Receivership in the public interest is in the interests of public safety. It differs fundamentally from private sequestration. The State uses it as an instrument of coercion or collective protection.
General characteristics of general interest receiverships
Distinction from private receiverships
General interest receivership has three essential characteristics:
- It covers all assets, present and future.
- It is not precautionary but preparatory to confiscation.
- The fact that it is a matter of public policy prohibits any transaction or waiver.
This mechanism only ends with the security measure that justifies it.
Public policy nature and consequences
The general interest receivership is binding on the parties. Its principle cannot be contested.
Public policy justifies derogations from ordinary law:
- Immediate divestiture of the owner
- Application to future assets
- Rapid foreclosure of late creditors
Settlement of liabilities and protection of creditors
Article 2285 of the Civil Code applies: the debtor's assets remain the pledge of his creditors.
The liquidation of the sequestrated assets is used first to pay the liabilities:
- Mortgages on real estate
- Pledged creditors for movables
- Unsecured creditors
Creditors must declare their claims within three months of publication in the Official Journal. Once this period has elapsed, foreclosure will apply.
Role of the public prosecutor and judicial intervention
The procedure begins with a declaration to the Public Prosecutor and the Director of Public Lands.
The president of the judicial court takes the necessary decisions:
- Cancellation of acts subsequent to the receivership
- Division of undivided property
- Settlement of management disputes
Only the Public Prosecutor can refer a case to the judge, on the basis of a report from the Director of Public Lands.
The main types of general interest receiverships
Sequestration of enemy property
This sequestration has a long tradition:
- The enemy of the law (State, legal entities, individuals)
- The de facto enemy (supporters of the enemy)
The Land Administration managed these properties during the conflict.
Assets linked to terrorism and organised crime
The fight against terrorism uses sequestration as an economic weapon.
The French law of 15 November 2001 on everyday security allows terrorist funds to be sequestered.
This mechanism functions as an instrument of prevention and international pressure.
Historical cases and modern developments
Several historical cases illustrate the use of general interest sequestration:
- Assets of collaborators (1944-1951)
- Press companies (1944-1946)
- Jewish property (1940-1944)
These historic sequestrations still raise questions about compensation.
Receivership for tax offences
Article 1751 of the General Tax Code authorises sequestration for breaches of invoicing rules.
The receivership can be extended:
- To the fraudster's company
- All personal assets
This measure is taken at the request of the public prosecutor or by decision of the interim relief judge.
Sequestration in criminal cases
Evolution: from contumacy to criminal default
Until 2004, in absentia, the assets of the absent defendant were sequestered.
The Act of 9 March 2004 replaced contumacy with criminal default. This reform meets the requirements of the European Court of Human Rights.
Systematic sequestration of assets has disappeared with this reform.
Seizure under criminal law and the role of the Seized Asset Management Agency
The Act of 9 July 2010 introduced new criminal seizure and confiscation measures.
The Agency for the Management and Recovery of Seized and Confiscated Assets (AGRASC) replaces the traditional sequestration system. This agency:
- Manages seized assets
- Adds value to assets
- Makes advance sales
- Centralises seized sums
The owner remains responsible for the upkeep of the property, unless there is a fault that warrants AGRASC's intervention.
Specific features of the Armed Forces Court
The Code of Military Justice maintains a procedure similar to that of in absentia. Defaulters have their assets sequestered for the duration of the proceedings.
This escrow applies to:
- The crimes
- The offence of insubordination
- The offence of desertion
Sequestration continues even after conviction if confiscation is not ordered.
The legal regime for public interest receiverships
Installation and operation
The administration des Domaines receives the property and draws up a full inventory.
The receivership automatically extends to future assets without any additional formalities.
The administration can:
- Perform administrative tasks
- Leasing
- Continuing commercial operations
- Legal defence
Expiry and termination terms
The receivership is terminated for four reasons:
- A confiscation order
- Discharge of the owner
- Sale of assets (after ten years without judicial authorisation)
- The statute of limitations
Release does not occur if the defaulting party is apprehended. The receivership continues until a final judgement is handed down.
Administrative liability and remedies
The Estates Department may be held liable for mismanagement.
Proceedings against the administration are subject to the formality of the preliminary brief (article R. 2331-10 of the General Code of Public Property).
Interest on the sums awarded will accrue from the date of the decision, unless a specific reason is given.
Legal protection against state sequestration
Sequestration in the public interest is a serious interference with the right to property. Their application requires a legitimate reason and a strict procedural framework.
The assets at stake are considerable. Our firm can advise you on the legal implications of administrative receiverships. Contact us to assess your situation and defend your rights.
Sources
- General Tax Code, article 1751
- Code of Military Justice, articles L. 251-1 to L. 252-8
- Code général de la propriété des personnes publiques, article R. 2331-10
- Act no. 2010-768 of 9 July 2010 to facilitate seizure and confiscation in criminal matters
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