6 2. Defences & Exceptions p.7 2.1 Defences p.7 3. Penalties p.7 3.1 Penalties on conviction p.7 4. Whistle-blowing p.7 4.1 Protection afforded to whistle-blowers p.7 4.2 Location of provisions p.7 5. Enforcement p.7 5.1 Enforcement body p.7 5.2 Guidance for enforcement bodies p.7 5.3 Jurisdiction for the enforcement body/bodies p.7 5.4 General powers and limitations of the enforcement body/bodies p.7 5.5 Powers of the enforcement bodies to require documentation p.8 5.6 Process of application for documentation p.8 5.7 Jurisdictional reach of the body/bodies p.8 6. Future changes p.8 6.1 Likely changes to the applicable legislation or the enforcement body p.8
  4. 4. MONACO Law and Practice Contributed by Cabinet Giaccardi Avocats Authors: Thomas Giaccardi, Sophie Schumacher, Erika Bernardi, Eva Gros 4 Cabinet Giaccardi has an experienced and multilingual team of legal experts specialised in various areas of business law, counselling and litigation matters and arbitration. Law- yers have a deep understanding of Monaco’s institutional, legal and regulatory environment and, through our net- works, and can provide assistance abroad to fit the specific needs of clients. The firm a diversified client base including large banks in Monaco, institutional actors, listed compa- nies, local companies, corporate executives and individuals. Authors Thomas Giaccardi is the head of the law office (Avocat Défenseur), who practises in business, criminal, banking, real estate and construction law. He handles long- term financing operations, the creation or sale of banking institutions and important real estate transactions, having been admitted to the Bar of Monaco in 1999. A member of the Monégasque Associa- tion of Compliance Officers (AMCO), Thomas was a member of the Monégasque Parliament in 2003 and was involved in the reform of various financial laws. Sophie Schumacher is an associate and the head of the criminal law department, who specialises in business criminal law and criminal procedural law, and is in charge of all money laundering matters. A member of AMCO, Sophie was admitted to the Nice Bar in 1997 and holds Master’s degrees in business law and judicial careers. Erika Bernardi is an associate who focuses on criminal law and civil law. Erika joined Giaccardi in 2014 after several internships with the firm and holds Master’s degrees in business law and criminal business law. She is fluent in English and French, but also enjoys speaking Spanish. Eva Gros, an associate, focuses on general criminal law and business criminal law, having been admitted to the Paris Bar in 2011. Eva, who is fluent in French and English, joined Giaccardi in 2016 and has also worked for several law firms in Paris. 1. Offences 1.1 Legal framework for offences Law No 1.394 of 9 October 2012 reforming the Criminal Code and the Criminal Proceedings Code with regard to corruption and special investigation techniques has ex- tended the scope of the persons liable for active and passive bribery, and the scope of certain offences. Sovereign Order No 605 of 1 August 2006, amended by Or- der No 4.440 of 6 August 2013, criminalises corruption in the context of transnational organised crime. Law No 1.362 of 3 August 2009 on the fight against money laundering, terrorist financing and corruption establishes the preventative measures (due diligence obligations and suspicious transaction report) to be applied by financial institutions, designated non-financial businesses and pro- fessions, legal entities and arrangements, and non-profit organisations. Law No 1.389 of 2 July 2012 on electoral campaign funding is the first step in the reform process to ensure the transpar- ency of political funding and prevent corruption. Explanatory statements to laws serve as guidelines for their interpretation. The Director of Judicial Services’ ‘circular’ memorandum to the State Prosecutor of 3 July 2015, also sent to the heads of courts, contains additional information on how the offence of bribery should be interpreted. The government agency Service d’Information et de Contrôle sur les Circuits Financiers (SICCFIN) issues instructions and recommendations with regard to the application of the leg- islation concerning the fight against corruption. The Principality of Monaco signed and ratified the Council of Europe Criminal Law Convention on Corruption (ETS No 173) on 19 March 2007 (Sovereign Order No 1.089 of 4 May 2007). The Principality also signed and ratified its Ad- ditional Protocol (ETS No 191) on 10 July 2013 (Sovereign Order No 4.668 of 15 January 2014).
  5. 5. Law and Practice MONACO Contributed by Cabinet Giaccardi Avocats Authors: Thomas Giaccardi, Sophie Schumacher, Erika Bernardi, Eva Gros 5 The Principality of Monaco signed on 13 December 2000 and ratified on 5 June 2001 the United Nations Convention against Transnational Organised Crime (Sovereign Order No 16.025 of 3 November 2003). 1.2 Bribery The Monegasque new legal framework is in line with the standards of the Criminal Law Convention on Corruption (ETS No 173). The offences in the area of bribery and corrup- tion are covered under the general provisions of the Mon- egasque Criminal Code (“Code pénal”, or CP). The specific dispositions of Order No 605 of 1 August 2006 concerning corruption in the context of transnational organised crime refer to the definition of the bribery offences in the Criminal Code. The harmonisation between these two pieces of legis- lation (achieved by Order No 4440 of 6 August 2013) avoids any overlapping of offences. Bribery in the private sector is placed on an equal footing with bribery in the public sector and all the various forms of corrupt behaviour of public or private officials are crimi- nalised: • “passive bribery” (CP Article 113-2, paragraph 1); • “active bribery” (CP Article 113-2, paragraph 2); • “passive trading in influence” (CP Article 113-3, paragraph 1); and • “active trading in influence” (CP Article 113-3, paragraph 2). The Monegasque Criminal Code describes a bribe as “any undue advantage” (for the various definitions of bribery and trading influence), whether material or non-material (mon- ey, holidays, loans, food and drink, a case handled within a swifter time, better career prospects, etc) and whether it be for him/herself or for “anyone else.” These latter terms cover natural persons or legal persons (such as a body as- sociated with the bribe giver, or political bodies). The adjec- tive “undue” excludes advantages permitted by the law or by administrative rules (ordinary gifts given out of courtesy or hospitality for traditional events), as well as gifts of very low value or socially acceptable gifts. The receipt of a bribe is an offence. “Passive bribery” of a public or private official covers the act of requesting, accept- ance or receipt of an undue advantage and includes the ele- ment of “accepting an offer or promise of such an advantage.” “Passive trading in influence” covers “the act of requesting an undue advantage, but also the acceptance of an offer or promise of an undue advantage, as well as situations in which the influence is intended to secure a failure to act, in which the influence does not lead to the intended result or in which the perpetrator of trading in influence is not a public official” (Government’s clarification with regard to Law No 1.394, debate in public session of 8 October 2012). Bribery in the private sector is concerned only with unlawful acts involving the commercial/business sectors. Offences are always deemed to be intentional in Monegasque law, except “in the cases where, for lesser offences, the law allows of the concepts of negligence or failure to exercise due caution or care for the safety of others” (CP Article 4-2). The offence of “active bribery” can only be committed inten- tionally. Intent relates to a future result (public or private of- ficial acting or refraining from acting, as the briber intends). Positive acts and failure to take action are covered, as well as officials’ future acts and action already taken. The material components of the active bribery are “promising, offering or giving” an undue advantage. The mental element applies to “passive bribery,” too. The ma- terial elements of the act include “requesting or receiving” an undue advantage or “accepting the offer or the promise” of an undue advantage. The Monegasque Criminal Code refers to the exercise of influence to secure the decision-making of a public official relating to distinctions, posts, contracts or any other favour- able or unfavourable decision. “Passive trading in influence” presupposes that a person, taking advantage of real or pre- tended influence, requests, receives or accepts the undue advantage, with a view to assisting the person who supplied the undue advantage by exerting improper influence over the decision-making of a public official. “Active trading in influence” presupposes that any person “promises, grants or gives” an undue advantage to a natural or legal person, to induce this person to exert an improper influence over the decision-making of a public official. Influence must contain a corrupt intent by the influence peddler. It is immaterial whether the influence peddler exerted his or her influence or not, as is whether the influence leads to the intended re- sult or not. 1.3 Accounting provisions General accounting offences apply, as implemented in the framework of the Monegasque laws and regulations regard- ing the maintenance of books and records, financial state- ment disclosures and accounting and auditing standards. Companies are required to draw up a statement of accounts, a profit and loss statement, and a management report (Law No 408 of 20 January 1945 for “société anonyme” or “société en commandite par actions”; Law No 1.331 of 8 January 2007 for “société en nom collectif”, “société en commandite simple” and “société à responsabilité limitée”). They have to submit these accounting records to the Trade and Industry Registry. The organisations and persons involved in the application of Law No 1.362 (fight against corruption) are required to keep, for at least five years as from the performance of opera-
  6. 6. MONACO Law and Practice Contributed by Cabinet Giaccardi Avocats Authors: Thomas Giaccardi, Sophie Schumacher, Erika Bernardi, Eva Gros 6 tions, a copy of accounting books. Law No 1.382 of 2 July 2012 requires candidates’ financial agents to keep campaign accounts. The failure for the organisations and persons involved in the application of Law No 1.362 to prevent bribery is a criminal offence (disregard for the professional obligations of due dil- igence or for the mandatory “suspicious transaction report”). 1.4 Intermediaries The Monegasque legislation applies to acts of bribery com- mitted indirectly, via intermediaries. The bribe giver and the bribe taker are liable, whether or not the intermediary is guilty. 1.5 Scope For passive and active bribery or trading in influence of a public or private official, the normal time limit is five years (Code of Criminal Procedure Article 13 ter). For passive bribery of a magistrate or juror, passive trad- ing in influence of a magistrate and bribery offences under Sovereign Order No 605 in the context of transnational or- ganised crime, the time limit is ten years (serious offences). Under the general provisions of the Code of Criminal Proce- dure (CPP), the Principality of Monaco has jurisdiction for offences committed in whole and partly in its territory (CPP Article 21), and for offences committed abroad by Mone- gasque citizens (CPP Article 5: “crime”; Article 6: “délit”), with a triple cumulative condition with regard to the lesser offences (“délit”): dual criminal liability, authorisation of the prosecuting authorities, complaint from the injured party or an official report to the Monegasque authorities by the authorities of the country where the offence was committed. Only the corruption offence of a judge or prosecutor (“mag- istrate”), or a juror is classified as a serious offence (“crime”). The extraterritorial jurisdiction is confined to traditional aspects of protection (state security, national interests, na- tional citizens, etc). Monaco has no jurisdiction to prose- cute corruption offences committed outside the country by a domestic public official if the latter is not a Monegasque citizen (elected assembly members are not concerned, since only nationals can be elected to the national or municipal councils). Monaco has upheld its reservation formulated in accordance with the provisions of Article 17, paragraph 2 of the Coun- cil of Europe Convention (registered on 31 March 2016). When the offender is one of its nationals or one of its public officials, Monaco establishes its jurisdiction only when the offence is punished by the law of the territory on which it has been committed. When the offence implicates one of its public officials, a member of its public or national assem- blies, an official of international organisations, a member of international parliamentary assemblies or a judge or an official of international courts who is at the same time one of its nationals, the Principality establishes jurisdiction without prejudice to the provisions of Articles 5 to 10 of Monaco’s Code of Criminal Procedure (exercise of public action for crimes and offences committed outside the Principality). The definition (CP Article 113) of the possible perpetrators of corruption offences includes: • “domestic public officials” (“person exercising public au- thority or carrying out public service duties or vested with an elected public office”; the functions performed by min- isters or government members, judges and jurors, prosecu- tors, public or ministerial officials, the director of police, mayor, national or local representatives are covered); • “foreign or international public officials” (“person exercis- ing public authority or carrying out public service duties or vested with an elected public office in a foreign state or in a public international organisation”); and • “private officials” (“person who, without exercising pub- lic authority or carrying out public service duties or being vested with an elected public office, as part of a commercial activity performs a management function or works for a private sector body”). Regarding bribery in the private sector, the concept of “pri- vate official” includes senior company managers and the in- dependent professions. The various types of relationship that the bribe taker may have with the private entity are covered (employees or any persons working for or on behalf of a pri- vate sector entity, even if they are not formally its employees or managers; for example, those undertaking functions of commercial or legal representation). It is not possible under the offence for employers to exonerate the private agents ex post facto and improperly from their liability. This offence does not include non-profit activities by persons and organi- sations such as associations and NGOs. Regarding participatory acts, the provisions of the Criminal Code cover complicity and incitement (CP Articles 41 to 43), fencing (CP Articles 339 and 340) in connection with all serious and lesser offences (“crimes” and “délits”), which is the case for the various offences of bribery in the public and private sectors, and trading in influence. The Criminal Code criminalises perpetrators of corruption offences in an “organised group” (CP Article 122-1). Sover- eign Order No 605 criminalises the “organised crime.” The Monegasque Criminal Code also criminalises the laun- dering of corruption proceeds (CP Article 218-3).
  7. 7. Law and Practice MONACO Contributed by Cabinet Giaccardi Avocats Authors: Thomas Giaccardi, Sophie Schumacher, Erika Bernardi, Eva Gros 7 2. Defences Exceptions 2.1 Defences The Criminal Code does not provide for special grounds of defence (such as statutory grounds for exemption or genu- ine regret) that may be applicable in relation to corruption offences. However, in the context of transnational organised crime, a person participating or having participated in an organised crime group may benefit from total immunity or remission of sentence (Sovereign Order No 605 of 1 August 2006). The person involved must provide, in the first case, all informa- tion needed for avoiding the infringement or executing the arrest of the other group members and, in the second case, all information needed for ending the infringement or iden- tifying the other group members. 3. Penalties 3.1 Penalties on conviction Passive and active bribery of a private official is punished with imprisonment from one to five years and a fine of EUR18,000 to EUR90,000. Passive and active bribery or trading in influence of a domes- tic public official and passive and active bribery of a foreign or international public official are punished with reclusion from five to ten years and a fine of EUR18,000 to EUR90,000. Passive bribery of a magistrate or juror and passive trading in influence of a magistrate are punished with imprisonment from eight to fifteen years and a fine equal to the triple of EUR18,000 to EUR90,000. Bribery offences under Sovereign Order No 605 in the con- text of transnational organised crime and corruption of- fences under the Criminal Code in an organised group are punished with reclusion from ten to 20 years and a fine of EUR18,000 to EUR90,000. As additional penalties, prohibition of civic, civil and family rights provided for by Article 27 of the Criminal Code can be ordered. The Court orders the confiscation of the proceeds gained by the offences (CP Article 122-2). 4. Whistle-blowing 4.1 Protection afforded to whistle-blowers The Principality of Monaco has no specific legislation pro- tecting “whistle-blowers” (within the meaning of “lanceurs d’alerte”). Persons who are, through their status or profession, in pos- session of information confided to them may reveal such secrets (within the meaning of “dénonciateur”, ie, informer), where they are obliged or permitted by law to disclose the information. 4.2 Location of provisions Only provisions regarding “disclosure of a secret” and “in- formation” before the State Prosecutor (“dénonciation”) are found in the Criminal Code and in Act No 1.362 of 3 August 2009 (“suspicious transaction declaration”). 5. Enforcement 5.1 Enforcement body SICCFIN is designated as the specialised authority for the fight against corruption under the Council of Europe Crimi- nal Law Convention on Corruption. The government agency is a part of the Department of Finance and Economy, and meets the international definition (Financial Action Task Force) of a financial intelligence unit. SICCFIN monitors compliance with the legislative and regulatory provisions, and is responsible for collecting, analysing and sending to the judicial authorities information relating, inter alia, to corruption. A liaison committee ensures the reciprocal exchange of in- formation between the departments of the Monegasque ad- ministration concerned by the fight against corruption and professionals subject to Law No 1.362 of 3 August 2009 (in particular concerning the trends and developments in meth- ods and techniques used in corruption), in order to improve the effectiveness of the measures implemented. 5.2 Guidance for enforcement bodies SICCFIN issues instructions and recommendations. The Director of Judicial Services issues circulars. 5.3 Jurisdiction for the enforcement body/bodies The territoriality principle applies to SICCFIN and judicial authorities (CPP Article 43), without prejudice to the ad- ministrative and judicial international co-operation. 5.4 General powers and limitations of the enforcement body/bodies SICCFIN ensures that professionals implement due dili- gence procedures that should form a barrier to the entry
  8. 8. MONACO Law and Practice Contributed by Cabinet Giaccardi Avocats Authors: Thomas Giaccardi, Sophie Schumacher, Erika Bernardi, Eva Gros 8 or circulation of funds of illicit origin in financial channels. SICCFIN shall examine the declarations and requests sent by the organisations and persons covered by Law 1.362 and may request any additional information. When SICCFIN becomes aware of facts that indicate a seri- ous likelihood of corruption, it shall establish a report that is to be sent to the Public Prosecutor. 5.5 Powers of the enforcement bodies to require documentation SICCFIN’s verification comprises checking documentary evidence and on-site enquiries. If, due to the seriousness or urgency of the case, SICCFIN considers it necessary, it may oppose the carrying out of any operation for the client concerned by the suspicious transac- tion declaration. The effects of opposition may be extended beyond the legal period by order of the Presiding Judge of the Court of First Instance upon request from the Public Prosecutor. SICCFIN can, for any precautionary purposes, impound the funds, titles or items concerned with the suspicious transac- tion declaration. Police officers have classical and proactive investigative re- sources (infiltration, sound and image detection technology, anonymous testimony, etc). 5.6 Process of application for documentation SICCFIN is subject to professional confidentiality. The re- port to the Public Prosecutor is accompanied by any relevant documents, with the exception of the suspicious transaction declaration. The latter must under no circumstances be in- cluded in the exhibits. When SICCFIN submits the case to the Public Prosecutor, it shall inform the organisation or person that made the dec- laration. The principle of discretionary prosecution applies. Police officers, magistrates, court clerks, interpreters, bailiffs and attorneys are bound by the secrecy of judicial inquiries (interviewing of witnesses, interrogations, searches, etc). 5.7 Jurisdictional reach of the body/bodies The obligations for declarations laid down by Law 1.362 may be extended to operations and facts concerning natural or legal persons domiciled, registered or established in a state or territory whose legislation is recognised as insufficient or whose practices are considered as an obstacle to the fight against corruption. SICCFIN may (subject to reciprocity) answer requests for information from foreign authorities exercising similar pow- ers, as long as the latter are subject to the same obligations of professional confidentiality and provided that the informa- tion supplied cannot be used for purposes other than the fight against money laundering, terrorist financing and cor- ruption. By way of derogation from CPP Article 43, the Monegasque guest officers may be vested with executive powers over the whole territory of the foreign state of operation. 6. Future changes 6.1 Likely changes to the applicable legislation or the enforcement body Following the recommendation by the Council of Europe’s Group of States against Corruption (GRECO), a specific ref- erence to active and passive bribery of domestic and foreign arbitrators may be included. Also, the Monegasque authori- ties consider that it is already covered by the terms “national public official” and “foreign public official,” as defined in the first and second paragraphs of CP Article 113. A draft law was submitted to the Monegasque parliament on 17 June 2014 in the area of transparency of party funding to introduce rules governing electoral income and, in particu- lar, donations; the principle of the scrutiny of this income; and extension of the sanction regime to cover irregularities. Two others draft laws were submitted by the Monegasque parliament in April and June 2017 for the protection of Whistle-blowers and the creation of the Monegasque Anti- corruption Agency. GIACCARDI AVOCATS Les Flots bleus 16 rue du Gabian 98000 MONACO Tel: +377 97 70 40 70 Fax: +377 97 70 40 80 Email: contact@giaccardi-avocats.com Web: www.giaccardi-avocats.com

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