International Fraud & Asset Tracing 2024 Comparisons

In Argentina, fraud claims can be brought both under criminal law (specifically the Argentine Penal Code) and civil law (via the Argentine Civil and Commercial Code). Fraud generally involves deceit or dishonesty used to unlawfully deprive someone of their rights, property, or money. Below are the key aspects of various fraudulent actions under Argentine law.

Making of False Statements (Fraud by Misrepresentation)

Fraud involving the making of false statements is criminalised under Article 172 of the Argentine Penal Code, which defines the crime of fraud (estafa). This provision applies to anyone who, by deceit or fraudulent means, causes harm to another’s property, resulting in unlawful gain for themselves or a third party. False representations, promises or omissions that lead to someone acting to their detriment are all covered under this article.

Punishment for fraud includes imprisonment ranging from one month to six years, depending on the severity of the case. If the fraud is committed by a public official, or if certain aggravating factors exist (eg, fraud against the elderly), harsher penalties may apply.

Making of Corrupt Payments (Bribery)

The making of corrupt payments or bribery is regulated under Articles 256 to 259 of the Argentine Penal Code. These provisions cover both active and passive bribery, meaning that both offering and accepting bribes are criminal offences, specifically:

• Article 256 addresses bribery of public officials, where an individual offers or gives a public official money or other benefits to perform or refrain from performing an act related to their duties.
• Article 258 bis deals with transnational bribery, particularly involving foreign public officials.
• Penalties for bribery range from two to six years of imprisonment, and additional fines may be imposed.

The Argentine Anti-Corruption Law (Law No 27.401) also applies in cases involving private entities, setting up corporate liability for bribery and corruption offences.

Conspiracy to Commit Fraud

Conspiracy to commit fraud is addressed under Article 210 of the Penal Code, which criminalises unlawful associations (asociación ilícita) formed with the purpose of committing criminal offences. Conspiracy to defraud would typically fall under this provision if two or more people agree to commit fraud together.

Penalties for conspiracy (as part of an unlawful association) range from three to ten years of imprisonment, depending on the seriousness of the conspiracy and whether additional crimes were committed in furtherance of the conspiracy.

Additionally, Article 173 of the Penal Code deals with specific types of fraudulent activities, such as misappropriation, and may apply to conspiratorial fraud when linked to such conduct.

Misappropriation

Misappropriation of funds or assets is also covered under Article 173 of the Penal Code. This article includes various forms of misappropriation, such as the fraudulent use of assets entrusted to an individual. Misappropriation may involve embezzlement, where someone in a position of trust (such as a company director or fiduciary) unlawfully appropriates property or funds that belong to another party.

Penalties for misappropriation vary, but imprisonment can range from one month to six years, depending on the nature and extent of the misappropriation. Aggravating factors, such as the misuse of public funds or breach of fiduciary duty, can lead to harsher penalties.

Civil Claims for Fraud

Under civil law, victims of fraud may file claims for damages under Articles 1737 and 1738 of the Argentine Civil and Commercial Code. These articles establish the right of individuals to seek compensation for harm caused by unlawful or negligent acts, including fraud. Civil claims for fraud aim to compensate the victim for their losses rather than punish the offender, although both criminal and civil actions may proceed in parallel.

This framework ensures that fraudulent activities, whether they involve deception, corrupt payments, conspiracy, or misappropriation, are subject to both criminal and civil accountability in Argentina.

If an agent receives a bribe, the principal has several causes of action available under both criminal and civil law. Bribery is considered a serious offence, particularly if it involves public or private agents, and there are specific provisions for addressing the consequences of such conduct.

Criminal Liability

Under Articles 256 to 259 of the Argentine Penal Code, bribery (whether public or private) is criminalised. These provisions apply to both the person giving the bribe (the “briber”) and the person receiving it (the “agent”). The principal can report the bribery to the criminal authorities, triggering a criminal investigation and prosecution. The relevant provisions include:

• Article 256 – This applies to bribery of public officials. If the agent is a public servant, both the agent and the briber can face imprisonment ranging from one to six years, along with disqualification from public office.
• Article 258 – This deals with bribery in the private sector. If the agent is a private individual who, as part of their business activities, accepts a bribe, they can face criminal sanctions. Penalties range from one to six years of imprisonment, depending on the circumstances.
• Article 259 – This provision criminalises anyone who accepts bribes to perform or refrain from performing any act in violation of their duties.

Civil Remedies

From a civil law perspective, the principal can seek damages for the harm caused by the agent’s misconduct. The relevant causes of action include:

• Action for Damages (Articles 1737 and 1738, Argentine Civil and Commercial Code) – The principal can claim compensation from both the agent and the person offering the bribe. Under these provisions, any party that causes harm through unlawful acts is liable to pay full compensation for the damages caused. In the case of bribery, the damages could include the loss of business opportunities, reputational harm, or any other economic impact suffered by the principal.
• Action for Restitution (Articles 773 to 778, Argentine Civil and Commercial Code) – If the bribe resulted in the agent obtaining unlawful profits at the expense of the principal, the principal may demand restitution. These provisions allow the principal to recover the amount of the bribe or any property gained by the agent due to the bribe.
• Unjust Enrichment (Article 1794, Argentine Civil and Commercial Code) – In cases where the agent unjustly benefits from the bribe, the principal can bring an action for unjust enrichment. This would compel the agent to return any undue benefit or profit acquired due to the bribe.

Breach of Fiduciary Duty

An agent who accepts a bribe is in breach of their fiduciary duty towards the principal. Under Argentine law, agents owe a duty of loyalty and good faith to their principals, and receiving a bribe constitutes a serious breach of this obligation. The principal can terminate the agency relationship and claim damages for any losses suffered due to the agent’s breach of fiduciary duty.

• Articles 10 and 961 of the Argentine Civil and Commercial Code – These articles outline the general principles of good faith and fiduciary obligations in contractual and agency relationships. If an agent breaches these duties, the principal can seek redress through a claim for damages.

Corporate Liability and Bribery

If the bribery involves a corporate agent, the principal can pursue claims under Law No 27.401, the Argentine Corporate Criminal Liability Law. This law establishes liability on the part of legal entities whose agents commit offences such as bribery or corruption. The principal can report the bribe to the authorities, potentially leading to corporate sanctions, including fines, debarment from public contracts, and compensation for damages.

These legal frameworks allow the principal to seek both criminal and civil redress when their agent has accepted a bribe.

In Argentina, parties who assist or facilitate fraudulent acts can face both civil and criminal liability under various provisions of the Argentine Penal Code.

Criminal Liability

According to Article 45 of the Argentine Penal Code, those who assist or facilitate a criminal act are considered “co-perpetrators or accomplices”. Accomplices (referred to as partícipes necesarios or partícipes secundarios) can face criminal liability if they contributed to the commission of the fraudulent act, even if they did not commit the primary offence themselves.

Additionally, Article 277 of the Penal Code addresses the criminal liability of those who assist in the concealment or laundering of fraudulently obtained assets. Under this article, if a party knowingly receives or handles assets derived from fraud or other illicit activities, they can be charged with “concealment” (encubrimiento), which is punishable by imprisonment ranging from six months to three years, depending on the severity of the case.

The specific charge of “money laundering” is addressed by “Law No 25.246” on the Prevention of Money Laundering. This law criminalises the receipt and use of assets obtained through illegal means, including fraud, and establishes penalties of three to ten years of imprisonment.

Civil Liability

In addition to criminal charges, civil claims can be made against those who assist in fraudulent activities under the Argentine Civil and Commercial Code. Victims of fraud may bring an action for “damages” (acción de daños y perjuicios) against those who aided in the commission of the fraud, including those who received fraudulently obtained assets. According to Article 1737 and Article 1738 of the Civil and Commercial Code, individuals who cause harm, whether directly or indirectly, through unlawful actions, can be held liable for full restitution of the damages caused.

In the end, this dual approach allows for both criminal sanctions against those who participate in fraudulent acts and civil compensation for the victims of such fraudulent acts.

In Argentina, the limitation periods for actions related to fraud vary depending on whether the claim is pursued under criminal or civil law. These time limits are designed to ensure that legal action is initiated within a reasonable period following the discovery of the fraudulent act.

Criminal Fraud Limitation Periods

Under the Argentine Penal Code, the statute of limitations for criminal offences, including fraud, is determined by the maximum penalty assigned to the crime. According to Article 62 of the Penal Code, the limitation period is based on the length of the potential sentence:

• For fraud (Article 172, Penal Code), which carries a penalty of one month to six years of imprisonment, the limitation period is six years from the date the offence was committed.
• For aggravated forms of fraud (such as those involving public officials or vulnerable victims), the limitation period may be extended, depending on the specific crime and its penalties. For example, fraud involving public officials can have a longer statute of limitations if additional penalties apply.

The limitation period begins to run from the time the fraudulent act is completed. However, Article 67 of the Penal Code states that if the fraud is concealed and discovered later, the limitation period will begin when the fraud is discovered by the victim. Furthermore, the statute of limitations can be interrupted by any action taken to investigate or prosecute the offence.

Civil Fraud Limitation Periods

For civil claims related to fraud, such as seeking compensation for damages, the limitation periods are established by the Argentine Civil and Commercial Code. These limitation periods vary depending on the type of claim.

General Civil Claims for Damages (Article 2561, Civil and Commercial Code)

The standard limitation period for filing a civil action for damages (including fraud) is three years from the date the claimant becomes aware of the fraud or the harm caused by it. This period applies to most claims for damages, including those arising from fraudulent misrepresentation or breach of fiduciary duty.

Unjust Enrichment (Article 2560, Civil and Commercial Code)

If a claim involves unjust enrichment, where the fraudulent party has gained financially at the expense of the victim, the limitation period is five years from the time the victim becomes aware of the unjust enrichment.

Restitution Claims (Article 2561, Civil and Commercial Code)

Restitution claims, such as those seeking to recover property or funds misappropriated by fraud, are subject to a three-year limitation period from the date the victim discovers the fraudulent act.

Fraud in Contractual Matters (Article 2560, Civil and Commercial Code)

If the fraud involves a breach of contract or fraudulent inducement into a contract, the limitation period is five years from the date the victim discovers the fraud or breach.

Suspension and Interruption of Limitation Periods

Both in civil and criminal matters, limitation periods can be suspended or interrupted in specific circumstances. For example:

• Suspension occurs when there is a legal or factual impediment to bringing the claim, such as the fraudulent concealment of the offence. In such cases, the limitation period does not start running until the impediment is removed.
• Interruption occurs when the victim takes certain legal steps, such as filing a formal complaint or initiating legal proceedings, which resets the limitation period. In criminal cases, any act of prosecution (such as filing a criminal complaint or conducting an investigation) interrupts the limitation period under Article 67 of the Penal Code.

Special Cases

Corporate Liability and Fraud (Law No 27.401)

Under the Corporate Criminal Liability Law, actions against legal entities for bribery, fraud or corruption have a limitation period of six years from the date of the offence. However, as with individual criminal actions, this period can be interrupted by the initiation of legal actions or investigations.

In Argentina, when a claimant seeks the recovery of property that has been misappropriated or which they have been fraudulently induced to transfer, there are several legal mechanisms in place that enable a proprietary claim over the converted proceeds of the fraud. These claims take precedence over unsecured creditors in the event of the defendant’s insolvency. The key rules and remedies are found within the Argentine Civil and Commercial Code and the Bankruptcy Law (Law No 24.522). Below are the rules and principles governing such claims.

Proprietary Claims and Recovery of Misappropriated Property

A claimant may pursue a proprietary claim under Article 773 and the following articles of the Argentine Civil and Commercial Code, which address the recovery of property or its proceeds when fraud is involved. This form of action allows the victim of the fraud to claim ownership of the property (or its equivalent value) that was wrongfully transferred or misappropriated.

Article 773 specifically allows a party whose property has been unlawfully transferred by fraud, to claim its recovery if they can demonstrate that the property, or its converted proceeds, still exists in the defendant’s estate. This remedy grants the claimant priority over unsecured creditors in insolvency proceedings, as the fraudulently transferred property (or its proceeds) is considered to belong to the victim rather than the debtor’s general estate.

Recovery of Funds Mixed With Other Funds

If the misappropriated property or funds have been mixed with other assets (eg, funds have been deposited into a mixed bank account), Article 774 of the Civil and Commercial Code provides a mechanism for the recovery of the proceeds of fraud, even when they are commingled. The law recognises the claimant’s right to trace and recover proportional ownership of the mixed assets.

If identifiable, the portion of the mixed assets corresponding to the fraudulently obtained property can be claimed. This is known as the principle of tracing, which allows the victim to recover the equivalent value of the proceeds that have been mixed with other funds.

In some cases, the principle of subrogation under Article 1788 may apply, whereby the claimant has the right to step into the position of the wrongdoer with respect to any rights over the mixed property.

Recovery of Proceeds and Gains From Fraudulently Obtained Property

If the fraudulently obtained property has been invested successfully, and has appreciated or generated profits, the claimant can seek recovery of the enhanced value or any gains made from the property. This is based on the principle that the victim retains a proprietary interest in the property and any proceeds derived from it.

Under Article 1794 of the Civil and Commercial Code, any unjust enrichment resulting from the misappropriation of property is subject to restitution. This means that any profits, interest or gains obtained from the fraudulent use of the claimant’s property must be returned to the victim in full. The claimant is entitled to recover both the original value of the property and any profits derived from its use or investment.

Priority in Insolvency Proceedings

In the context of insolvency, the Bankruptcy Law (Law No 24.522) provides that a proprietary claim takes precedence over the claims of unsecured creditors. If the fraudulently obtained property or its proceeds can be traced, they are not considered part of the insolvent estate available for distribution to general creditors. The property is instead returned to the rightful owner (the victim of the fraud).

This means that the victim can reclaim the fraudulently transferred property (or its proceeds) as a proprietary claim, giving them priority over other creditors. If the proceeds of the fraud are not easily identifiable, the victim may still have a preferential claim in insolvency, which ranks higher than the claims of unsecured creditors.

Subsequent Transfers to Third Parties

If the misappropriated property has been transferred to a third party, Article 777 of the Civil and Commercial Code allows for the recovery of the property unless the third party acquired it in good faith and for value. If the third party was aware of the fraud or received the property without paying full value, the victim can assert a claim to recover the property.

Even if the property cannot be recovered directly from the third party, the claimant may still be entitled to damages or the recovery of equivalent funds from the fraudster’s estate.

These rules ensure that victims of fraud in Argentina have strong legal grounds to recover their misappropriated property and any proceeds derived from it, even in complex cases where the assets have been commingled, invested or transferred.

In Argentina, there are no specific rules of pre-action conduct that apply exclusively to fraud claims. However, general procedural rules and practices under the Argentine Civil and Commercial Code and the Code of Civil and Commercial Procedure set out certain pre-action conduct that applies to all civil claims, including those related to fraud. These procedures aim to facilitate the resolution of disputes before a lawsuit is formally filed, potentially leading to settlement or clarification of the facts at an early stage.

Mandatory Mediation

In most jurisdictions within Argentina, including Buenos Aires, parties are required to undergo mandatory mediation before filing a civil lawsuit, including for fraud-related claims. This requirement is governed by Law No 24.573 (the “Mandatory Mediation Law”) and applies broadly to civil and commercial disputes.

• The purpose of mandatory mediation is to provide an opportunity for the parties to resolve their dispute without the need for formal litigation.
• The claimant must initiate the mediation process by filing a request with a mediator, and the respondent is required to participate. The mediation must be completed, or an attempt to mediate must be made, before the court will accept the case for litigation.
• If the mediation is unsuccessful, the claimant can proceed to file a lawsuit. The mediation process typically takes between one and three months, depending on the complexity of the case.

In the context of fraud claims, this mediation process allows the parties to potentially resolve the dispute early, which may be beneficial in cases involving complicated scenarios or where quick recovery of funds is crucial.

Letters of Demand and Notifications

Before initiating a fraud claim, it is common practice to send a letter of demand or notification to the alleged wrongdoer. This is not a strict legal requirement but is generally used to:

• provide notice of the alleged fraud;
• request the return of misappropriated property or compensation for damages; and
• set out a timeframe for the defendant to respond or comply with the request, often within a 15 to 30-day period.

Sending a letter of demand can also demonstrate good faith and show the court that the claimant made efforts to resolve the matter amicably before resorting to legal action. In cases involving fraud, this pre-action correspondence might also help clarify the extent of the fraud and establish the claimant’s position more clearly.

Preliminary Investigatory Actions (“Diligencias Preparatorias”)

Before filing a formal fraud claim, a claimant may request preliminary investigatory actions, known as diligencias preparatorias, under the Argentine Code of Civil and Commercial Procedure. These actions are meant to gather evidence or clarify facts that may be critical to the success of the claim, particularly in fraud cases where the exact scope or details of the fraud may not be fully known at the outset.

Examples of preliminary investigatory actions include:

• requesting documents from the alleged fraudster or third parties that may provide evidence of the fraudulent activity;
• taking witness statements under oath; and
• conducting expert evaluations or inspections to assess the value of the misappropriated property or to quantify damages.

These investigatory actions must be authorised by the court and can be a powerful tool in cases where the claimant needs to secure evidence before formally proceeding with the fraud claim.

Notarial Acts (“Actas Notariales”)

Another common pre-action step in fraud cases is to use a notarial act (acta notarial), where a notary public documents the facts surrounding the fraud, including any attempts to resolve the matter prior to litigation. This can serve as formal evidence in court to establish the facts that were presented to the other party before the claim was initiated.

Preliminary Injunctions (“Medidas Cautelares”)

In cases of fraud, especially where there is a risk that the defendant may dissipate assets, a claimant may apply for preliminary injunctions or freezing orders (medidas cautelares) before or during the litigation process. These are crucial in fraud claims to preserve assets or prevent further harm.

• Freezing orders (embargos): The claimant may request the court to freeze the defendant’s assets to ensure that the property or funds are available if a judgment is eventually made in favour of the claimant.
• Prohibitions of innovation (prohibiciones de innovar): These injunctions prevent the defendant from making any changes to the status of the property or assets in question during the course of the lawsuit.

Preliminary injunctions are granted by the court when the claimant can show that there is a reasonable likelihood of success on the merits of the fraud claim and that there is an urgent need to preserve the assets or prevent further harm.

Special Considerations for Criminal Fraud Claims

If the fraud is also the subject of a criminal complaint, the claimant may pursue criminal prosecution simultaneously or independently of civil proceedings. In Argentina, fraud is criminalised under Articles 172 and 173 of the Argentine Penal Code, and victims of fraud can file criminal complaints to trigger a criminal investigation.

In such cases, pre-action conduct is governed by the Criminal Procedure Code, and the pre-action phase might involve the filing of a formal criminal complaint with the police or prosecutor’s office, followed by investigatory actions (such as search and seizure or freezing of assets) initiated by the state.

These general rules of pre-action conduct provide mechanisms that can aid in resolving fraud disputes before they reach the courtroom, or help preserve assets and gather evidence to strengthen the claim.

Victims of fraud have several legal tools at their disposal to prevent a defendant from dissipating or concealing assets to avoid the consequences of a judgment. The most common and effective remedy in such cases is the preliminary injunction, commonly known as a freezing order (embargo). These injunctions are designed to preserve the defendant’s assets while litigation is ongoing, ensuring that sufficient funds or property are available to satisfy a judgment in favour of the claimant.

Freezing Injunctions (“Embargos”)

A freezing injunction or embargo is available to prevent a defendant from dissipating or concealing assets. This remedy is typically granted in personam but may also have in rem effects on specific assets. The injunction operates to restrict the defendant from transferring or otherwise dealing with their assets up to the value of the claim.

Operation

In personam – a freezing injunction binds the defendant personally, requiring them to refrain from transferring, selling, or otherwise dealing with their assets. This order applies directly to the defendant, and if they fail to comply, they may be subject to sanctions (detailed below).

In rem effects – while the order is directed at the defendant, it can also affect specific assets such as real estate, bank accounts, or movable property, preventing their sale or transfer. The court may issue orders to financial institutions, property registries, or other relevant parties to freeze the defendant’s assets.

Types of freezing orders

Precautionary seizure of assets (embargo preventivo) – a court may issue an order to seize or freeze specific assets of the defendant to secure the claimant’s rights until a final judgment is reached. This typically applies to bank accounts, real estate, or movable property.

Prohibition of innovation (prohibición de innovar) – this prevents the defendant from altering the status or ownership of assets during the litigation.

Court Fees

Court fees are payable when applying for a freezing injunction, and they are generally geared towards the amount of the claim. The court fees for such preliminary measures typically range between 1% and 3% of the value of the claim or the amount of assets being frozen. These fees are generally non-refundable, even if the injunction is granted, and they cover the administrative and procedural costs of the court.

Additionally, the claimant may need to pay notarial fees or registry fees if the freezing injunction involves the registration of an embargo over real estate or movable property. The costs of serving the injunction to third parties, such as banks, are also initially borne by the claimant.

Sanctions for Non-Compliance by the Defendant

If the defendant fails to comply with the freezing injunction, they may face significant legal consequences, including:

• Contempt of court (desacato) – the court can hold the defendant in contempt, which can lead to fines or imprisonment under Article 239 of the Penal Code for disobeying judicial orders.
• Attachment of additional assets – the court may issue further orders to attach more of the defendant’s assets or impose stricter measures to ensure compliance.
• Seizure and liquidation of assets – if the defendant continues to disregard the freezing order, the court may order the liquidation of the frozen assets to satisfy the claim.

In extreme cases, criminal proceedings can be initiated against the defendant for contempt of court or obstruction of justice if they attempt to hide or dissipate assets despite the injunction.

Cross-Undertaking in Damages

Under Argentine law, when a claimant applies for a freezing injunction or any other precautionary measure (such as an embargo), the court generally requires the claimant to provide a cross-undertaking in damages. This undertaking ensures that the defendant can be compensated if it is later determined that the freezing injunction was wrongfully granted or if the claimant loses the case.

The amount of the cross-undertaking is typically determined by the court and depends on the potential damage that the injunction might cause to the defendant. The undertaking is meant to cover any losses or damages suffered by the defendant as a result of a wrongful injunction, such as loss of business or harm to reputation.

In some cases, the court may require the claimant to post a security bond or other form of financial guarantee as part of the cross-undertaking to ensure that the defendant can be compensated if necessary.

Effect on Third Parties

The freezing injunction can also have significant effects on third parties, especially those holding or dealing with the defendant’s assets. The court can issue orders to third parties, such as:

• Banks – if the freezing injunction applies to the defendant’s bank accounts, the court may order the relevant financial institutions to freeze the accounts and prevent withdrawals or transfers. Banks are required to comply with the court’s order, and failure to do so may result in legal liability.
• Public registries – if the freezing injunction applies to real estate or movable property, the court may order the Public Registry of Property or Motor Vehicle Registry to record the embargo, preventing the transfer or sale of the property.
• Business partners or other third parties – if the defendant’s assets are held or controlled by other individuals or entities, those parties may also be subject to the injunction. They are required to comply with the court’s order or risk legal penalties.

In essence, third parties are bound by the terms of the freezing injunction once they are formally notified of it. If a third party knowingly assists the defendant in violating the injunction (eg, by facilitating the transfer of frozen assets), they may be held liable for aiding and abetting a breach of the court order and may face civil or criminal penalties.

Asset Tracing and Further Injunctions

If the defendant attempts to dissipate assets or transfer them to third parties after the injunction is issued, the claimant can request further injunctions to trace and freeze those assets. Argentine courts allow claimants to pursue tracing remedies, especially in cases of fraud, where the fraudulent proceeds may have been moved or concealed. These tracing remedies extend the reach of the freezing injunction to any assets that can be linked to the original fraud.

In Argentina, the procedure for requiring a defendant to disclose their assets is typically found under the Civil and Commercial Code, particularly in relation to precautionary measures (medidas cautelares). In this order, a claimant can request the court to impose a precautionary measure to secure assets pending judgment. This is outlined in Article 220 of the Civil and Commercial Code, which allows the court to order the defendant to provide information regarding their assets.

Distinction of Assets

The disclosure must encompass assets held directly by the defendant as well as those held by nominees on their behalf. This is to ensure that the claimant can trace assets that might otherwise be concealed.

Sanctions for Non-Compliance

If a defendant fails to comply with the court’s order for asset disclosure, they may face sanctions, which can include fines or, in more serious cases, coercive measures (Articles 500 and 505 of the Civil and Commercial Code).

Cross-Undertaking in Damages

In general, the claimant does not need to provide a cross-undertaking in damages when seeking precautionary measures. However, the court may assess the circumstances and decide if a cross-undertaking is necessary, depending on the potential impact on the defendant (Article 221 of the Civil and Commercial Code).

Procedures for preserving evidence when there is a risk of destruction or suppression are primarily governed by Article 220 of the Civil and Commercial Code, under precautionary measures. A party can request the court to order measures to preserve evidence and this can include the seizure of documents or other relevant materials.

Physical Search

The courts can permit a party to conduct a physical search of documents at the defendant’s residence or place of business. This typically requires the claimant to provide substantial evidence indicating that there is a risk of evidence being destroyed or hidden. The claimant must file a petition detailing the reasons for the request, and the court will evaluate the necessity and proportionality of the measure.

Requirements

To succeed in such a request, the claimant must demonstrate:

• a reasonable belief that the evidence is at risk of being destroyed;
• the specific documents or materials sought; and
• the relevance of the evidence to the case.

Cross-Undertaking in Damages

Generally, a claimant is not required to provide a cross-undertaking in damages when seeking preservation of evidence. However, the court may impose this condition at its discretion, particularly if there is a significant risk of harm to the defendant if the order is granted (Article 221).

Procedures for obtaining disclosure of documents and evidence from third parties are primarily governed by the Civil and Commercial Code, specifically through precautionary measures and other evidentiary procedures. Under Article 220 of the Code, a party may seek a court order to obtain documents or evidence from third parties if this is essential for their case. This is typically done through a request for a precautionary measure.

Pre-Commencement of Proceedings

These procedures can be invoked before the commencement of formal proceedings. A claimant can file a request to the court to gather evidence that may be crucial for the potential litigation (Article 221).

Restrictions on Use

The material obtained through these procedures is generally restricted to the specific case for which it was requested. The use of such evidence is limited to the proceedings in question, and parties must not disclose it outside of the legal context without court permission. Additionally, the confidentiality of certain documents may be protected, depending on their nature, such as those subject to legal privilege.

It is possible to seek procedural orders, such as those mentioned in 1.6 Rules of Pre-action Conduct, 1.7 Prevention of Defendants Dissipating or Secreting Assets, 2.1 Disclosure of Defendants’ Assets and 2.2 Preserving Evidence, without notifying the intended defendant, through what is known as an “ex parte” hearing. This is regulated under Article 220 of the Civil and Commercial Code. Such requests can be made where there is an urgent need to protect someone’s rights or prevent imminent harm that cannot wait for the usual notification process. The courts allow this in situations where notifying the defendant could lead to actions that undermine the effectiveness of the measure sought, such as the destruction of evidence or assets.

Appropriateness of Ex Parte Requests

This step is appropriate when:

• there is a clear and present danger of irreparable harm; and/or
• immediate action is required to safeguard the claimant’s rights.

Additional Burden on the Claimant

The claimant must provide:

• strong evidence demonstrating the urgency and necessity of the request; and
• detailed reasons why the defendant cannot be notified without compromising the objective of the precautionary measure.

Assessment of the Merits

The court will carefully assess the merits of the ex parte application, given the potential impact on the defendant’s rights. If granted, the court usually requires a subsequent hearing where the defendant can contest the order, thus ensuring fairness in the proceedings.

In Argentina, victims of fraud can seek redress against the perpetrator through the criminal process, which operates alongside civil claims. The interplay between these two processes can be complex.

Criminal Process

Victims can file a complaint with the public prosecutor’s office to initiate a criminal investigation for fraud, as defined under the Penal Code (Articles 173–177). The state prosecutes the offender, and victims can be considered private complainants (querellantes), allowing them to participate in the criminal proceedings.

Civil Claims

Victims may also pursue civil claims for damages resulting from the fraud. This can be done simultaneously or after the criminal process begins.

Interplay in Practice

Parallel proceedings

The criminal and civil processes can run concurrently. However, the outcome of the criminal case may influence the civil claim in terms of establishing liability.

Delays

The instigation of a criminal prosecution may cause delays in the civil proceedings, as courts might stay civil claims pending the outcome of the criminal case. This is due to the principle that findings in the criminal case can be binding or persuasive in the civil context.

Judicial discretion

Ultimately, the courts have discretion over whether to stay civil proceedings and will consider factors such as the complexity of the criminal case and the potential for prejudice to the parties involved.

It is possible to obtain a judgment without the need for a full trial under certain circumstances, particularly when a defendant is not participating or when the defence is deemed wholly without merit.

Default Judgment

If a defendant fails to respond to a summons or does not appear in court, the claimant can request a default judgment (sentencia en rebeldía), which allows the court to issue a judgment based on the claims made by the claimant (Article 170 of the Civil and Commercial Code).

Summary Judgment

A claimant may seek a summary judgment if the evidence clearly supports their claims and the defendant’s defence lacks merit. This requires the claimant to demonstrate that there are no genuine issues of material fact that warrant a full trial (Article 456 of the Civil and Commercial Code).

Requirements

In both cases, the claimant must provide sufficient documentation and evidence to support their claims. The court will review the materials submitted before issuing a judgment.

When pleading fraud, it is essential to adhere to the principles outlined in the Argentine Criminal Code, particularly in Article 173, which defines the crime of fraud. The prosecution must present cogent evidence to substantiate the allegations, as stipulated in Article 1 of the Code, which emphasises the necessity for proof beyond reasonable doubt in criminal matters.

Additionally, legal professionals must consider the professional conduct rules established by the Argentine Bar Association, which require attorneys to act with integrity and avoid making unwarranted allegations. Article 6 of the Code of Ethics mandates that lawyers must base their claims on sufficient evidence to prevent frivolous or baseless accusations.

In Argentina, claims against “unknown” fraudsters can be pursued under certain circumstances. Article 174 of the Argentine Criminal Code allows for the prosecution of fraud even when the perpetrator is unidentified. Victims can file a complaint with the judiciary, initiating an investigation that may lead to the identification of the fraudster.

Furthermore, Article 77 of the Criminal Procedure Code permits the initiation of proceedings based on anonymous or undisclosed complaints, provided there is sufficient preliminary evidence to justify the investigation. However, it is crucial that the complaint outlines specific details of the fraudulent acts, as vagueness may hinder the progress of the case.

While pursuing claims against unknown fraudsters is possible, the burden of proof remains on the claimant, who must establish the occurrence of fraud to facilitate further investigation.

The powers to compel witnesses to give evidence are primarily governed by the Criminal Procedure Code. Article 204 provides that witnesses can be summoned to testify in criminal proceedings. If a witness fails to appear without just cause, Article 206 allows the court to impose fines or, in certain cases, issue a coercive order for their attendance.

Additionally, Article 207 outlines that witnesses are legally obliged to testify, and those who refuse without a valid reason may face penalties, including imprisonment for contempt of court. Furthermore, Article 208 states that witnesses can be compelled to provide documentary evidence relevant to the case.

These measures ensure that the judicial process can proceed effectively, allowing the courts to gather the necessary evidence to adjudicate cases fairly.

In Argentina, the attribution of a corporate director’s or officer’s knowledge to the company they represent is primarily addressed under the principles of corporate liability established in the Argentine Civil and Commercial Code, particularly Articles 163 and 164. These provisions state that a corporation can be held liable for the acts of its directors and officers when they act within the scope of their authority.

In cases of fraud, Article 174 of the Criminal Code further clarifies that the knowledge and intent of a corporate officer can be attributed to the company if the officer acted in the course of their duties and for the benefit of the corporation. This means that if a director engages in fraudulent activities on behalf of the company, both the individual and the corporate entity may be held liable.

Moreover, Article 30 of the Code also allows for the imposition of joint liability in cases where the actions of individuals in positions of authority directly lead to the fraudulent conduct of the company. This legal framework ensures that corporations cannot evade responsibility for fraudulent actions conducted by their representatives.

Claims against those who stand behind companies, such as ultimate beneficial owners, can be pursued under certain conditions when the company has been used as a vehicle for fraud. The concept of “lifting the corporate veil” is applicable in cases where there is evidence of abuse of the corporate form, as outlined in Article 54 of the Civil and Commercial Code.

This provision allows courts to disregard the separate legal personality of a company and hold its shareholders or beneficial owners personally liable if it is established that they acted in bad faith, engaged in fraudulent conduct, or used the corporate structure to evade legal obligations.

Additionally, Article 173 of the Criminal Code, which deals with fraud, can also be applied to hold individuals accountable when it can be proved that they directly participated in the fraudulent acts or significantly influenced the company’s operations to commit fraud.

Thus, while the corporate structure typically provides limited liability, circumstances involving fraudulent intent or misconduct can lead to personal liability for those behind the company.

The shareholders have the ability to bring claims on behalf of their company against fraudulent directors through a legal mechanism known as derivative action (acción de responsabilidad). This is governed by the Argentine Civil and Commercial Code, particularly the following articles:

• Article 147 allows shareholders to initiate actions against directors for breaches of their fiduciary duties or for acts of fraud that harm the company. To do so, shareholders must hold a certain percentage of shares, usually at least 5%, and demonstrate that the directors’ actions have caused damage to the corporation.
• Article 148 specifies that if the board of directors fails to act against a director who has committed fraud, the shareholders can directly file a lawsuit on behalf of the company. This is intended to protect the interests of the corporation when those in control are unwilling or unable to address misconduct.

In summary, these provisions empower shareholders to act in the company’s interest when fraudulent directors exert control – ensuring accountability and protecting the company’s assets.

The joinder of overseas parties in fraud claims is facilitated by the Civil and Commercial Code, particularly through Articles 12 and 13, which outline jurisdictional rules for civil matters. These provisions allow Argentine courts to hear cases involving foreign defendants if there is a substantial connection to Argentina, such as, it is the location of the fraud, the fraudulent act has had a negative effect on Argentine entities, or Argentine residents are somehow involved.

Additionally, the Argentine Code of Civil Procedure permits the inclusion of foreign parties in claims, provided that the court has jurisdiction over the matter:

• Article 40 allows for the summons of foreign defendants; and
• Article 41 stipulates the requirements for service of process internationally, often utilising treaties like The Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents.

Regarding extraterritorial jurisdiction – Argentine courts may assert jurisdiction over foreign parties when the fraudulent act has effects within Argentina or when the defendant has sufficient ties to the country. This is particularly relevant in cases involving transnational fraud, where the courts seek to ensure that justice is served even when the defendants are located abroad.

Overall, these rules enable effective legal action against overseas parties in fraud cases, promoting accountability, and safeguarding the rights of victims in Argentina.

The procedure for serving parties outside the jurisdiction of Argentina is governed by the Code of Civil Procedure, specifically Articles 40 to 43. The primary method of service is through diplomatic channels or via the central authority designated under international treaties, such as The Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents.

To expedite service, parties may consider the following options:

• The Hague Convention – if the receiving country is a signatory, service through the designated central authority can be streamlined, ensuring compliance with local laws.
• Direct service – in some cases, the court may allow direct service if the foreign party consents to it or if there is a bilateral agreement in place.
• Alternative methods – Article 43 provides that, in certain circumstances, the court may authorise alternative methods of service, such as electronic means or postal service, particularly when traditional methods prove impractical or are excessively delayed.
• Judicial assistance – seeking judicial assistance from local courts in the foreign jurisdiction may also be a viable option to expedite service.

The usual methods of enforcement for judicial decisions include:

• Asset seizure (embargo) – under the Civil Procedure Code, a creditor can request the seizure of a debtor’s assets to secure the satisfaction of a judgment. This can include bank accounts, real estate, and personal property.
• Wage garnishment (aprehensión de sueldo) – the courts can order that a portion of a debtor’s salary be withheld and directed to the creditor until the debt is satisfied, as per Article 508 of the Civil Procedure Code.
• Judicial auction (remate judicial) – if assets are seized, they may be sold at a public auction to satisfy the creditor’s claim, following the procedures outlined in the Civil Procedure Code.
• Execution of specific performance – in some cases, the court may order the debtor to perform a specific act, such as fulfilling a contract or paying a debt directly, as stated in Article 601.
• Contempt of court – if a party fails to comply with a court order, the court may impose fines or other penalties to compel compliance.
• International enforcement – Argentina is a party to various international treaties that facilitate the recognition and enforcement of foreign judgments, which can be leveraged in cross-border cases.

Defendants in fraud claims can invoke the privilege against self-incrimination, which is enshrined in Article 18 of the Argentine Constitution. This article guarantees the right to remain silent and not provide self-incriminating evidence.

Circumstances under which a defendant may invoke this privilege include:

• direct testimony – when the defendant is required to testify about facts that could potentially implicate them in criminal conduct; and
• document production – if a court orders the production of documents that may contain self-incriminating information, the defendant can refuse based on this privilege.

In terms of inferences, the invocation of the privilege against self-incrimination does not, by itself, imply guilt. However, the court may take into account the refusal to provide evidence when assessing the overall context of the case.

Article 19 (Argentine Code of Criminal Procedure) states that the right to silence cannot be interpreted as an admission of guilt, yet the courts may consider the refusal as a factor in their deliberations, depending on the specifics of the case.

The principle of lawyer-client privilege is recognised under Article 156 of the Civil and Commercial Code, which protects communications between a lawyer and their client. This privilege is fundamental to ensuring confidentiality and fostering open communication.

However, this privilege can be undermined under specific circumstances, particularly in relation to fraudulent activities:

• Crime-fraud exception – if a communication is made in furtherance of a crime or fraud, the privilege may not apply. This principle allows for the disclosure of documents and communications that are created with the intent to commit or further a fraudulent act.
• Evidence of fraudulent intent – if there is credible evidence indicating that the communications or documents were generated with the specific purpose of facilitating fraud, the courts may determine that the privilege does not protect these materials from discovery.
• Judicial review – the courts may review the documents in camera (privately) to assess whether the crime-fraud exception applies, thus potentially allowing access to otherwise privileged communications if they relate to unlawful conduct.

In summary, while the confidentiality of lawyer-client communications is generally protected, any documents or communications created in the context of fraud may lose this privilege, allowing for their disclosure in civil proceedings.

Punitive or exemplary damages are not commonly awarded in fraud claims. The legal framework primarily focuses on compensatory damages aimed at restoring the victim’s position rather than punishing the wrongdoer. However, there are some relevant points to consider:

• Compensatory damages – under Article 1740 of the Civil and Commercial Code, damages must be directly linked to the loss suffered due to the fraudulent act, and are intended to restore the injured party to their prior state.
• Fraud as an aggravating factor – while punitive damages per se are not recognised, the presence of fraud can lead to the court considering higher compensatory damages, reflecting the severity of the wrongdoing.
• Civil liability for criminal acts – if the fraud involves criminal conduct, such as embezzlement, the victim may also seek compensation through civil liability, which could include additional penalties, although these are still fundamentally compensatory rather than punitive.

While Argentina does not typically recognise punitive or exemplary damages in fraud claims, courts may take the nature of the fraud into account when determining the appropriate level of compensatory damages.

Banking secrecy is primarily governed by the Financial Entities Law (Law No 21,526) and the Argentine Central Bank regulations. These laws protect the confidentiality of customer information held by banks and financial institutions.

However, there are circumstances under which banking secrecy can be circumvented for evidence in fraud claims:

• Judicial orders – the courts can issue orders to banks to provide information if there is a reasonable suspicion of fraud. This is typically done in the context of a criminal investigation or civil lawsuit where the disclosure is necessary for the case.
• Legal exceptions – articles within the Financial Entities Law specify exceptions to banking secrecy, allowing for disclosures in cases involving money laundering, tax evasion, or fraud.
• Consent – if a customer consents to the disclosure of their banking information, the bank may provide the requested data without breaching secrecy.
• Prosecutorial requests – in some cases, prosecutors may request banking information as part of their investigation into fraud, which can be obtained through the appropriate legal channels.

While banking secrecy is strongly protected, these provisions allow for its circumvention in cases where fraud is suspected, ensuring that relevant evidence can be accessed to uphold justice.

In Argentina, crypto-assets are generally treated as property, although they are not classified as legal tender. The Argentine Central Bank has issued guidelines indicating that cryptocurrencies are considered digital assets and can be owned and transferred.

Legal Treatment

• Property status: under the Civil and Commercial Code, crypto-assets can be classified as “goods” or “property” and are thus subject to ownership rights.
• Regulatory framework: the National Securities Commission (Comisión Nacional de Valores) has begun to regulate crypto-assets, focusing on investor protection and compliance with anti-money laundering (AML) regulations.

Freezing Relief

• Judicial orders: it is possible to obtain freezing orders for crypto-assets through the courts. These orders can be applied to prevent the transfer or dissipation of crypto-assets pending the outcome of litigation.
• Co-ordination with exchanges: practical enforcement may involve co-ordinating with cryptocurrency exchanges to freeze accounts or assets associated with the defendant.

Issues in Fraud Cases

• Anonymity and traceability: the pseudonymous nature of many cryptocurrencies can complicate fraud investigations, making it challenging to identify perpetrators and trace assets.
• Jurisdictional challenges: fraud involving crypto-assets often crosses international borders, raising jurisdictional issues and complicating legal proceedings.
• Lack of regulation: the evolving regulatory landscape can create uncertainties regarding the legal status of certain crypto-transactions and assets.

Argentina recognises crypto-assets as property and allows for legal actions to protect such assets, but there are unique challenges associated with fraud involving these digital currencies that may affect investigations and enforcement.