Procedures for freezing funds and economic resources in application of international economic sanctions: new regime resulting from Sovereign Order No. 8.664 of 26 May 2021

Sovereign Order No. 8.664 of 26 May 2021 on procedures for freezing funds and economic resources in application of international economic sanctions (UN, EU and France) replaces Sovereign Orders No. 15.321 of 8 April 2002 on procedures for freezing funds in order to combat terrorism, as amended, and No. 1.675 of 10 June 2008 on procedures for freezing funds implementing economic sanctions, as amended.

-> Adoption of measures to freeze funds and economic resources

Measures to freeze funds and economic resources necessary for the implementation of economic sanctions decreed by the United Nations[1], the European Union[2] or France[3] are now enacted by ministerial decision (Minister of State), and no longer by ministerial orders.

Decisions of the Minister of State may be appealed before the Court of First Instance within two months of the date of their publication in a dedicated section accessible from the website of the Princely Government.

The list of ministerial decisions of the Minister of State can be consulted at the following address: https://service-public-entreprises.gouv.mc/En-cours-d-activite/Obligations-legales-et-comptables/Mesures-de-gel-de-fonds/Decisions-Ministerielles

-> Creation of a national list of natural or legal persons, entities or bodies subject to a freezing order of funds and economic resources

The national list, maintained and updated by the Budget and Treasury Department, is published on the Government of Monaco’s website for information purposes. Only the decisions adopted by the Minister of State are authentic.

-> Automatic inclusion in the lists of targeted financial sanctions drawn up by the United Nations Security Council or its competent committees (giving rise to an implicit decision to freeze by the Minister of State)

Sovereign Order 8.664 of 26 May 2021 establishes the principle of the direct and immediate application of measures to freeze funds and economic resources adopted by the United Nations Security Council (UNSC) or its competent committees, as soon as they are published on the UNSC website.

Implied freezing orders of the Minister of State may be appealed to the Court of First Instance within two months of the date on which they were issued.

Any breach of the provisions of Sovereign Order No. 8.664 dated 26 May 2021 is punishable by a fine of between 18,000 and 90,000 euros.

The obligations to report suspicions imposed on persons subject to Act No. 1.362 of 3 August 2009 on the fight against money laundering, terrorist financing and corruption, as amended, are extended to transactions and facts concerning natural or legal persons covered by measures to freeze funds and economic resources necessary for the application of economic sanctions decreed by the United Nations, the European Union or the French Republic.

Press releases concerning changes to the sanctions list are published at: https://www.un.org/press/fr/content/security-council/press-release

The United Nations Security Council Consolidated Sanctions List can be found at: https://www.un.org/securitycouncil/fr/content/un-sc-consolidated-list.

The Government of the Principality’s dedicated webpage: https://service-public-entreprises.gouv.mc/En-cours-d-activite/Obligations-legales-et-comptables/Mesures-de-gel-de-fonds

[1] Under Chapter VII of the UN Charter, the UN Security Council (UNSC) is empowered to take coercive measures (Article 39), including measures not involving the use of armed force (Article 41). These sanctions, often referred to as “targeted sanctions” or “smart sanctions”, are a freeze on financial assets, funds and other economic resources. Sanctions Committees draw up lists of targeted individuals and monitor the implementation of sanctions, based on information provided by states. UN Member States must adopt national implementation measures.

[2] The European Union Sanctions List (available here: https://data.europa.eu/data/datasets/consolidated-list-of-persons-groups-and-entities-subject-to-eu-financial-sanctions?locale=fr) is a consolidated list of countries, entities and individuals that are engaged or suspected of being engaged in money laundering or terrorist financing activities – and are therefore subject to economic sanctions by the European Union (EU). EU sanctions are linked to UN Security Council resolutions (available here: https://www.un.org/securitycouncil/fr/content/resolutions), but the EU imposes its own sanctions, in line with its foreign policy objectives. The implementation of sanctions follows from the adoption of directly applicable regulations.

[3] The Principality of Monaco has committed to France to duplicate on its territory the French freezing measures taken in the context of the fight against terrorist financing on the basis of Article L. 562-2 of the French Monetary and Financial Code. It should be noted that transfers and remittances between the French Republic and the Principality of Monaco are treated as national transfers and remittances, within the meaning of and in accordance with the provisions of Regulations (EU) No. 1781/2006 and No. 2015/847.

Related Monegasque texts:

Arrêté ministériel n° 2021-394 du 26 mai 2021 abrogeant les arrêtés ministériels pris pour l’application de l’Ordonnance Souveraine n° 15.321 du 8 avril 2002 relative aux procédures de gel des fonds aux fins de lutte contre le terrorisme, modifiée, et de l’Ordonnance Souveraine n° 1.675 du 10 juin 2008 relative aux procédures de gel des fonds mettant en œuvre des sanctions économiques, modifiée (repeals the Ministerial Orders implementing Sovereign Order No. 15.321 of 8 April 2002 on procedures for freezing funds in order to combat terrorism, as amended, and Sovereign Order No. 1.675 of 10 June 2008 on procedures for freezing funds implementing economic sanctions, as amended)

Loi n° 1.362 du 3 août 2009 relative à la lutte contre le blanchiment de capitaux, le financement du terrorisme et la corruption, modifiée (Legislation on the fight against money laundering, terrorist financing and corruption)

Ordonnance n° 3.559 du 5 décembre 2011 rendant exécutoire l’Accord monétaire conclu le 29 novembre 2011 entre l’Union européenne et la Principauté de Monaco (Monetary Agreement between the European Union and the Principality of Monaco)

Ordonnance n° 7.386 du 8 mars 2019 rendant exécutoire l’Accord par échange de lettres des 3 et 12 décembre 2018 entre le Gouvernement de la République française et le Gouvernement de la Principauté de Monaco relatif à la réglementation bancaire applicable dans la Principauté de Monaco (Agreement between the Government of the French Republic and the Government of the Principality of Monaco on banking regulations applicable in the Principality of Monaco)