The Trusts Law Introduces A New Arsenal Of Criminal Sanctions – White Collar Crime, Anti-Corruption & Fraud

One of the many objectives of Law 1.559 of 29 February
2024, adapting the legislative provisions on the fight
against money laundering, the financing of terrorism and the
proliferation of weapons of mass destruction, is to bring
Monegasque legislation on trusts into line with FATF standards.

The Moneyval report, in its recommendation 25 on transparency
and the beneficial owners of legal arrangements, highlighted the
non-proportionate and non-dissuasive nature of the penalties
previously provided for by the Monegasque law on trusts – Law
214 of 27 February 1936 as amended.

The Principality of Monaco has therefore adopted a new arsenal
of criminal sanctions in this area to strengthen the compliance of
its legal framework with the content of the Moneyval report and to
ensure the effectiveness of the national anti-money laundering
strategy.

Thus, several categories of persons are now liable to be
criminally sanctioned for not having complied with the obligations
arising from the amended Law 214 on trusts.

First of all, the trustee themself and their local
representative are liable to fines and/or imprisonment
for:

• Failure to have provided all the information and supporting
  documents on the beneficial owners of each trust set up or
  transferred to Monaco;




• Having given, in bad faith, inaccurate or incomplete
  information to the Department of Economic Development when
  registering on the Register of Trusts;




• Failure to regularize their situation despite the imposition of
  two administrative penalties in the event of failure to comply with
  all or part of the following obligations:
  

  • Obtain, maintain and keep up to date information and supporting
    documents relating to the beneficial owners of each trust set up or
    transferred to Monaco;

  
  

  • Obtain, maintain and keep up to date basic information relating
    to the persons who provide services or advice to the trust set up
    or transferred in Monaco;

  
  

  • Bookkeeping;

  
  

  • Registration and entry in the Register of Trusts.

The settlor, protector, beneficiary or any natural
person who ultimately exercises effective control over the
trust, is also liable to a fine if they fail to provide
all necessary information to the trustee and the trustee’s
local representative.

The co-trustee as well as the local representative of
the trustee may be subject to criminal penalties if
they:

• Do not communicate to the authorities (AMSF, judicial
  authorities, judicial police officers, etc.) the information and
  supporting documents they hold on the trust or the legal
  arrangement similar to the trust;




• Prevent or attempt to prevent an audit by the Directorate of
  Economic Development.

Professionals who provide services or advice to a
trust set up or transferred in Monaco are also liable to a
fine if they do not communicate all the necessary information to
the trustee and the local representative of the trustee with whom
they are acting.

Finally, persons who fail to report the lack of
registration or any discrepancy between the information contained
in the Register of Trusts and those available to them shall be
liable to a fine and/or imprisonment.

This new arsenal of criminal sanctions will certainly not fail
to be used in view of the reproach made several times in the
Moneyval report on the failure of the Monegasque authorities to use
their power to impose sanctions. It is therefore essential to keep
all the information up to date and to ensure that it is consistent
with the information recorded.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.