[Federal Register Volume 76, Number 89 (Monday, May 9, 2011)]
[Proposed Rules]
[Pages 26660-26678]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-9826]
[[Page 26660]]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Part 1316
DEPARTMENT OF JUSTICE
28 CFR Parts 8 and 9
[Docket No. OAG 127; AG Order No. 3263-2011]
RIN 1105-AA74
Consolidation of Seizure and Forfeiture Regulations
AGENCY: Department of Justice.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Department of Justice (the Department) proposes to revise,
consolidate, and update its seizure and forfeiture regulations, to
conform those regulations to the Civil Asset Forfeiture Reform Act
(CAFRA) of 2000 to reflect organizational changes that have occurred
within the Department, and to make other changes.
DATES: Written comments must be postmarked and electronic comments must
be submitted on or before July 8, 2011. Commenters should be aware that
the electronic Federal Docket Management System (FDMS) will not accept
comments after Midnight Eastern Time on the last day of the comment
period.
ADDRESSES: Comments may be mailed to Legal Policy, Asset Forfeiture and
Money Laundering Section, Criminal Division, U.S. Department of
Justice, 1400 New York Avenue, NW., Bond Building, Tenth Floor,
Washington, DC 20005. Comments are available for public inspection at
the above address by calling (202) 514-1263 to arrange for an
appointment. To ensure proper handling, please reference OAG Docket No.
127 on your correspondence. You may submit comments electronically or
view an electronic version of this proposed rule at http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Beliue Risher, Editor, 1400 New York
Avenue, NW., Room 2218, Bond Building, Washington, DC 20530. Telephone:
(202) 514-1263.
SUPPLEMENTARY INFORMATION:
POSTING OF PUBLIC COMMENTS: Please note that all comments received
are considered part of the public record and made available for public
inspection online at http://www.regulations.gov. Such information
includes personal identifying information (such as your name, address,
etc.) voluntarily submitted by the commenter.
If you want to submit personal identifying information (such as
your name, address, etc.) as part of your comment, but do not want it
to be posted online, you must include the phrase ``PERSONAL IDENTIFYING
INFORMATION'' in the first paragraph of your comment. You also must put
all the personal identifying information you do not want posted online
in the first paragraph of your comment and identify what information
you want redacted.
If you want to submit confidential business information as part of
your comment but do not want it to be posted online, you must include
the phrase ``CONFIDENTIAL BUSINESS INFORMATION'' in the first paragraph
of your comment. You also must prominently identify confidential
business information to be redacted within the comment. If a comment
has so much confidential business information that it cannot be
effectively redacted, all or part of that comment may not be posted on
http://www.regulations.gov.
Personal identifying information and confidential business
information identified and located as set forth above will be placed in
the agency's public docket file, but not posted online. If you wish to
inspect the agency's public docket file in person by appointment,
please see the FOR FURTHER INFORMATION CONTACT paragraph.
The reason that the Department is requesting electronic comments
before Midnight Eastern Time on the day the comment period closes is
because the inter-agency FDMS, which receives electronic comments at
www.regulations.gov, terminates the public's ability to submit comments
at Midnight Eastern Time on the day the comment period closes.
Commenters in time zones other than Eastern may want to take this
fact into account so that their electronic comments can be received.
The constraints imposed by the FDMS online system do not apply to
comments submitted via U.S. mail, which will be considered as timely
filed if they are postmarked before Midnight on the day the comment
period closes.
I. Overview
First, the proposed rule recognizes that the Bureau of Alcohol,
Tobacco, Firearms, and Explosives (ATF) is now part of the Department
of Justice. On November 25, 2002, the President signed into law the
Homeland Security Act (HSA) of 2002, Public Law 107-296, 116 Stat.
2135. Section 1111 of the HSA established in the Department of Justice
the ``Bureau of Alcohol, Tobacco, Firearms, and Explosives'' and
generally transferred law enforcement functions, and seizure and
forfeiture authority, of the Bureau of Alcohol, Tobacco, and Firearms
from the Department of the Treasury to the Department of Justice. This
transfer became effective on January 24, 2003. By this rule, the
Department proposes consolidating its regulations governing the seizure
and administrative forfeiture of property by ATF, the Drug Enforcement
Administration (DEA), and the Federal Bureau of Investigation (FBI).
Among other things, this rulemaking identifies the scope of these
regulations, updates definitions, identifies the scope of authority
available to each seizing agency (ATF, DEA, and FBI) to seize property
for forfeiture, and provides procedures governing practical issues
regarding the seizure, custody, inventory, appraisal, settlement, and
release of property subject to forfeiture. See proposed sections 8.1-
8.7 of this rule.
Second, the rule proposes conforming the seizure and forfeiture
regulations of ATF, DEA, FBI, and the Department's Criminal Division to
address procedural changes necessitated by the Civil Asset Forfeiture
Reform Act (CAFRA) of 2000, Public Law 106-185, 114 Stat. 202. The rule
also incorporates CAFRA's innocent owner defense into the remission
regulations. Where CAFRA is silent or ambiguous on a subject relating
to administrative forfeiture procedure, the proposed rule interprets
CAFRA based on case law and agency expertise and experience.
Third, the rule proposes updating the regulations to conform with
other authorities and current forfeiture practice. Thus, proposed Sec.
8.14 adds a provision to the Department's regulations allowing for the
pre-forfeiture disposition of seized property when the property is
liable to perish or to waste or to be greatly reduced in value while
being held for forfeiture, or when the expense of holding the property
is or will be disproportionate to its value. Section 8.11 clarifies
that administrative and criminal judicial forfeiture proceedings are
not mutually exclusive, and Sec. 8.16 affirms that the United States
is not liable for attorney fees in any administrative forfeiture
proceeding. Section 8.23 adds a provision defining the allowable re-
delegations of authority under the regulations. Section 8.9(a)(1)
updates the forfeiture regulations by adding the option of publishing
notice for administrative forfeitures on an official
[[Page 26661]]
government Internet site instead of in a newspaper.
Fourth, the proposed rule amends the list of designated officials
at 28 CFR part 9 governing petitions for remission or mitigation of
forfeiture, clarifies the existing regulations pertaining to victims,
and makes remission available to third parties who reimburse victims
under an indemnification agreement.
II. Discussion
A. Consolidation of the Regulations Governing the Seizure and
Forfeiture of Property by ATF, DEA, and FBI
Consolidating the forfeiture regulations used by ATF (formerly 27
CFR part 72), DEA (21 CFR part 1316, subparts E and F), and FBI (28 CFR
part 8 and 21 CFR part 1316, subparts E and F) will achieve greater
consistency within the Department and will promote overall fairness in
the administrative forfeiture process.
The proposed rule removes 21 CFR part 1316, subparts E and F and
replaces them by adding an amended 28 CFR part 8 governing the seizure
and forfeiture of property by each agency. Part 8 is divided into
subparts A, B, and C. Subpart A contains generally applicable
provisions for seizures and forfeitures by ATF, DEA, and FBI. Subpart B
contains expedited procedures for property seized by DEA and FBI for
violations involving personal use quantities of a controlled substance.
Subpart C includes the permitted re-delegations of authority under
these regulations.
However, this consolidation does not constitute the entirety of the
Department's forfeiture regulations. ATF continues to enforce and
administer the provisions of the National Firearms Act (NFA), ch. 757,
48 Stat. 1236 (1934) (codified at 26 U.S.C. ch. 53). Pursuant to 18
U.S.C. 983(i)(2), Internal Revenue Code forfeitures, including NFA
forfeitures, are not subject to CAFRA's procedural requirements. NFA
civil forfeiture procedure is governed, for the most part, by the
Customs laws (19 U.S.C. 1602-1618) including the notice and cost bond
requirements. In addition, pursuant to the Customs laws, the
Government's initial burden of proof in an NFA civil forfeiture is to
demonstrate probable cause to believe that the property is forfeitable.
Further, there is no innocent ownership defense to forfeiture under the
NFA. However, NFA forfeitures are subject to CAFRA's attorney fees
requirement.
B. CAFRA Procedural Changes Incorporated in the Proposed Rule
CAFRA's section 2 created 18 U.S.C. 983, which includes the general
rules for civil forfeiture proceedings. This rule proposes to implement
certain procedural changes in the conduct of administrative forfeitures
as required by 18 U.S.C. 983. These changes address procedures relating
to notice of seizure, filing of claims, hardship requests, and releases
of property.
Notice of seizure. Section 983(a)(1) establishes time deadlines and
other procedures for the sending of personal written notices of
seizures to parties with a potential interest in the property. These
time deadlines and procedures are in addition to, and in some respects
different from, procedures under the Customs laws. The Customs laws
forfeiture procedures (19 U.S.C. 1602-1618), which are incorporated by
reference ``insofar as applicable'' in forfeiture statutes enforced by
the Department of Justice (e.g., 21 U.S.C. 881(d)), require that
``[w]ritten notice of seizure together with information on the
applicable procedures shall be sent to each party who appears to have
an interest in the seized property.'' See 19 U.S.C. 1607. CAFRA, as
codified at 18 U.S.C. 983(a)(1), requires that notice be sent within 60
days of seizure, or within 90 days of a seizure by a state or local
agency, or within 60 days of establishing the interested party's
identity if it is not known at the time of seizure. CAFRA also provides
that a supervisory official of the seizing agency may grant a single
30-day extension if certain conditions are satisfied and that
extensions thereafter may only be granted by a court. Section 8.9 of
the proposed rule incorporates these notice-related provisions of
CAFRA.
Filing of administrative claims. Section 983(a)(2) of title 18 of
the United States Code modifies the procedure for filing a claim to
seized property. The Customs laws procedure applicable to claims in
Department of Justice forfeitures provides that, to contest an
administrative forfeiture, a claimant has 20 days after the first
published notice of seizure to file with the seizing agency both a
claim and a cost bond for $5,000 or 10 percent of the property's value,
whichever is less, but not less than $250. See 19 U.S.C. 1608. Section
983(a)(2) eliminates the cost bond requirement for forfeitures covered
by CAFRA and allows the filing of claims not later than the deadline
set forth in a personal notice letter. The deadline must be at least 35
days after the date the letter was mailed. Persons not receiving a
notice letter must file a claim within 30 days after the date of final
publication of notice of seizure. Section 983(a)(2) also adds
provisions specifying the information required for a valid claim. It
reflects the amendments to 18 U.S.C. 983(a)(2)(C)(ii) in the Paul
Coverdell National Forensic Sciences Improvement Act of 2000, Public
Law 106-561, 114 Stat. 2787, which retroactively deleted CAFRA's
original requirements that claimants provide with their claims
documentary evidence supporting their interest in the seized property
and state that their claims are not frivolous. Consequently, pursuant
to section 21 of CAFRA (establishing CAFRA's effective date), the
amended section 983(a)(2)(C)(ii) applies to any forfeiture proceeding
commenced on or after August 23, 2000. Section 8.10 of the proposed
rule incorporates these section 983(a)(2) changes to the claim
procedures.
Release of seized property if forfeiture is not commenced. Section
8.13 of the proposed rule provides procedures to implement 18 U.S.C.
983(a)(3). Section 983(a)(3) requires the release of seized property
pursuant to regulations promulgated by the Attorney General and
prohibits the United States from pursuing further action for civil
forfeiture if the United States does not institute judicial forfeiture
proceedings against the property within 90 days after an administrative
claim has been filed and no extension of time has been obtained from a
court.
Hardship request. Section 8.15 of the proposed rule implements 18
U.S.C. 983(f), which provides procedures and criteria for the release
of seized property (subject to certain exceptions) pending the
completion of judicial forfeiture proceedings when a claimant's request
for such release establishes that continued government custody will
cause substantial hardship that outweighs the risk that the property
will not remain available for forfeiture.
Expedited release of property. Subpart B, Sec. Sec. 8.17 through
8.22 of the proposed rule, incorporates and amends, to the extent
required by CAFRA, the pre-existing regulations for expedited
forfeiture proceedings for certain property. These regulations, 21 CFR
part 1316, subpart F, provided expedited procedures for conveyances
seized for drug-related offenses and property seized for violations
involving personal use quantities of a controlled substance. By
repealing 21 U.S.C. 888 (expedited procedures for seized conveyances),
CAFRA eliminated the statutory basis for the expedited procedure
regulations pertaining to drug-related conveyance seizures.
Accordingly, Sec. Sec. 8.17 through
[[Page 26662]]
8.22 of the proposed rule omit the 21 CFR part 1316, subpart F
provisions applicable to drug-related conveyance seizures. The
remaining provisions apply only where property is seized for
administrative forfeiture involving controlled substances in personal
use quantities.
Remissions and mitigations. For consistency with CAFRA's uniform
innocent owner defense, 18 U.S.C. 983(d), the proposed rule
incorporates the innocent owner provisions of sections 983(d)(2)(A) and
983(d)(3)(A) in a new 28 CFR 9.5(a)(l).
Forfeitures affected by CAFRA and the proposed rule. CAFRA's
changes apply to civil forfeiture proceedings commenced on or after
August 23, 2000, with the exception of civil forfeitures under the
following: The Tariff Act of 1930 or any other provision of law
codified in title 19; the Internal Revenue Code of 1986; the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.); the Trading with
the Enemy Act (50 U.S.C. App. 1 et seq.) or the International Emergency
Economic Powers Act (50 U.S.C. 1701 et seq.); or section 1 of title VI
of the Act of June 15, 1917 (22 U.S.C. 401). These regulations apply to
all forfeitures administered by the Department of Justice with the
exception of seizures and forfeitures under the statutes listed in 18
U.S.C. 983(i). The authority of seizing agencies to conduct
administrative forfeitures derives from the procedural provisions of
the Customs laws where those provisions are incorporated by reference
in the substantive forfeiture statutes enforced by the agencies.
C. Changes to the Previous Regulations Governing the Seizure and
Forfeiture of Property by ATF, DEA, and FBI
Pre-forfeiture disposition. The provision providing for the pre-
forfeiture disposition of seized property, Sec. 8.14, is needed to
implement the authority of 19 U.S.C. 1612(b), which is one of the
procedural Customs statutes incorporated by reference into the
forfeiture statutes enforced by the Department of Justice. Section
1612(b) authorizes pre-forfeiture disposal of seized property, pursuant
to regulations, when the property is liable to perish or to waste or to
be greatly reduced in value by keeping, or when the costs of
maintaining the property pending forfeiture are disproportionate to the
property's value. The proposed rule enables the Department of Justice
to use the authority of section 1612(b) in appropriate cases.
Internet publication. The proposed rule updates the forfeiture
regulations by adding, in Sec. 8.9(a)(1)(ii), a provision for the
publication of administrative forfeiture notices on an official
government Internet site instead of in newspapers. The statute
governing the publication of notice in administrative forfeiture
proceedings, 19 U.S.C. 1607, does not require a specific means of
publication. Section 8.9(a)(1)(ii) will provide ATF, DEA, and FBI with
the choice to use the Internet as a more effective and less costly
alternative to the newspaper publication provided for in Sec.
8.9(a)(1)(i). This grant of authority parallels a similar grant of
authority in Rule G(4)(a)(iv)(C) of the Supplemental Rules for
Admiralty or Maritime Claims and Asset Forfeiture Actions.
Pursuant to Rule G(4)(a)(iv)(C), in all civil judicial forfeitures,
the Government may now employ the option of giving public notice
through the Internet rather than in a newspaper. Section 8.9(a)(1)(ii)
will permit the Department of Justice agencies to likewise use the
Internet to provide notice in administrative forfeitures, a cost
savings that is particularly important as the volume of administrative
forfeitures is much greater than judicial forfeitures. There is strong
statistical proof that Internet access is now available to the vast
majority of United States residents. Internet access continues to grow,
while newspaper circulation is declining, and in some markets, the
option to publish in a traditional newspaper may not be available in
the next few years.
D. Regulations at 28 CFR Part 9 Governing the Remission or Mitigation
of Forfeitures
This proposed rule includes modifications to the regulations
governing the remission or mitigation of forfeiture at 28 CFR part 9.
Sections 9.3(e)(2) is revised by deleting references to DEA's ``Office
of Chief Counsel'' and referring instead to DEA's ``Forfeiture
Counsel'' as the pertinent official in DEA forfeiture cases, by
deleting references to ATF's ``Special Agent in Charge, Asset
Forfeiture and Seized Property Branch,'' and referring instead to ATF's
``Office of Chief Counsel, Forfeiture Counsel,'' as the pertinent
official in ATF forfeiture cases, and by updating the addresses for
both DEA and ATF. Section 9.1 changes the designation of the official
within ATF to whom authority to grant remission and mitigation has been
delegated.
Second, the definition of ``victim'' in Sec. 9.2 is modified to
make remission available to qualified third parties who reimburse a
victim pursuant to an indemnification agreement. In addition, Sec. 9.8
is modified to specify the procedures applicable to persons seeking
remission as victims.
E. Summary of the Impact of the Proposed Changes on the Public
CAFRA enacted additional due process protections for property
owners in Federal civil forfeiture proceedings. Section 2(a) of CAFRA,
codified at 18 U.S.C. 983, requires prompt notification of
administrative forfeiture proceedings. As a general rule, in any
administrative forfeiture proceeding under a civil forfeiture statute,
the Government must send written notice of the seizure and the
Government's intent to forfeit the property to all persons known to the
Government who might have an interest in the property within 60 days of
a seizure (or 90 days of a seizure made by state or local law
enforcement authorities and transferred for Federal forfeiture).
CAFRA also changed the procedure for filing administrative claims.
Section 983(a)(2)(B) dictates that when the agency both publishes and
sends notice of the seizure and its intent to forfeit the property, an
owner who receives notice by mail has 35 days from the date of mailing,
and if the personal notice is sent but not received, an owner has 30
days from the date of final publication of notice of the seizure, to
file a claim with the agency. In addition, the notice provision in
Sec. 8.9(a)(1)(ii) was updated to allow the agencies to publish
administrative forfeiture notices on the Internet instead of in
newspapers, consistent with the procedure for civil judicial
forfeitures under Rule G(4)(a)(iv)(C).
The filing of a valid claim compels the agency to refer the matter
to the U.S. Attorney. To preserve the option to seek civil judicial
forfeiture, the U.S. Attorney must do one of the following within 90
days: (1) Commence a civil judicial forfeiture action against the
seized property; (2) obtain an indictment alleging the property is
subject to criminal forfeiture; (3) obtain a good cause extension of
the deadline from the district court; or (4) return the property
pending the filing of a complaint. If the Government fails to take any
of these steps within the statutory deadline, it must promptly release
the property and is barred from taking any further action to civilly
forfeit the property in connection with the underlying offense.
Prior to CAFRA, claims in an administrative forfeiture required an
accompanying bond of either $5,000 or 10 percent of the value of the
seized property, whichever was lower. Section 983(a)(2) eliminated the
bond
[[Page 26663]]
requirement, in forfeitures covered by CAFRA, to give the property
owner greater access to Federal court. However, to prevent frivolous
claims, CAFRA requires the claimant to state the basis for his or her
interest in the property in the claim under oath.
Under CAFRA, claimants also have a right to petition for immediate
release of seized property on grounds of hardship with a 30-day
deadline on judicial resolution of such petitions. Section 983(f)(7)
provides that if the court grants a petition, it may also enter any
order necessary to ensure that the value of the property is maintained
during the pendency of the forfeiture action, including permitting
inspection, photographing, and inventory of the property, fixing a bond
pursuant to Rule E(5) of the Supplemental Rules for Certain Admiralty
or Maritime Claims, or requiring the claimant to obtain or maintain
insurance on the property. It also provides that the Government may
place a lien or file a lis pendens on the property.
It is important to note that CAFRA's deadlines apply only to civil
forfeiture actions initiated by commencement of an administrative
proceeding under section 983(a) and do not apply to actions commenced
solely as civil judicial forfeitures. However, the vast majority of
civil forfeitures are handled administratively.
CAFRA changed the procedures for the expedited release of
conveyances and property seized for drug offenses to apply only where
property is seized for administrative forfeiture involving personal use
quantities of a controlled substance.
Although CAFRA enacted a provision granting attorney fees to
substantially prevailing parties in civil judicial forfeitures, the
regulations make it clear that the United States is not liable for
attorney fees or costs in administrative forfeiture proceedings, even
if the matter is referred to the U.S. Attorney and the U.S. Attorney
declines to initiate a judicial forfeiture on the property.
In addition to implementing these CAFRA reforms, the new
regulations allow the agencies to sell property that is deteriorating
rapidly in order to preserve the property's value pending resolution of
the forfeiture. This disposition must be authorized by agency
headquarters. The regulations also specify that the seizing agency must
promptly deposit any seized U.S. currency over $5,000 into the Seized
Asset Deposit Fund pending forfeiture. The only exception is for
currency that must be retained because it has a significant,
independent, tangible evidentiary purpose.
The new rule also changes some of the procedures relating to crime
victims in 28 CFR part 9. The definition of victim is modified to make
remission available to qualified third parties who reimburse a victim
pursuant to an insurance or other indemnification agreement. See
proposed Sec. 9.2(w). In addition, Sec. 9.8 is reorganized and a new
paragraph (a) is added to specify the filing procedures applicable to
persons seeking remission as victims. This revision is necessary
because the current petition filing procedures in Sec. 9.4 are
applicable to owners and lienholders, but not to victims. Section
9.8(i) clarifies that the amount of compensation available to a
particular victim may not exceed the victim's share of the net proceeds
of the forfeiture associated with the activity that caused the victim's
loss. In other words, a victim is not entitled to full compensation,
but only the amount of compensation available from the forfeited
property. In addition, the new rule makes the statutory innocent owner
provisions at 18 U.S.C. 983(d)(2)(A) and (d)(3)(A) applicable to all
owner and lienholder petitions for remission.
Regulatory Certifications
Executive Order 12866--Regulatory Planning and Review
This regulation has been drafted and reviewed in accordance with
Executive Order 12866, section 1(b), Principles of Regulation. The
Department of Justice has determined that this rule is a ``significant
regulatory action'' under Executive Order 12866, section 3(f), and
accordingly this rule has been reviewed by the Office of Management and
Budget (OMB). The costs that this rule imposes (such as additional
personnel and higher administrative overhead) fall upon the Justice
Department, not upon the general public. The benefits of this rule,
however, are numerous. The rule increases the efficiency of
forfeitures, ensures that the agencies provide prompt due process and
notice, helps maintain property values, ensures that property is
promptly returned to third parties if appropriate, eliminates the cost
bond and its administrative burden, and requires more effective
processing and handling of currency. Publishing administrative
forfeiture notices on the Internet accomplishes a substantial financial
benefit for the agencies.
Executive Order 12630--Governmental Actions and Interference With
Constitutionally Protected Property Rights
Executive Order 12630, section 2(a)(3) specifically exempts from
the definition of ``policies that have takings implications'' the
seizure and forfeiture of property for violations of law. Therefore, no
actions were deemed necessary under the provisions of Executive Order
12630.
Executive Order 12988--Civil Justice Reform
This rule meets the applicable standards set forth in sections 3(a)
and 3(b)(2) of Executive Order 12988.
Executive Order 13132--Federalism
This rule will not have substantial direct effects on the States,
on the relationship between the Federal Government and the States, or
on distribution of power and responsibilities among the various levels
of government. Therefore, in accordance with Executive Order 13132, it
is determined that this rule does not have sufficient federalism
implications to warrant the preparation of a Federalism Assessment.
Regulatory Flexibility Act
The Attorney General, in accordance with the Regulatory Flexibility
Act (5 U.S.C. 605(b)), has reviewed this regulation, and by approving
it certifies that it will not have a significant economic impact on a
substantial number of small entities. Some owners of property subject
to administrative or judicial forfeiture under laws enforced by ATF,
DEA, FBI, and the Department's Criminal Division may be small
businesses as defined under the Regulatory Flexibility Act, and under
size standards established by the Small Business Administration.
Although the regulations affect every administrative forfeiture
initiated by ATF, DEA, and FBI, and every remission or mitigation
decision by the agencies or the Department's Criminal Division, the
rule will not change existing forfeiture laws. It will only revise and
consolidate the seizure and forfeiture regulations of ATF, DEA, FBI,
and the Criminal Division to conform to CAFRA, and to fill gaps and
address ambiguities in CAFRA and other seizure and forfeiture laws.
Accordingly, an initial regulatory flexibility analysis is not
required.
Small Business Regulatory Enforcement Fairness Act of 1996
This rule is not a major rule as defined by section 251 of the
Small Business Regulatory Enforcement
[[Page 26664]]
Fairness Act of 1996, 5 U.S.C. 804. This rule will not result in an
annual effect on the economy of $100,000,000 or more, a major increase
in costs or prices, or significant adverse effects on competition,
employment, investment, productivity, innovation, or the ability of
United States-based companies to compete with foreign-based companies
in domestic and export markets.
Unfunded Mandates Reform Act of 1995
This rule will not result in the expenditure by state, local and
Tribal governments, in the aggregate, or by the private sector, of
$100,000,000 or more in any one year, and it will not significantly or
uniquely affect small governments. Therefore, no actions were deemed
necessary under the provisions of the Unfunded Mandates Reform Act of
1995.
Paperwork Reduction Act of 1995
This proposed rule does not contain any information collection
requirements that require approval by OMB under the Paperwork Reduction
Act, 44 U.S.C. 3501 et seq.
The proposed rule is exempt from the Paperwork Reduction Act (PRA)
of 1995, Public Law 104-13, 109 Stat. 163, because it does not require
a form within the meaning of the Act and because it falls within the
exceptions listed in 44 U.S.C. 3518 and 5 CFR Sec. 1320.4. The
proposed rule updates the existing regulations to comply with CAFRA.
CAFRA included key reforms regarding the rights of property owners in
Federal forfeiture. Thus, the purpose of the proposed rule is not to
gather information about the claimants or petitioners, but rather to
give them an opportunity, as provided by CAFRA, to prove their claim in
the forfeiture proceeding.
Under 44 U.S.C. 3502(3)(A), a form falls within the PRA if it calls
for answers to identical questions posed to ten or more persons. The
proposed rule allows owners and victims to file the following claims,
petitions, or requests. None of the filings needs to be in a particular
form, but the regulations require the filer to provide certain
information, as outlined below.
(1) Claim: The claim must identify the specific property being
claimed, the claimant's identity and interest in the property, and must
be made under oath by the claimant. See Sec. 8.10.
(2) Petition for remission or mitigation of seized property: The
petitioner must include his or her identification information,
specifics about the seizure, a complete description of the property,
and a description of his or her ownership interest in the property. See
Sec. Sec. 9.3, 9.4.
(3) Petition for remission involving victims: The petitioner must
show a pecuniary loss arising from the offense underlying the
forfeiture, or a related offense. See Sec. 9.8(a).
(4) Petition for expedited release of seized property: The
petitioner must include a complete description of the property and the
seizure information, a statement of the petitioner's interest in the
property, and a statement of the circumstances justifying expedited
release. See Sec. 8.19.
(5) Request for hardship release: The request must establish, in
general, that the claimant has a legitimate interest in the property
and that it is not contraband or available for further illegal use. See
Sec. 8.15.
These statutory and regulatory requirements do not pose identical
questions; they provide the guidelines for what information is
necessary if an owner or victim chooses to pursue a petition, a claim,
or a hardship release.
Moreover, a forfeiture action would fall under one of the three
exceptions to the PRA listed in 44 U.S.C. 3518(c)(1), depending on the
type of forfeiture proceeding. After property is seized for forfeiture,
the Federal seizing agency may commence an administrative forfeiture
proceeding against the property by providing notice to the public and
any parties with a known ownership interest. An administrative
forfeiture would fall within the definition in section
3518(c)(1)(B)(ii) of an ``administrative action * * * involving an
agency against specific individuals or entities.'' If a claim is
properly filed in the administrative forfeiture, Federal prosecutors
must file a civil forfeiture complaint against the property or include
it in a criminal indictment within the deadlines laid out by CAFRA or
return the property.
A civil forfeiture would fall under the PRA exception of 44 U.S.C.
3518(c)(1)(B)(ii) because it is ``a civil action to which the United
States * * * is a party.'' Alternatively, if the prosecutors include
the property in a criminal indictment, the criminal forfeiture would
occur ``during the conduct of a Federal criminal investigation * * * or
during the disposition of a particular criminal matter'' and would fall
under the exception of section 3518(c)(1)(A).
Thus, a claim or petition filed in forfeiture proceedings under the
proposed rule is not a collection of information, as defined by the PRA
in 44 U.S.C. 3502(3)(A), and would fall within the exceptions of 44
U.S.C. 3518(c)(1).
List of Subjects
21 CFR Part 1316
Administrative practice and procedure, Authority delegations
(Government agencies), Drug traffic control, Research, Seizures and
forfeitures.
28 CFR Part 8
Administrative practice and procedure, Arms and munitions,
communications equipment, copyright, Crime, Gambling, Infants and
children, Motor vehicles, Prices, Seizures and forfeitures, Wiretapping
and electronic surveillance.
28 CFR Part 9
Administrative practice and procedure, Crime, Seizures and
forfeitures.
Accordingly, under the authority of 5 U.S.C. 301 and 28 U.S.C. 509-
510, and for the reasons set forth in the preamble, Chapter II of Title
21 and Chapter I of Title 28 of the Code of Federal Regulations are
proposed to be amended as follows:
TITLE 21--FOOD AND DRUGS
PART 1316--ADMINISTRATIVE FUNCTIONS, PRACTICES, AND PROCEDURES
Subparts E and F [Removed]
1. Remove subparts E and F.
TITLE 28--JUDICIAL ADMINISTRATION
2. Revise part 8 to read as follow:
PART 8--FORFEITURE AUTHORITY FOR CERTAIN STATUTES
Subpart A--Seizure and Forfeiture of Property
Sec.
8.1 Scope of regulations.
8.2 Definitions.
8.3 Seizing property subject to forfeiture.
8.4 Inventory.
8.5 Custody.
8.6 Appraisal.
8.7 Release before claim.
8.8 Commencing the administrative forfeiture proceeding.
8.9 Notice of administrative forfeiture.
8.10 Claims.
8.11 Interplay of administrative and criminal judicial forfeiture
proceedings.
8.12 Declaration of administrative forfeiture.
8.13 Return of property.
8.14 Disposition of property before forfeiture.
8.15 Requests for hardship release of seized property.
8.16 Attorney fees and costs.
[[Page 26665]]
Subpart B--Expedited Forfeiture Proceedings for Property Seizures Based
on Violations Involving the Possession of Personal Use Quantities of a
Controlled Substance
8.17 Purpose and scope.
8.18 Definitions.
8.19 Petition for expedited release in an administrative forfeiture
proceeding.
8.20 Ruling on petition for expedited release in an administrative
forfeiture.
8.21 Posting of substitute monetary amount in an administrative
forfeiture proceeding.
8.22 Special notice provision.
Subpart C--Other Applicable Provisions
8.23 Re-delegation of authority.
Authority: 5 U.S.C. 301; 8 U.S.C. 1103, 1324(b); 18 U.S.C. 981,
983, 3051; 19 U.S.C. 1606, 1607, 1608, 1610, 1612(b), 1613, 1618; 21
U.S.C. 822, 871, 872, 880, 881, 883, 958, 965; 28 U.S.C. 509, 510;
Pub. L. 100-690, sec. 6079.
Subpart A--Seizure and Forfeiture of Property
Sec. 8.1 Scope of regulations.
(a) This part applies to all forfeitures administered by the
Department of Justice with the exception of seizures and forfeitures
under the statutes listed in 18 U.S.C. 983(i). The authority of seizing
agencies to conduct administrative forfeitures derives from the
procedural provisions of the Customs laws (19 U.S.C. 1602-1618) where
those provisions are incorporated by reference in the substantive
forfeiture statutes enforced by the agencies.
(b) The regulations will apply to all forfeiture actions commenced
on or after [EFFECTIVE DATE OF FINAL RULE].
Sec. 8.2 Definitions.
As used in this part, the following terms shall have the meanings
specified:
Administrative forfeiture means the process by which property may
be forfeited by a seizing agency rather than through a judicial
proceeding. Administrative forfeiture has the same meaning as
nonjudicial forfeiture, as that term is used in 18 U.S.C. 983.
Appraised value means the estimated market value of property at the
time and place of seizure if such or similar property was freely
offered for sale by a willing seller to a willing buyer.
Appropriate official means, in the case of the Drug Enforcement
Administration (DEA), the Forfeiture Counsel, DEA. In the case of the
Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), it means
the Associate Chief Counsel, Office of Chief Counsel, ATF. In the case
of the Federal Bureau of Investigation (FBI), it means the Unit Chief,
Legal Forfeiture Unit, Office of the General Counsel, FBI, except as
used in Sec. Sec. 8.9(a)(2), 8.9(b)(2), 8.10, and 8.15 of this part,
where the term appropriate official means the office or official
identified in the notice published or personal written notice in
accordance with Sec. 8.9.
Contraband means--
(1) any controlled substance, hazardous raw material, equipment or
container, plants, or other property subject to summary forfeiture
pursuant to sections 511(f) or (g) of the Controlled Substances Act (21
U.S.C. 881(f) or (g)); or
(2) any controlled substance imported into the United States, or
exported out of the United States, in violation of law.
Civil forfeiture proceeding means a civil judicial forfeiture
action as that term is used in 18 U.S.C. 983.
Domestic value means the same as the term appraised value as
defined in Sec. 8.2(b) of this part.
Expense means all costs incurred to detain, inventory, safeguard,
maintain, advertise, sell, or dispose of property seized, detained, or
forfeited pursuant to any law.
File or filed has the following meanings:
(1) A claim or any other document submitted in an administrative
forfeiture proceeding is not deemed filed until actually received by
the appropriate official identified in the personal written notice and
the published notice specified in Sec. 8.9. It is not considered filed
if it is received by any other office or official, such as a court,
U.S. Attorney, seizing agent, local ATF or DEA office, or FBI
Headquarters. In addition, a claim in an administrative forfeiture
proceeding is not considered filed if received only by an electronic or
facsimile transmission.
(2) For purposes of computing the start of the 90-day period set
forth in 18 U.S.C. 983(a)(3), an administrative forfeiture claim is
filed on the date when the claim is received by the designated
appropriate official, even if the claim is received from an
incarcerated pro se prisoner.
Interested party means any person who reasonably appears to have an
interest in the property based on the facts known to the seizing agency
before a declaration of forfeiture is entered.
Mail includes regular or certified U.S. mail and mail and package
transportation and delivery services provided by other private or
commercial interstate carriers.
Nonjudicial forfeiture has the same meaning as administrative
forfeiture as defined in Sec. 8.2(a).
Person means an individual, partnership, corporation, joint
business enterprise, estate, or other legal entity capable of owning
property.
Property subject to administrative forfeiture means any personal
property of the kinds described in 19 U.S.C. 1607(a)(1)-(4).
Property subject to forfeiture refers to all property that Federal
law authorizes to be forfeited to the United States of America in any
administrative forfeiture proceeding, in any civil judicial forfeiture
proceeding, or in any criminal forfeiture proceeding.
Seizing agency refers to ATF, DEA, or FBI.
Sec. 8.3 Seizing property subject to forfeiture.
(a) Authority of seizing agents. All special agents of any seizing
agency may seize assets under any Federal statute over which the agency
has investigative and/or forfeiture jurisdiction.
(b) Turnover of assets seized by state and local agencies. (1)
Property that is seized by a state or local law enforcement agency and
transferred to a seizing agency for administrative or civil forfeiture
may be adopted for administrative forfeiture without the issuance of
any Federal seizure warrant or other Federal judicial process.
(2) Where a state or local law enforcement agency maintains custody
of property pursuant to process issued by a state or local judicial
authority, and notifies a seizing agency of the impending release of
such property, the seizing agency may seek and obtain a Federal seizure
warrant in anticipation of a state or local judicial authority
releasing the asset from state process for purposes of Federal seizure,
and may execute such seizure warrant when the state or local law
enforcement agency releases the property as allowed or directed by its
judicial authority.
Sec. 8.4 Inventory.
The seizing agent shall prepare an inventory of any seized
property.
Sec. 8.5 Custody.
(a) All property seized for forfeiture by ATF, DEA, or FBI shall be
delivered to the custody of the U.S. Marshals Service (USMS), or a
custodian approved by the USMS, as soon as practicable after seizure,
unless it is retained as evidence by the seizing agency.
(b) Seized U.S. currency (and, to the extent practicable, seized
foreign currency and negotiable instruments) must be deposited promptly
in the Seized Asset Deposit Fund pending forfeiture. Provisional
exceptions to this requirement may be granted as follows:
(1) If the seized currency has a value less than $5,000 and a
supervisory
[[Page 26666]]
official within a U.S. Attorney's Office determines in writing that the
currency is reasonably likely to serve a significant, independent,
tangible evidentiary purpose, or that retention is necessary while the
potential evidentiary significance of the currency is being determined
by scientific testing or otherwise; or
(2) If the seized currency has a value greater than $5,000 and the
Chief of the Asset Forfeiture and Money Laundering Section (AFMLS),
Criminal Division, determines in writing that the currency is
reasonably likely to serve a significant, independent, tangible
evidentiary purpose, or that retention is necessary while the potential
evidentiary significance of the currency is being determined by
scientific testing or otherwise.
(c) Seized currency has a significant independent, tangible
evidentiary purpose as those terms are used in Sec. Sec. 8.5(b)(1) and
(2) of this part if, for example, it bears fingerprint evidence, is
packaged in an incriminating fashion, or contains a traceable amount of
narcotic residue or some other substance of evidentiary significance.
If only a portion of the seized currency has evidentiary value, only
that portion should be retained; the balance should be deposited.
Sec. 8.6 Appraisal.
The seizing agency or its designee shall determine the domestic
value of seized property as soon as practicable following seizure.
Sec. 8.7 Release before claim.
(a) After seizure for forfeiture and prior to the filing of any
claim, ATF's Chief, Asset Forfeiture and Seized Property Branch, or
designee, the appropriate DEA Special Agent in Charge, or designee, or
the appropriate FBI Special Agent in Charge, or designee, whichever is
applicable, is authorized to release property seized for forfeiture,
provided:
(1) The property is not contraband, evidence of a violation of law,
or any property, the possession of which by the claimant, petitioner,
or the person from whom it was seized is prohibited by state or Federal
law, and does not have a design or other characteristic that
particularly suits it for use in illegal activities; and
(2) The official designated in paragraph (a) of this section
determines within 10 days of seizure that there is an innocent party
with the right to immediate possession of the property or that the
release would be in the best interest of justice or the Government.
(b) Further, at any time after seizure and before any claim is
referred, such seized property may be released if the appropriate
official of the seizing agency determines that there is an innocent
party with the right to immediate possession of the property or that
the release would be in the best interest of justice or the Government.
Sec. 8.8 Commencing the administrative forfeiture proceeding.
An administrative forfeiture proceeding begins when notice is first
published in accordance with Sec. 8.9(a) of this part, or the first
personal written notice is sent in accordance with Sec. 8.9(b) of this
part, whichever occurs first.
Sec. 8.9 Notice of administrative forfeiture.
(a) Notice by publication. (1) After seizing property subject to
administrative forfeiture, the appropriate official of the seizing
agency shall select from the following options a means of publication
reasonably calculated to notify potential claimants of the seizure and
intent to forfeit and sell or otherwise dispose of the property:
(i) Publication once each week for at least three successive weeks
in a newspaper generally circulated in the judicial district where the
property was seized; or
(ii) Posting a notice on an official government Internet site for
at least 30 consecutive days.
(2) The published notice shall:
(i) Describe the seized property;
(ii) State the date, statutory basis, and place of seizure;
(iii) State the deadline for filing a claim when personal written
notice has not been received, at least 30 days after the date of final
publication of the notice of seizure; and
(iv) State the identity of the appropriate official of the seizing
agency and address where the claim must be filed.
(b) Personal written notice. (1) Manner of providing notice. After
seizing property subject to administrative forfeiture, the seizing
agency, in addition to publishing notice, shall send personal written
notice of the seizure to each interested party in a manner reasonably
calculated to reach such parties.
(2) Content of personal written notice. The personal written notice
sent by the seizing agency shall:
(i) State the date when the personal written notice is sent;
(ii) State the deadline for filing a claim, at least 35 days after
the personal written notice is sent;
(iii) State the date, statutory basis, and place of seizure;
(iv) State the identity of the appropriate official of the seizing
agency and the address where the claim must be filed; and
(v) Describe the seized property.
(c) Timing of notice. (1) Date of personal notice. Personal written
notice is sent on the date when the seizing agency causes it to be
placed in the mail, delivered to a commercial carrier, or otherwise
sent by means reasonably calculated to reach the interested party. The
personal written notice required by Sec. 8.9(b) of this part shall be
sent as soon as practicable, and in no case more than 60 days after the
date of seizure (or 90 days after the date of seizure by a state or
local law enforcement agency if the property was turned over to a
Federal law enforcement agency for the purpose of forfeiture under
Federal law).
(2) Civil judicial forfeiture. If, before the time period for
sending notice expires, the Government files a civil judicial
forfeiture action against the seized property and provides notice of
such action as required by law, personal notice of administrative
forfeiture is not required under paragraph (c)(1) of this section.
(3) Criminal indictment. If, before the time period for sending
notice under paragraph (c)(1) of this section expires, no civil
judicial forfeiture action is filed, but a criminal indictment or
information is obtained containing an allegation that the property is
subject to forfeiture, the seizing agency shall either:
(i) Send timely personal written notice and continue the
administrative forfeiture proceeding; or
(ii) After consulting with the U.S. Attorney, terminate the
administrative forfeiture proceeding and notify the custodian to return
the property to the person having the right to immediate possession
unless the U.S. Attorney takes the steps necessary to maintain custody
of the property as provided in the applicable criminal forfeiture
statute.
(4) Subsequent Federal seizure. If property is seized by a state or
local law enforcement agency, but personal written notice is not sent
to the person from whom the property is seized within the time period
for providing notice under paragraph (c)(1) of this section, then any
administrative forfeiture proceeding against the property may commence
if:
(i) The property is subsequently seized or restrained by the
seizing agency pursuant to a Federal seizure warrant or restraining
order and the seizing agency sends notice as soon as
[[Page 26667]]
practicable, and in no case more than 60 days after the date of the
Federal seizure; or
(ii) The owner of the property consents to forfeiture of the
property.
(5) Tolling. (i) In states or localities where orders are obtained
from a state court authorizing the turnover of seized assets to a
Federal seizing agency, the period from the date an application or
motion is presented to the state court for the turnover order through
the date when such order is issued by the court shall not be included
in the time period for providing notice under paragraph (c)(1) of this
section.
(ii) If property is detained at an international border or port of
entry for the purpose of examination, testing, inspection, obtaining
documentation, or other investigation relating to the importation of
the property into, or the exportation of the property from, the United
States, such period of detention shall not be included in the period
described in paragraph (c)(1) of this section. In such cases, the 60-
day period shall begin to run when the period of detention ends, if a
seizing agency seizes the property for the purpose of forfeiture to the
United States.
(6) Identity of interested party. If a seizing agency determines
the identity or interest of an interested party after the seizure or
adoption of the property, but before entering a declaration of
forfeiture, the agency shall send written notice to such interested
party under paragraph (c)(1) of this section not later than 60 days
after determining the identity of the interested party or the
interested party's interest.
(7) Extending deadline for notice. The appropriate official of the
seizing agency may extend the period for sending personal written
notice under these regulations in a particular case for a period not to
exceed 30 days (which period may not be further extended except by a
court pursuant to 18 U.S.C. 983(a)(1)(C) and (D)), if the appropriate
official determines, and states in writing, that there is reason to
believe that notice may have an adverse result, including: endangering
the life or physical safety of an individual; flight from prosecution;
destruction of or tampering with evidence; intimidation of potential
witnesses; or otherwise seriously jeopardizing an investigation or
unduly delaying a trial.
(8) Certification. The appropriate official of the seizing agency
shall provide the written certification required under 18 U.S.C.
983(a)(1)(C) when the Government requests it and the conditions
described in section 983(a)(1)(D) are present.
Sec. 8.10 Claims.
(a) Filing. In order to contest the forfeiture of seized property
in Federal court, any person asserting an interest in seized property
subject to an administrative forfeiture proceeding under these
regulations must file a claim with the appropriate official, after the
commencement of the administrative forfeiture proceeding as defined in
Sec. 8.8 of this part, and not later than the deadline set forth in a
personal notice letter sent pursuant to Sec. 8.9(b) of this part. If
personal written notice is sent but not received, then the intended
recipient must file a claim with the appropriate official not later
than 30 days after the date of the final publication of the notice of
seizure.
(b) Contents of claim. A claim shall:
(1) Identify the specific property being claimed;
(2) Identify the claimant and state the claimant's interest in the
property; and
(3) Be made under oath by the claimant, not counsel for the
claimant, and recite that it is made under penalty of perjury,
consistent with the requirements of 28 U.S.C. 1746. An acknowledgment,
attestation, or certification by a notary public alone is insufficient.
(c) Availability of claim forms. The claim need not be made in any
particular form. However, each seizing agency conducting forfeitures
under these regulations must make claim forms generally available on
request. Such forms shall be written in easily understandable language.
A request for a claim form does not extend the deadline for filing a
claim. Any person may obtain a claim form by requesting one in writing
from the appropriate official.
(d) Cost bond not required. Any person may file a claim under Sec.
8.10(a) of this part without posting bond, except in forfeitures under
statutes listed in 18 U.S.C. 983(i).
(e) Referral of claim. Upon receipt of a claim that meets the
requirements of Sec. 8.10(a) and (b) of this part, the seizing agency
shall return the property or shall suspend the administrative
forfeiture proceeding and promptly transmit the claim, together with a
description of the property and a complete statement of the facts and
circumstances surrounding the seizure, to the appropriate U.S. Attorney
for commencement of judicial forfeiture proceeding. Upon making the
determination that the seized property will be released, the agency
shall promptly notify the person with a right to immediate possession
of the property, informing that person to contact the property
custodian within a specified period for release of the property, and
further informing that person that failure to contact the property
custodian within the specified period for release of the property will
result in abandonment of the property pursuant to applicable
regulations. The seizing agency shall notify the property custodian of
the identity of the person to whom the property should be released. The
property custodian shall have the right to require presentation of
proper identification or to take other steps to verify the identity of
the person who seeks the release of property, or both.
(f) Premature filing. If a claim is filed with the appropriate
official after the seizure of property, but before the commencement of
the administrative forfeiture proceeding as defined in Sec. 8.8 of
this part, the claim shall be deemed filed on the 30th day after the
commencement of the administrative forfeiture proceeding. If such claim
meets the requirements of Sec. 8.10(b) of this part, the seizing
agency shall suspend the administrative forfeiture proceedings and
promptly transmit the claim, together with a description of the
property and a complete statement of the facts and circumstances
surrounding the seizure to the appropriate U.S. Attorney for
commencement of judicial forfeiture proceedings.
(g) Defective claims. If the seizing agency determines that an
otherwise timely claim does not meet the requirements of Sec. 8.10(b)
of this part, the seizing agency may notify the claimant of this
determination and allow the claimant a reasonable time to cure the
defect(s) in the claim. If, within the time allowed by the seizing
agency, the requirements of Sec. 8.10(b) of this part are not met, the
claim shall be void and the forfeiture proceedings shall proceed as if
no claim had been submitted. If the claimant timely cures the
deficiency, then the claim shall be deemed filed on the date when the
appropriate official receives the cured claim.
Sec. 8.11 Interplay of administrative and criminal judicial
forfeiture proceedings.
An administrative forfeiture proceeding pending against seized or
restrained property does not bar the Government from alleging that the
same property is forfeitable in a criminal case. Notwithstanding the
fact that an allegation of forfeiture has been included in a criminal
indictment or information, the property may be administratively
forfeited in a parallel proceeding.
Sec. 8.12 Declaration of administrative forfeiture.
If the seizing agency commences a timely proceeding against
property
[[Page 26668]]
subject to administrative forfeiture, and no valid and timely claim is
filed, the appropriate official of the seizing agency shall declare the
property forfeited. The declaration of forfeiture shall have the same
force and effect as a final decree and order of forfeiture in a Federal
judicial forfeiture proceeding.
Sec. 8.13 Return of property.
(a) If, under 18 U.S.C. 983(a)(3), the United States is required to
return seized property, the U.S. Attorney in charge of the matter shall
immediately notify the appropriate seizing agency that the 90-day
deadline was not met. Under this subsection, the United States is not
required to return property for which it has an independent basis for
continued custody, including but not limited to contraband or evidence
of a violation of law.
(b) Upon becoming aware that the seized property must be released,
the agency shall promptly notify the person with a right to immediate
possession of the property, informing that person to contact the
property custodian within a specified period for release of the
property, and further informing that person that failure to contact the
property custodian within the specified period for release of the
property may result in initiation of abandonment proceedings against
the property pursuant to 41 CFR part 128-48. The seizing agency shall
notify the property custodian of the identity of the person to whom the
property should be released.
(c) The property custodian shall have the right to require
presentation of proper identification and to verify the identity of the
person who seeks the release of property.
Sec. 8.14 Disposition of property before forfeiture.
(a) Whenever it appears to the seizing agency that any seized
property is liable to perish or to waste, or to be greatly reduced in
value during its detention for forfeiture, or that the expense of
keeping the property is or will be disproportionate to its value, the
appropriate official of the seizing agency may order destruction, sale,
or other disposition of such property prior to forfeiture. In addition,
the owner may obtain release of the property by posting a substitute
monetary amount with the seizing agency to be held subject to
forfeiture proceedings in place of the seized property to be released.
Upon approval by the appropriate official of the seizing agency, the
property will be released to the owner after the payment of an amount
equal to the government appraised value of the property if the property
is not evidence of a violation of law, is not contraband, and has no
design or other characteristics that particularly suit it for use in
illegal activities. This payment must be in the form of a money order,
an official bank check, or a cashier's check made payable to the United
States Marshals Service. A bond in the form of a cashier's check or
official bank check will be considered as paid once the check has been
accepted for payment by the financial institution that issued the
check. If a substitute amount is posted and the property is
administratively forfeited, the seizing agency will forfeit the
substitute amount in lieu of the property. The pre-forfeiture
destruction, sale, or other disposition of seized property pursuant to
this section shall not extinguish any person's rights to the value of
the property under applicable law. The authority vested in the
appropriate official under this subsection may not be delegated.
(b) The seizing agency shall commence forfeiture proceedings,
regardless of the disposition of the property under Sec. 8.14(a) of
this part. A person with an interest in the property that was destroyed
or otherwise disposed of under Sec. 8.14(a) of this part may file a
claim to contest the forfeiture of the property or a petition for
remission or mitigation of the forfeiture. No government agent or
employee shall be liable for the destruction or other disposition of
property made pursuant to Sec. 8.14(a) of this part. The destruction
or other disposition of the property pursuant to this section does not
impair in rem jurisdiction.
Sec. 8.15 Requests for hardship release of seized property.
(a) Under certain circumstances a claimant may be entitled to
immediate release of seized property on the basis of hardship.
(b) Any person filing a request for hardship release must also file
a claim to the seized property pursuant to Sec. 8.10 of this part and
as defined in 18 U.S.C. 983(a).
(c) The timely filing of a valid claim pursuant to Sec. 8.10 of
this part does not entitle claimant to possession of the seized
property, but a claimant may request immediate release of the property
while the forfeiture is pending, based on hardship.
(d) A claimant seeking hardship release of property under 18 U.S.C.
983(f) and these regulations must file a written request with the
appropriate official. The request must establish that:
(1) The claimant has a possessory interest in the property;
(2) The claimant has sufficient ties to the community to provide
assurance that the property will be available at the time of trial;
(3) The continued possession by the Government pending the final
disposition of forfeiture proceedings will cause substantial hardship
to the claimant, such as preventing the functioning of a business,
preventing an individual from working, or leaving an individual
homeless;
(4) The claimant's likely hardship from the continued possession by
the Government of the seized property outweighs the risk that the
property will be destroyed, damaged, lost, concealed, or transferred if
it is returned to the claimant during the pendency of the proceeding;
and
(5) The seized property is not:
(i) Contraband, any property, the possession of which by the
claimant, petitioner, or the person from whom it was seized is
prohibited by state or Federal law, currency, or other monetary
instrument, or electronic funds unless such currency or other monetary
instrument or electronic funds constitutes the assets of a legitimate
business which has been seized;
(ii) Intended to be used as evidence of a violation of law;
(iii) By reason of design or other characteristic, particularly
suited for use in illegal activities; or
(iv) Likely to be used to commit additional criminal acts if
returned to the claimant.
(e) A hardship release request pursuant to this section shall be
deemed to have been made on the date when it is received by the
appropriate official as defined in Sec. 8.2(c) of this part or the
date the claim was deemed filed under Sec. 8.10(f) of this part. If
the request is ruled on and denied by the appropriate official or the
property has not been released within the 15-day time period, the
claimant may file a petition in Federal district court pursuant to 18
U.S.C. 983(f)(3). If a petition is filed in Federal district court, the
claimant must send a copy of the petition to the agency to which the
hardship petition was originally submitted and to the U.S. Attorney in
the judicial district in which the judicial petition was filed.
(f) If a civil forfeiture complaint is filed on the property and
the claimant files a claim with the court pursuant to 18 U.S.C.
983(a)(4)(A) and Rule G(5) of the Supplemental Rules for Certain
Admiralty and Maritime Claims, a hardship petition may be submitted to
the individual identified in the public or personal notice of the civil
judicial forfeiture action.
[[Page 26669]]
Sec. 8.16 Attorney fees and costs.
The United States is not liable for attorney fees or costs in any
administrative forfeiture proceeding, including such proceedings in
which a claim is filed, the matter is referred to the U.S. Attorney,
and the U.S. Attorney declines to commence judicial forfeiture
proceedings.
Subpart B--Expedited Forfeiture Proceedings for Property Seizures
Based on Violations Involving the Possession of Personal Use
Quantities of a Controlled Substance
Sec. 8.17 Purpose and scope.
(a) The following definitions, regulations, and criteria are
designed to establish and implement procedures required by section 6079
of the Anti-Drug Abuse Act of 1988, Public Law 100-690, 102 Stat. 4181.
They are intended to supplement existing law and procedures relative to
the forfeiture of property under the identified statutory authority.
These regulations do not affect the existing legal and equitable rights
and remedies of those with an interest in property seized for
forfeiture, nor do these provisions relieve interested parties from
their existing obligations and responsibilities in pursuing their
interests through such courses of action. These regulations are
intended to reflect the intent of Congress to minimize the adverse
impact on those entitled to legal or equitable relief occasioned by the
prolonged detention of property subject to forfeiture due to violations
of law involving personal use quantities of controlled substances. The
definition of personal use quantities of a controlled substance as
contained herein is intended to distinguish between those small
quantities that are generally considered to be possessed for personal
consumption and not for further distribution, and those larger
quantities generally considered to be intended for further
distribution.
(b) In this regard, for violations involving the possession of
personal use quantities of a controlled substance, section 6079(b)(2)
requires either that administrative forfeiture be completed within 21
days of the seizure of the property, or alternatively, that procedures
be established that provide a means by which an individual entitled to
relief may initiate an expedited administrative review of the legal and
factual basis of the seizure for forfeiture. Should an individual
request relief pursuant to these regulations and be entitled to the
return of the seized property, such property shall be returned
immediately following that determination, and in no event later than 20
days after the filing of a petition for expedited release by an owner,
and the administrative forfeiture process shall cease. Should the
individual not be entitled to the return of the seized property,
however, the administrative forfeiture of that property shall proceed.
The owner may, in any event, obtain release of property pending the
administrative forfeiture by submitting to the agency making the
determination property sufficient to preserve the Government's vested
interest for purposes of the administrative forfeiture.
Sec. 8.18 Definitions.
As used in this subpart, the following terms shall have the
meanings specified:
Commercial fishing industry vessel means a vessel that:
(1) Commercially engages in the catching, taking, or harvesting of
fish or an activity that can reasonably be expected to result in the
catching, taking, or harvesting of fish;
(2) Commercially prepares fish or fish products other than by
gutting, decapitating, gilling, skinning, shucking, icing, freezing, or
brine chilling; or
(3) Commercially supplies, stores, refrigerates, or transports
fish, fish products, or materials directly related to fishing or the
preparation of fish to or from a fishing, fish processing, or fish
tender vessel or fish processing facility.
Controlled substance has the meaning given in 21 U.S.C. 802(6).
Normal and customary manner means that inquiry suggested by
particular facts and circumstances that would customarily be undertaken
by a reasonably prudent individual in a like or similar situation.
Actual knowledge of such facts and circumstances is unnecessary, and
implied, imputed, or constructive knowledge is sufficient. An
established norm, standard, or custom is persuasive but not conclusive
or controlling in determining whether an owner acted in a normal and
customary manner to ascertain how property would be used by another
legally in possession of the property. The failure to act in a normal
and customary manner as defined herein will result in the denial of a
petition for expedited release of the property and is intended to have
the desirable effect of inducing owners of the property to exercise
greater care in transferring possession of their property. Owner means
one having a legal and possessory interest in the property seized for
forfeiture. Even though one may hold primary and direct title to the
property seized, such person may not have sufficient actual beneficial
interest in the property to support a petition as owner if the facts
indicate that another person had dominion and control over the
property.
Personal use quantities means those amounts of controlled
substances in possession in circumstances where there is no other
evidence of an intent to distribute, or to facilitate the
manufacturing, compounding, processing, delivering, importing, or
exporting of any controlled substance.
(1) Evidence that possession of quantities of a controlled
substance is for other than personal use may include, for example:
(i) Evidence, such as drug scales, drug distribution paraphernalia,
drug records, drug packaging material, method of drug packaging, drug
``cutting'' agents and other equipment, that indicates an intent to
process, package or distribute a controlled substance;
(ii) Information from reliable sources indicating possession of a
controlled substance with intent to distribute;
(iii) The arrest or conviction record of the person or persons in
actual or constructive possession of the controlled substance for
offenses under Federal, state or local law that indicates an intent to
distribute a controlled substance;
(iv) Circumstances or reliable information indicating that the
controlled substance is related to large amounts of cash or any amount
of prerecorded government funds;
(v) Circumstances or reliable information indicating that the
controlled substance is a sample intended for distribution in
anticipation of a transaction involving large quantities, or is part of
a larger delivery;
(vi) Statements by the possessor, or otherwise attributable to the
possessor, including statements of conspirators, that indicate
possession with intent to distribute; or
(vii) The fact that the controlled substance was recovered from
sweepings.
(2) Possession of a controlled substance shall be presumed to be
for personal use when there are no indicia of illicit drug trafficking
or distribution--such as, but not limited to, the factors listed
above--and the amounts do not exceed the following quantities:
(i) One gram of a mixture or substance containing a detectable
amount of heroin;
(ii) One gram of a mixture or substance containing a detectable
amount of--
(A) Coca leaves, except coca leaves and extracts of coca leaves
from which
[[Page 26670]]
cocaine, ecgonine, and derivations of ecgonine or their salts have been
removed;
(B) Cocaine, its salts, optical and geometric isomers, and salts of
isomers;
(C) Ecgonine, its derivatives, their salts, isomers, and salts of
isomers; or
(D) Any compound, mixture, or preparation that contains any
quantity of any of the substances referred to in paragraphs (2)(ii)(A)
through (C) of this definition;
(iii) \1/10\th gram of a mixture or substance described in
paragraph (e)(2)(ii) of this section which contains cocaine base;
(iv) \1/10\th gram of a mixture or substance containing a
detectable amount of phencyclidine (PCP);
(v) 500 micrograms of lysergic acid diethylamide (LSD);
(vi) One ounce of a mixture or substance containing a detectable
amount of marihuana;
(vii) One gram of methamphetamine, its salts, isomers, and salts of
its isomers, or one gram of a mixture or substance containing a
detectable amount of methamphetamine, its salts, isomers, or salts of
its isomers.
(3) The possession of a narcotic, a depressant, a stimulant, a
hallucinogen, or a cannabis-controlled substance will be considered in
excess of personal use quantities if the dosage unit amount possessed
provides the same or greater equivalent efficacy as the quantities
described in paragraph (e)(2) of this section.
Property means property subject to forfeiture under 21 U.S.C.
881(a)(4), (6), and (7); 19 U.S.C. 1595a; and 49 U.S.C. 80303.
Seizing agency means the Federal agency that has seized the
property or adopted the seizure of another agency and has the
responsibility for administratively forfeiting the property;
Statutory rights or defenses to the forfeiture means all legal and
equitable rights and remedies available to a claimant of property
seized for forfeiture.
Sec. 8.19 Petition for expedited release in an administrative
forfeiture proceeding.
(a) Where property is seized for administrative forfeiture
involving controlled substances in personal use quantities the owner
may petition the seizing agency for expedited release of the property.
(b) Where property described in Sec. 8.19(a) of this part is a
commercial fishing industry vessel proceeding to or from a fishing area
or intermediate port of call or actually engaged in fishing operations,
which would be subject to seizure for administrative forfeiture for a
violation of law involving controlled substances in personal use
quantities, a summons to appear shall be issued in lieu of a physical
seizure. The vessel shall report to the port designated in the summons.
The seizing agency shall be authorized to effect administrative
forfeiture as if the vessel had been physically seized. Upon answering
the summons to appear on or prior to the last reporting date specified
in the summons, the owner of the vessel may file a petition for
expedited release pursuant to Sec. 8.19(a) of this part, and the
provisions of Sec. 8.19(a) of this part and other provisions in this
section pertaining to a petition for expedited release shall apply as
if the vessel had been physically seized.
(c) The owner filing the petition for expedited release shall
establish the following:
(1) The owner has a valid, good faith interest in the seized
property as owner or otherwise;
(2) The owner reasonably attempted to ascertain the use of the
property in a normal and customary manner; and
(3) The owner did not know of or consent to the illegal use of the
property, or in the event that the owner knew or should have known of
the illegal use, the owner did what reasonably could be expected to
prevent the violation.
(d) In addition to those factors listed in Sec. 8.19(c) of this
part, if an owner can demonstrate that the owner has other statutory
rights or defenses that would cause the owner to prevail on the issue
of forfeiture, such factors shall also be considered in ruling on the
petition for expedited release.
(e) A petition for expedited release must be received by the
appropriate seizing agency within 20 days from the date of the first
publication of the notice of seizure in order to be considered by the
seizing agency. The petition must be executed and sworn to by the owner
and both the envelope and the request must be clearly marked ``PETITION
FOR EXPEDITED RELEASE.'' Such petition shall be filed with the
appropriate office or official identified in the personal written
notice and the publication notice.
(f) The petition shall include the following:
(1) A complete description of the property, including
identification numbers, if any, and the date and place of seizure;
(2) The petitioner's interest in the property, which shall be
supported by title documentation, bills of sale, contracts, mortgages,
or other satisfactory documentary evidence; and
(3) A statement of the facts and circumstances, to be established
by satisfactory proof, relied upon by the petitioner to justify
expedited release of the seized property.
Sec. 8.20 Ruling on petition for expedited release in an
administrative forfeiture proceeding.
(a) If a final administrative determination of the case, without
regard to the provisions of this section, is made within 21 days of the
seizure, the seizing agency need take no further action under this
section on a petition for expedited release received pursuant to Sec.
8.19(a) of this part.
(b) If no such final administrative determination is made within 21
days of the seizure, the following procedure shall apply. The seizing
agency shall, within 20 days after the receipt of the petition for
expedited release, determine whether the petition filed by the owner
has established the factors listed in Sec. 8.19(c) of this part and:
(1) If the seizing agency determines that those factors have been
established, it shall terminate the administrative proceedings and
return the property to the owner (or in the case of a commercial
fishing industry vessel for which a summons has been issued shall
dismiss the summons), except where it is evidence of a violation of
law; or
(2) If the seizing agency determines that those factors have not
been established, the agency shall proceed with the administrative
forfeiture.
Sec. 8.21 Posting of substitute monetary amount in an administrative
forfeiture proceeding.
(a) Where property is seized for administrative forfeiture
involving controlled substances in personal use quantities, the owner
may obtain release of the property by posting a substitute monetary
amount with the seizing agency to be held subject to forfeiture
proceedings in place of the seized property to be released. The
property will be released to the owner upon the payment of an amount
equal to the government appraised value of the property if the property
is not evidence of a violation of law and has no design or other
characteristics that particularly suit it for use in illegal
activities. This payment must be in the form of a traveler's check, a
money order, a cashier's check, or an irrevocable letter of credit made
payable to the seizing agency. A bond in the form of a cashier's check
will be considered as paid once the check has been accepted for payment
by the financial institution which issued the check.
(b) If a substitute amount is posted and the property is
administratively
[[Page 26671]]
forfeited, the seizing agency will forfeit the substitute amount in
lieu of the property.
Sec. 8.22 Special notice provision.
At the time of seizure of property defined in Sec. 8.18 of this
part for violations involving the possession of personal use quantities
of a controlled substance, the seizing agency must provide written
notice to the possessor of the property specifying the procedures for
the filing of a petition for expedited release and for the posting of a
substitute monetary bond as set forth in section 6079 of the Anti-Drug
Abuse Act of 1988 and implementing regulations.
Subpart C--Other Applicable Provisions
Sec. 8.23 Re-delegation of authority.
(a) Re-delegation of authority permitted. (1) The powers and
responsibilities delegated to the DEA Forfeiture Counsel by this
regulation may be re-delegated to attorneys working under the direct
supervision of the DEA Forfeiture Counsel.
(2) The powers and responsibilities delegated to the FBI Unit
Chief, Legal Forfeiture Unit, by this regulation may be re-delegated to
the attorneys working under the direct supervision of the FBI Unit
Chief, Legal Forfeiture Unit.
(3) The powers and responsibilities delegated to the Associate
Chief Counsel, Office of Chief Counsel, ATF may be re-delegated to the
attorneys working under the direct supervision of the Associate Chief
Counsel, Office of Chief Counsel, ATF.
(b) Re-delegation of authority not permitted. (1) The powers and
responsibilities delegated to the DEA Forfeiture Counsel, the FBI Unit
Chief, Legal Forfeiture Unit, and the ATF Associate Chief Counsel,
Office of Chief Counsel to make decisions regarding the disposition of
property before forfeiture pursuant to Sec. 8.14 of this part may not
be re-delegated.
(2) The powers and responsibilities delegated to the DEA Forfeiture
Counsel, the FBI Unit Chief, Legal Forfeiture Unit, and the ATF
Associate Chief Counsel, Office of Chief Counsel to make decisions
regarding the delay of notice of forfeiture pursuant to Sec. Sec.
8.9(c)(7) and (8) of this part and 18 U.S.C. 983(a)(1)(B)-(C) may not
be re-delegated.
3. Revise part 9 to read as follows:
PART 9--REGULATIONS GOVERNING THE REMISSION OR MITIGATION OF
ADMINISTRATIVE, CIVIL, AND CRIMINAL FORFEITURES
Sec.
9.1 Purpose, authority, and scope.
9.2 Definitions.
9.3 Petitions in administrative forfeiture cases.
9.4 Petitions in judicial forfeiture cases.
9.5 Criteria governing administrative and judicial remission and
mitigation.
9.6 Special rules for specific petitioners.
9.7 Terms and conditions of remission and mitigation.
9.8 Remission procedures for victims.
9.9 Miscellaneous provisions.
Authority: 5 U.S.C. 301; 8 U.S.C. 1103, 1324(b); 18 U.S.C. 981,
983, 3051; 19 U.S.C. 1606, 1607, 1608, 1610, 1612(b), 1613, 1618; 21
U.S.C. 822, 871, 872, 880, 881, 883, 958, 965; 28 U.S.C. 509, 510;
Pub. L. 100-690, sec. 6079.
Sec. 9.1 Purpose, authority, and scope.
(a) Purpose. This part sets forth the procedures for agency
officials to follow when considering remission or mitigation of
administrative forfeitures under the jurisdiction of the agency, and
civil judicial and criminal judicial forfeitures under the jurisdiction
of the Department of Justice's Criminal Division. The purpose of this
part is to provide a basis for the partial or total remission of
forfeiture for individuals who have an interest in the forfeited
property but who did not participate in, or have knowledge of, the
conduct that resulted in the property being subject to forfeiture and,
where required, took all reasonable steps under the circumstances to
ensure that such property would not be used, acquired, or disposed of
contrary to law. Additionally, the regulations provide for partial or
total mitigation of the forfeiture and imposition of alternative
conditions in appropriate circumstances.
(b) Authority to grant remission and mitigation. (1) Remission and
mitigation functions in administrative forfeitures are performed by the
agency seizing the property. Within the Federal Bureau of Investigation
(FBI), authority to grant remission and mitigation is delegated to the
Forfeiture Counsel, who is the Unit Chief, Legal Forfeiture Unit,
Office of the General Counsel; within the Drug Enforcement
Administration (DEA), authority to grant remission and mitigation is
delegated to the Forfeiture Counsel, Office of Chief Counsel; and
within the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF),
authority to grant remission and mitigation is delegated to the
Associate Chief Counsel, Office of Chief Counsel.
(2) Remission and mitigation functions in judicial cases are
performed by the Criminal Division of the Department of Justice. Within
the Criminal Division, authority to grant remission and mitigation is
delegated to the Chief, Asset Forfeiture and Money Laundering Section.
(3) The powers and responsibilities delegated by this part may be
re-delegated to attorneys or managers working under the supervision of
the designated officials.
(c) Scope. This part governs any petition for remission filed with
the Attorney General and supersedes any Department of Justice
regulation governing petitions for remission, to the extent such
regulation is inconsistent with this part.
(d) The time periods and internal requirements established in this
part are designed to guide the orderly administration of the remission
and mitigation process and are not intended to create rights or
entitlements in favor of individuals seeking remission or mitigation.
This part applies to all forfeiture actions commenced on or after
[EFFECTIVE DATE OF FINAL RULE].
Sec. 9.2 Definitions.
As used in this part:
Administrative forfeiture means the process by which property may
be forfeited by a seizing agency rather than through judicial
proceedings. Administrative forfeiture has the same meaning as
nonjudicial forfeiture, as that term is used in 18 U.S.C. 983.
Appraised value means the estimated market value of property at the
time and place of seizure if such or similar property were freely
offered for sale between a willing seller and a willing buyer.
Assets Forfeiture Fund means the Department of Justice Assets
Forfeiture Fund or Department of the Treasury Forfeiture Fund,
depending upon the identity of the seizing agency.
Attorney General means the Attorney General of the United States or
his or her designee.
Beneficial owner means a person with actual use of, as well as an
interest in, the property subject to forfeiture.
Chief, Asset Forfeiture and Money Laundering Section, and Chief,
refer to the Chief of the Asset Forfeiture and Money Laundering
Section, Criminal Division, United States Department of Justice.
General creditor means one whose claim or debt is not secured by a
specific right to obtain satisfaction against the particular property
subject to forfeiture.
[[Page 26672]]
Judgment creditor means one who has obtained a judgment against the
debtor but has not yet received full satisfaction of the judgment.
Judicial forfeiture means either a civil or a criminal proceeding
in a United States District Court that may result in a final judgment
and order of forfeiture.
Lienholder means a creditor whose claim or debt is secured by a
specific right to obtain satisfaction against the particular property
subject to forfeiture. A lien creditor qualifies as a lienholder if the
lien:
(1) Was established by operation of law or contract;
(2) Was created as a result of an exchange of money, goods, or
services; and
(3) Is perfected against the specific property forfeited for which
remission or mitigation is sought (e.g., a real estate mortgage; a
mechanic's lien).
Net equity means the amount of a lienholder's monetary interest in
property subject to forfeiture. Net equity shall be computed by
determining the amount of unpaid principal and unpaid interest at the
time of seizure and by adding to that sum unpaid interest calculated
from the date of seizure through the last full month prior to the date
of the decision on the petition. Where a rate of interest is set forth
in a security agreement, the rate of interest to be used in this
computation will be the annual percentage rate so specified in the
security agreement that is the basis of the lienholder's interest. In
this computation, however, there shall be no allowances for attorney
fees, accelerated or enhanced interest charges, amounts set by contract
as damages, unearned extended warranty fees, insurance, service
contract charges incurred after the date of seizure, allowances for
dealer's reserve, or any other similar charges.
Nonjudicial forfeiture has the same meaning as administrative
forfeiture as defined in this section.
Owner means the person in whom primary title is vested or whose
interest is manifested by the actual and beneficial use of the
property, even though the title is vested in another. A victim of an
offense, as defined in this section, may also be an owner if he or she
has a present legally cognizable ownership interest in the property
forfeited. A nominal owner of property will not be treated as its true
owner if he or she is not its beneficial owner.
Person means an individual, partnership, corporation, joint
business enterprise, estate, or other legal entity capable of owning
property.
Petition means a petition for remission or mitigation of forfeiture
under the regulations in this part. This definition includes a petition
for restoration of the proceeds of sale of forfeited property and a
petition for the value of forfeited property placed into official use.
Petitioner means the person applying for remission, mitigation, or
restoration of the proceeds of sale, or for the appraised value of
forfeited property, under this part. A petitioner may be an owner as
defined in this section, a lienholder as defined in this section, or a
victim as defined in this section, subject to the limitations of Sec.
9.8.
Property means real or personal property of any kind capable of
being owned or possessed.
Record means a series of arrests for related crimes, unless the
arrestee was acquitted or the charges were dismissed for lack of
evidence, a conviction for a related crime or completion of sentence
within ten years of the acquisition of the property subject to
forfeiture, or two convictions for a related crime at any time in the
past.
Related crime as defined in this section and used in Sec. 9.6(e)
means any crime similar in nature to that which gives rise to the
seizure of property for forfeiture. For example, where property is
seized for a violation of the Federal laws relating to drugs, a related
crime would be any offense involving a violation of the Federal laws
relating to drugs or the laws of any state or political subdivision
thereof relating to drugs.
Related offense as used in Sec. 9.8 means:
(1) Any predicate offense charged in a Federal Racketeer Influenced
and Corrupt Organizations Act (RICO) count for which forfeiture was
ordered; or
(2) An offense committed as part of the same scheme or design, or
pursuant to the same conspiracy, as was involved in the offense for
which forfeiture was ordered.
Ruling official means any official to whom decision making
authority has been delegated pursuant to Sec. 9.1(b).
Seizing agency means the Federal agency that seized the property or
adopted the seizure of another agency for Federal forfeiture.
Victim means a person who has incurred a pecuniary loss as a direct
result of the commission of the offense underlying a forfeiture. A drug
user is not considered a victim of a drug trafficking offense under
this definition. A victim does not include one who acquires a right to
sue the perpetrator of the criminal offense for any loss by assignment,
subrogation, inheritance, or otherwise from the actual victim, unless
that person has acquired an actual ownership interest in the forfeited
property; provided however, that if a victim has received compensation
from insurance or any other source with respect to a pecuniary loss,
remission may be granted to the third party who provided the
compensation, up to the amount of the victim's pecuniary loss as
defined in Sec. 9.8(c).
Violator means the person whose use or acquisition of the property
in violation of the law subjected such property to seizure for
forfeiture.
Sec. 9.3 Petitions in administrative forfeiture cases.
(a) Notice of seizure. The notice of seizure and intent to forfeit
the property shall advise any persons who may have a present ownership
interest in the property to submit their petitions for remission or
mitigation within 30 days of the date they receive the notice in order
to facilitate processing. Petitions shall be considered any time after
notice until the property has been forfeited, except in cases involving
petitions to restore the proceeds from the sale of forfeited property.
A notice of seizure shall include the title of the seizing agency, the
ruling official, the mailing and street address of the official to whom
petitions should be sent, and an asset identifier number.
(b) Persons who may file. (1) A petition for remission or
mitigation must be filed by a petitioner as defined in Sec. 9.2 of
this part or as prescribed in Sec. 9.9(g) and (h) of this part. A
person or person on their behalf may not file a petition if, after
notice or knowledge of the fact that a warrant or process has been
issued for his apprehension, in order to avoid criminal prosecution,
the person:
(i) Purposely leaves the jurisdiction of the United States;
(ii) Declines to enter or reenter the United States to submit to
its jurisdiction; or
(iii) Otherwise evades the jurisdiction of the court in which a
criminal matter is pending against the person.
(2) Section 9.3(b)(1) of this part applies to a petition filed by a
corporation if any majority shareholder, or individual filing the claim
on behalf of the corporation:
(i) Purposely leaves the jurisdiction of the United States;
(ii) Declines to enter or reenter the United States to submit to
its jurisdiction; or
(iii) Otherwise evades the jurisdiction of the court in which a
criminal matter is pending against the person.
(c) Contents of petition. (1) All petitions must include the
following information in clear and concise terms:
[[Page 26673]]
(i) The name, address, and social security or other taxpayer
identification number of the person claiming an interest in the seized
property who is seeking remission or mitigation;
(ii) The name of the seizing agency, the asset identifier number,
and the date and place of seizure;
(iii) A complete description of the property, including make,
model, and serial numbers, if any; and
(iv) A description of the petitioner's interest in the property as
owner, lienholder, or otherwise, supported by original or certified
bills of sale, contracts, deeds, mortgages, or other documentary
evidence. Such documentation includes evidence establishing the source
of funds for seized currency or the source of funds used to purchase
the seized asset.
(2) Any factual recitation or documentation of any type in a
petition must be supported by a declaration under penalty of perjury
that meets the requirements of 28 U.S.C. 1746.
(d) Releases. In addition to the contents of the petition for
remission or mitigation set forth in Sec. 9.3(c) of this part, upon
request of the agency, the petitioner shall also furnish the agency
with an instrument executed by the titled or registered owner and any
other known claimant of an interest in the property releasing interest
in such property.
(e) Filing petition with agency. (1) A petition for remission or
mitigation subject to administrative forfeiture is to be sent to the
official address provided in the notice of seizure and shall be sworn
to by the petitioner or by the petitioner's attorney upon information
and belief, supported by the client's sworn notice of representation
pursuant to 28 U.S.C. 1746, as set out in Sec. 9.9(g) of this part.
(2) If the notice of seizure does not provide an official address,
the petition shall be addressed to the appropriate Federal agency as
follows:
(i)(A) DEA: All submissions must be filed with the Forfeiture
Counsel, Asset Forfeiture Section, Office of Chief Counsel, Drug
Enforcement Administration, HQS Forfeiture Response, P.O. Box 1475,
Quantico, Virginia 22134-1475.
(B) Correspondence via private delivery must be filed with the
Forfeiture Counsel, Asset Forfeiture Section (CCF), Office of Chief
Counsel, Drug Enforcement Administration, 8701 Morrissette Drive,
Springfield, Virginia 22152.
(C) Submission by facsimile or other electronic means will not be
accepted.
(ii)(A) FBI: All submissions must be filed with the FBI Special
Agent in Charge at the Field Office that seized the property.
(B) Submission by facsimile or other electronic means will not be
accepted.
(iii)(A) ATF: All submissions must be filed with the Office of
Chief Counsel, Attention: Forfeiture Counsel, 99 New York Avenue, NE,
Washington, DC 20226.
(B) Submission by facsimile or other electronic means will not be
accepted.
(f) Agency investigation. Upon receipt of a petition, the seizing
agency shall investigate the merits of the petition and may prepare a
written report containing the results of that investigation. This
report shall be submitted to the ruling official for review and
consideration.
(g) Ruling. Upon receipt of the petition and the agency report, the
ruling official for the seizing agency shall review the petition and
the report, if any, and shall rule on the merits of the petition. No
hearing shall be held.
(h) Petitions granted. If the ruling official grants a remission or
mitigation of the forfeiture, a copy of the decision shall be mailed to
the petitioner or, if represented by an attorney, to the petitioner's
attorney. A copy shall also be sent to the United States Marshals
Service (USMS) or other property custodian. The written decision shall
include the terms and conditions, if any, upon which the remission or
mitigation is granted and the procedures the petitioner must follow to
obtain release of the property or the monetary interest therein.
(i) Petitions denied. If the ruling official denies a petition, a
copy of the decision shall be mailed to the petitioner or, if
represented by an attorney, to the petitioner's attorney of record. A
copy of the decision shall also be sent to the USMS or other property
custodian. The decision shall specify the reason that the petition was
denied. The decision shall advise the petitioner that a request for
reconsideration of the denial of the petition may be submitted to the
ruling official in accordance with Sec. 9.3(j) of this part.
(j) Request for reconsideration. (1) A request for reconsideration
of the denial of the petition shall be considered if:
(i) It is postmarked or received by the office of the ruling
official within 10 days from the receipt of the notice of denial of the
petition by the petitioner; and
(ii) The request is based on information or evidence not previously
considered that is material to the basis for the denial or presents a
basis clearly demonstrating that the denial was erroneous.
(2) In no event shall a request for reconsideration be decided by
the same ruling official who ruled on the original petition.
(3) Only one request for reconsideration of a denial of a petition
shall be considered.
(k) Restoration of proceeds from sale. (1) A petition for
restoration of the proceeds from the sale of forfeited property, or for
the appraised value of forfeited property when the forfeited property
has been retained by or delivered to a government agency for official
use, may be submitted by an owner or lienholder in cases in which the
petitioner:
(i) Did not know of the seizure prior to the entry of a declaration
of forfeiture; and
(ii) Could not reasonably have known of the seizure prior to the
entry of a declaration of forfeiture.
(2) Such a petition shall be submitted pursuant to Sec. 9.3(b)
through (e) of this part within 90 days of the date the property is
sold or otherwise disposed of.
Sec. 9.4 Petitions in judicial forfeiture cases.
(a) Notice of seizure. The notice of seizure and intent to forfeit
the property shall advise any persons who may have a present ownership
interest in the property to submit their petitions for remission or
mitigation within 30 days of the date they receive the notice in order
to facilitate processing. Petitions shall be considered any time after
notice until such time as the forfeited property is placed in official
use, sold, or otherwise disposed of according to law, except in cases
involving petitions to restore property. A notice of seizure shall
include the title of the ruling official and the mailing and street
address of the official to whom petitions should be sent, the name of
the agency seizing the property, an asset identifier number, and the
district court docket number.
(b) Persons who may file. A petition for remission or mitigation
must be filed by a petitioner as defined in Sec. 9.2(p) of this part
or as prescribed in Sec. 9.9(g) and (h) of this part.
(c) Contents of petition. (1) All petitions must include the
following information in clear and concise terms:
(i) The name, address, and social security or other taxpayer
identification number of the person claiming an interest in the seized
property who is seeking remission or mitigation;
(ii) The name of the seizing agency, the asset identifier number,
and the date and place of seizure;
(iii) The district court docket number;
(iv) A complete description of the property, including the address
or legal description of real property, and make,
[[Page 26674]]
model, and serial numbers of personal property, if any; and
(v) A description of the petitioner's interest in the property as
owner, lienholder, or otherwise, supported by original or certified
bills of sale, contracts, mortgages, deeds, or other documentary
evidence.
(2) Any factual recitation or documentation of any type in a
petition must be supported by a declaration under penalty of perjury
that meets the requirements of 28 U.S.C. 1746.
(d) Releases. In addition to the content of the petition for
remission or mitigation set forth in Sec. 9.4(c) of this part, the
petitioner, upon request, also shall furnish the agency with an
instrument executed by the titled or registered owner and any other
known claimant of an interest in the property releasing the interest in
such property.
(e) Filing petition with Department of Justice. A petition for
remission or mitigation of a judicial forfeiture shall be addressed to
the Attorney General; shall be sworn to by the petitioner or by the
petitioner's attorney upon information and belief, supported by the
client's sworn notice of representation pursuant to 28 U.S.C. 1746, as
set forth in Sec. 9.9(g) of this part; and shall be submitted to the
U.S. Attorney for the district in which the judicial forfeiture
proceedings are brought.
(f) Agency investigation and recommendation; U.S. Attorney's
recommendation. Upon receipt of a petition, the U.S. Attorney shall
direct the seizing agency to investigate the merits of the petition
based on the information provided by the petitioner and the totality of
the agency's investigation of the underlying basis for forfeiture. The
agency shall submit to the U.S. Attorney a report of its investigation
and its recommendation on whether the petition should be granted or
denied. Upon receipt of the agency's report and recommendation, the
U.S. Attorney shall forward to the Chief, Asset Forfeiture and Money
Laundering Section, the petition, the seizing agency's report and
recommendation, and the U.S. Attorney's recommendation on whether the
petition should be granted or denied.
(g) Ruling. The Chief shall rule on the petition. No hearing shall
be held. The Chief shall not rule on any petition for remission if such
remission was previously denied by the agency pursuant to Sec. 9.3 of
this part.
(h) Petitions under Internal Revenue Service liquor laws. The Chief
shall accept and consider petitions submitted in judicial forfeiture
proceedings under the Internal Revenue Service liquor laws only prior
to the time a decree of forfeiture is entered. Thereafter, the district
court has exclusive jurisdiction.
(i) Petitions granted. If the Chief grants a remission or mitigates
the forfeiture, the Chief shall mail a copy of the decision to the
petitioner (or, if represented by an attorney, to the petitioner's
attorney) and shall mail or transmit electronically a copy of the
decision to the appropriate U.S. Attorney, the USMS or other property
custodian, and the seizing agency. The written decision shall include
the terms and conditions, if any, upon which the remission or
mitigation is granted and the procedures the petitioner must follow to
obtain release of the property or the monetary interest therein. The
Chief shall advise the petitioner or the petitioner's attorney to
consult with the U.S. Attorney as to such terms and conditions. The
U.S. Attorney shall confer with the seizing agency regarding the
release and shall coordinate disposition of the property with that
office and the USMS or other property custodian.
(j) Petitions denied. If the Chief denies a petition, a copy of
that decision shall be mailed to the petitioner (or, if represented by
an attorney, to the petitioner's attorney of record) and mailed or
transmitted electronically to the appropriate U.S. Attorney, the USMS
or other property custodian, and to the seizing agency. The decision
shall specify the reason that the petition was denied. The decision
shall advise the petitioner that a request for reconsideration of the
denial of the petition may be submitted to the Chief at the address
provided in the decision, in accordance with Sec. 9.4(k) of this part.
(k) Request for reconsideration. (1) A request for reconsideration
of the denial shall be considered if:
(i) It is postmarked or received by the Asset Forfeiture and Money
Laundering Section at the address contained in the decision denying the
petition within 10 days from the receipt of the notice of denial of the
petition by the petitioner;
(ii) A copy of the request is also received by the appropriate U.S.
Attorney within 10 days of the receipt of the denial by the petitioner;
and
(iii) The request is based on information or evidence not
previously considered that is material to the basis for the denial or
presents a basis clearly demonstrating that the denial was erroneous.
(2) In no event shall a request for reconsideration be decided by
the ruling official who ruled on the original petition.
(3) Only one request for reconsideration of a denial of a petition
shall be considered.
(4) Upon receipt of the request for reconsideration of the denial
of a petition, disposition of the property will be delayed pending
notice of the decision at the request of the Chief. If the request for
reconsideration is not received within the prescribed period, the USMS
may dispose of the property.
(l) Restoration of proceeds from sale. (1) A petition for
restoration of the proceeds from the sale of forfeited property, or for
the appraised value of forfeited property when the forfeited property
has been retained by or delivered to a government agency for official
use, may be submitted by an owner or lienholder in cases in which the
petitioner:
(i) Did not know of the seizure prior to the entry of a final order
of forfeiture; and
(ii) Could not reasonably have known of the seizure prior to the
entry of a final order of forfeiture.
(2) Such a petition must be submitted pursuant to Sec. 9.4(b)
through (e) of this part within 90 days of the date the property was
sold or otherwise disposed of.
Sec. 9.5 Criteria governing administrative and judicial remission and
mitigation.
(a) Remission. (1) The ruling official shall not grant remission of
a forfeiture unless the petitioner establishes that the petitioner has
a valid, good faith, and legally cognizable interest in the seized
property as owner or lienholder as defined in this part and is an
innocent owner within the meaning of 18 U.S.C. 983(d)(2)(A) or
983(d)(3)(A).
(2) For purposes of paragraph (a)(1) of this section, the knowledge
and responsibilities of a petitioner's representative, agent, or
employee are imputed to the petitioner where the representative, agent,
or employee was acting in the course of his or her employment and in
furtherance of the petitioner's business.
(3) The petitioner has the burden of establishing the basis for
granting a petition for remission or mitigation of forfeited property,
a restoration of proceeds of sale or appraised value of forfeited
property, or a reconsideration of a denial of such a petition. Failure
to provide information or documents and to submit to interviews, as
requested, may result in a denial of the petition.
(4) The ruling official shall presume a valid forfeiture and shall
not consider whether the evidence is sufficient to support the
forfeiture.
(5) Willful, materially-false statements or information made or
furnished by the
[[Page 26675]]
petitioner in support of a petition for remission or mitigation of
forfeited property, the restoration of proceeds or appraised value of
forfeited property, or the reconsideration of a denial of any such
petition, shall be grounds for denial of such petition and possible
prosecution for the filing of false statements.
(b) Mitigation. (1) The ruling official may grant mitigation to a
party not involved in the commission of the offense underlying
forfeiture:
(i) Where the petitioner has not met the minimum conditions for
remission, but the ruling official finds that some relief should be
granted to avoid extreme hardship, and that return of the property
combined with imposition of monetary or other conditions of mitigation
in lieu of a complete forfeiture will promote the interest of justice
and will not diminish the deterrent effect of the law. Extenuating
circumstances justifying such a finding include those circumstances
that reduce the responsibility of the petitioner for knowledge of the
illegal activity, knowledge of the criminal record of a user of the
property, or failure to take reasonable steps to prevent the illegal
use or acquisition by another for some reason, such as a reasonable
fear of reprisal; or
(ii) Where the minimum standards for remission have been satisfied
but the overall circumstances are such that, in the opinion of the
ruling official, complete relief is not warranted.
(2) The ruling official may in his or her discretion grant
mitigation to a party involved in the commission of the offense
underlying the forfeiture where certain mitigating factors exist,
including, but not limited to: The lack of a prior record or evidence
of similar criminal conduct; if the violation does not include drug
distribution, manufacturing, or importation, the fact that the violator
has taken steps, such as drug treatment, to prevent further criminal
conduct; the fact that the violation was minimal and was not part of a
larger criminal scheme; the fact that the violator has cooperated with
Federal, state, or local investigations relating to the criminal
conduct underlying the forfeiture; or the fact that complete forfeiture
of an asset is not necessary to achieve the legitimate purposes of
forfeiture.
(3) Mitigation may take the form of a monetary condition or the
imposition of other conditions relating to the continued use of the
property, and the return of the property, in addition to the imposition
of any other costs that would be chargeable as a condition to
remission. This monetary condition is considered as an item of cost
payable by the petitioner, and shall be deposited into the Assets
Forfeiture Fund as an amount realized from forfeiture in accordance
with the applicable statute. If the petitioner fails to accept the
ruling official's mitigation decision or any of its conditions, or
fails to pay the monetary amount within 20 days of the receipt of the
decision, the property shall be sold, and the monetary amount imposed
and other costs chargeable as a condition to mitigation shall be
subtracted from the proceeds of the sale before transmitting the
remainder to the petitioner.
Sec. 9.6 Special rules for specific petitioners.
(a) General creditors. A general creditor may not be granted
remission or mitigation of forfeiture unless he or she otherwise
qualifies as petitioner under this part.
(b) Rival claimants. If the beneficial owner of the forfeited
property and the owner of a security interest in the same property each
file a petition, and if both petitions are found to be meritorious, the
claims of the beneficial owner shall take precedence.
(c) Voluntary bailments. A petitioner who allows another to use his
or her property without cost, and who is not in the business of lending
money secured by property or of leasing or renting property for profit,
shall be granted remission or mitigation of forfeiture in accordance
with the provisions of Sec. 9.5 of this part.
(d) Lessors. A person engaged in the business of leasing or renting
real or personal property on a long-term basis with the right to
sublease shall not be entitled to remission or mitigation of a
forfeiture of such property unless the lessor can demonstrate
compliance with all the requirements of Sec. 9.5 of this part.
(e) Straw owners. A petition by any person who has acquired a
property interest recognizable under this part, and who knew or had
reason to believe that the interest was conveyed by the previous owner
for the purpose of circumventing seizure, forfeiture, or the
regulations in this part, shall be denied. A petition by a person who
purchases or owns property for another who has a record for related
crimes as defined in Sec. 9.2 of this part, or a petition by a
lienholder who knows or has reason to believe that the purchaser or
owner of record is not the real purchaser or owner, shall be denied
unless both the purchaser of record and the real purchaser or owner
meet the requirements of Sec. 9.5 of this part.
(f) Judgment creditors. (1) A judgment creditor will be recognized
as a lienholder if:
(i) The judgment was duly recorded before the seizure of the
property for forfeiture;
(ii) Under applicable state or other local law, the judgment
constitutes a valid lien on the property that attached to it before the
seizure of the property for forfeiture; and
(iii) The petitioner had no knowledge of the commission of any act
or acts giving rise to the forfeiture at the time the judgment became a
lien on the forfeited property.
(2) A judgment creditor will not be recognized as a lienholder if
the property in question is not property of which the judgment debtor
is entitled to claim ownership under applicable state or other local
law (e.g., stolen property). A judgment creditor is entitled under this
part to no more than the amount of the judgment, exclusive of any
interest, costs, or other fees including attorney fees associated with
the action that led to the judgment or its collection.
(3) A judgment creditor's lien must be registered in the district
where the property is located if the judgment was obtained outside the
district.
Sec. 9.7 Terms and conditions of remission and mitigation.
(a) Owners. (1) An owner's interest in property that has been
forfeited is represented by the property itself or by a monetary
interest equivalent to that interest at the time of seizure. Whether
the property or a monetary equivalent will be remitted to an owner
shall be determined at the discretion of the ruling official.
(2) If a civil judicial forfeiture action against the property is
pending, release of the property must await an appropriate court order.
(3) Where the Government sells or disposes of the property prior to
the grant of the remission, the owner shall receive the proceeds of
that sale, less any costs incurred by the Government in the sale. The
ruling official, at his or her discretion, may waive the deduction of
costs and expenses incident to the forfeiture.
(4) Where the owner does not comply with the conditions imposed
upon release of the property by the ruling official, the property shall
be sold. Following the sale, the proceeds shall be used to pay all
costs of the forfeiture and disposition of the property, in addition to
any monetary conditions imposed. The remaining balance shall be paid to
the owner.
(b) Lienholders. (1) When the forfeited property is to be retained
for official use or transferred to a state or local law enforcement
agency or foreign government pursuant to law, and
[[Page 26676]]
remission or mitigation has been granted to a lienholder, the recipient
of the property shall assure that:
(i) In the case of remission, the lien is satisfied as determined
through the petition process; or
(ii) In the case of mitigation, an amount equal to the net equity,
less any monetary conditions imposed, is paid to the lienholder prior
to the release of the property to the recipient agency or foreign
government.
(2) When the forfeited property is not retained for official use or
transferred to another agency or foreign government pursuant to law,
the lienholder shall be notified by the ruling official of the right to
select either of the following alternatives:
(i) Return of property. The lienholder may obtain possession of the
property after paying the United States, through the ruling official,
the costs and expenses incident to the forfeiture, the amount, if any,
by which the appraised value of the property exceeds the lienholder's
net equity in the property, and any amount specified in the ruling
official's decision as a condition to remit the property. The ruling
official, at his or her discretion, may waive costs and expenses
incident to the forfeiture. The ruling official shall forward a copy of
the decision, a memorandum of disposition, and the original releases to
the USMS or other property custodian who shall thereafter release the
property to the lienholder; or
(ii) Sale of property and payment to lienholder. Subject to Sec.
9.9(a) of this part, upon sale of the property, the lienholder may
receive the payment of a monetary amount up to the sum of the
lienholder's net equity, less the expenses and costs incident to the
forfeiture and sale of the property, and any other monetary conditions
imposed. The ruling official, at his or her discretion, may waive costs
and expenses incident to the forfeiture.
(3) If the lienholder does not notify the ruling official of the
selection of one of the two options set forth in Sec. 9.7(b)(2) of
this part within 20 days of the receipt of notification, the ruling
official shall direct the USMS or other property custodian to sell the
property and pay the lienholder an amount up to the net equity, less
the costs and expenses incurred incident to the forfeiture and sale,
and any monetary conditions imposed. In the event a lienholder
subsequently receives a payment of any kind on the debt owed for which
he or she received payment as a result of the granting of remission or
mitigation, the lienholder shall reimburse the Assets Forfeiture Fund
to the extent of the payment received.
(4) Where the lienholder does not comply with the conditions
imposed upon the release of the property, the property shall be sold
after forfeiture. From the proceeds of the sale, all costs incident to
the forfeiture and sale shall first be deducted, and the balance up to
the net equity, less any monetary conditions, shall be paid to the
lienholder.
Sec. 9.8 Remission procedures for victims.
This section applies to victims of an offense underlying the
forfeiture of property, or of a related offense, who do not have a
present ownership interest in the forfeited property (or, in the case
of multiple victims of an offense, who do not have a present ownership
interest in the forfeited property that is clearly superior to that of
other petitioner victims). This section applies only with respect to
property forfeited pursuant to statutes that explicitly authorize
restoration or remission of forfeited property to victims. A victim
requesting remission under this section may concurrently request
remission as an owner, pursuant to the regulations set forth in
Sec. Sec. 9.3, 9.4, and 9.7 of this part. The claims of victims
granted remission as both an owner and victim shall, like claims of
other owners, have priority over the claims of any non-owner victims
whose claims are recognized under this section.
(a) Remission procedure for victims. (1) Where to file. Persons
seeking remission as victims shall file petitions for remission with
the appropriate deciding official as described in Sec. 9.3(e)
(administrative forfeiture) or Sec. 9.4(e) (judicial forfeiture) of
this part.
(2) Time of decision. The deciding official or his designee as
described in Sec. 9.1(b) of this part may consider petitions filed by
persons claiming eligibility for remission as victims at any time prior
to the disposal of the forfeited property in accordance with law.
(3) Request for reconsideration. Persons denied remission under
this section may request reconsideration of the denial, in accordance
with Sec. 9.3(j) (administrative forfeiture) or Sec. 9.4(k) (judicial
forfeiture) of this part.
(b) Qualification to file. A victim, as defined in Sec. 9.2 of
this part, may be granted remission, if in addition to complying with
the other applicable provisions of Sec. 9.8, the victim satisfactorily
demonstrates that:
(1) A pecuniary loss of a specific amount has been directly caused
by the criminal offense, or related offense, that was the underlying
basis for the forfeiture, and that the loss is supported by documentary
evidence including invoices and receipts;
(2) The pecuniary loss is the direct result of the illegal acts and
is not the result of otherwise lawful acts that were committed in the
course of a criminal offense;
(3) The victim did not knowingly contribute to, participate in,
benefit from, or act in a willfully blind manner towards the commission
of the offense, or related offense, that was the underlying basis of
the forfeiture;
(4) The victim has not in fact been compensated for the wrongful
loss of the property by the perpetrator or others; and
(5) The victim does not have recourse reasonably available to other
assets from which to obtain compensation for the wrongful loss of the
property.
(c) Pecuniary loss. The amount of the pecuniary loss suffered by a
victim for which remission may be granted is limited to the fair market
value of the property of which the victim was deprived as of the date
of the occurrence of the loss. No allowance shall be made for interest
forgone or for collateral expenses incurred to recover lost property or
to seek other recompense.
(d) Torts. A tort associated with illegal activity that formed the
basis for the forfeiture shall not be a basis for remission, unless it
constitutes the illegal activity itself, nor shall remission be granted
for physical injuries to a petitioner or for damage to a petitioner's
property.
(e) Denial of petition. In the exercise of his or her discretion,
the ruling official may decline to grant remission where:
(1) There is substantial difficulty in calculating the pecuniary
loss incurred by the victim or victims;
(2) The amount of the remission, if granted, would be small
compared with the amount of expenses incurred by the Government in
determining whether to grant remission; or
(3) The total number of victims is large and the monetary amount of
the remission so small as to make its granting impractical.
(f) Pro rata basis. In granting remission to multiple victims
pursuant to this section, the ruling official should generally grant
remission on a pro rata basis to recognized victims when petitions
cannot be granted in full due to the limited value of the forfeited
property. However, the ruling official may consider, among others, the
following factors in establishing appropriate priorities in individual
cases:
(1) The specificity and reliability of the evidence establishing a
loss;
[[Page 26677]]
(2) The fact that a particular victim is suffering an extreme
financial hardship;
(3) The fact that a particular victim has cooperated with the
Government in the investigation related to the forfeiture or to a
related prosecution or civil action; and
(4) In the case of petitions filed by multiple victims of related
offenses, the fact that a particular victim is a victim of the offense
underlying the forfeiture.
(g) Reimbursement. Any petitioner granted remission pursuant to
this part shall reimburse the Assets Forfeiture Fund for the amount
received to the extent the individual later receives compensation for
the loss of the property from any other source. The petitioner shall
surrender the reimbursement upon payment from any secondary source.
(h) Claims of financial institution regulatory agencies. In cases
involving property forfeitable under 18 U.S.C. 981(a)(1)(C) or (D), the
ruling official may decline to grant a petition filed by a petitioner
in whole or in part due to the lack of sufficient forfeitable funds to
satisfy both the petition and claims of the financial institution
regulatory agencies pursuant to 18 U.S.C. 981(e)(3) or (7). Generally,
claims of financial institution regulatory agencies pursuant to 18
U.S.C. 981(e)(3) or (7) shall take priority over claims of victims.
(i) Amount of remission. Consistent with the Assets Forfeiture Fund
statute (28 U.S.C. 524(c)), the amount of remission shall not exceed
the victim's share of the net proceeds of the forfeitures associated
with the activity that caused the victim's loss. The calculation of net
proceeds includes, but is not limited to, the deduction of allowable
government expenses and valid third-party claims.
Sec. 9.9 Miscellaneous provisions.
(a) Priority of payment. Except where otherwise provided in this
part, costs incurred by the USMS and other agencies participating in
the forfeiture that were incident to the forfeiture, sale, or other
disposition of the property shall be deducted from the amount available
for remission or mitigation. Such costs include, but are not limited
to, court costs, storage costs, brokerage and other sales-related
costs, the amount of any liens and associated costs paid by the
Government on the property, costs incurred in paying the ordinary and
necessary expenses of a business seized for forfeiture, awards for
information as authorized by statute, expenses of trustees or other
assistants pursuant to Sec. 9.9(c) of this part, investigative or
prosecutive costs specially incurred incident to the particular
forfeiture, and costs incurred incident to the processing of the
petition(s) for remission or mitigation. The remaining balance shall be
available for remission or mitigation. The ruling official shall direct
the distribution of the remaining balance in the following order of
priority, except that the ruling official may exercise discretion in
determining the priority between petitioners belonging to classes
described in paragraphs (a)(3) and (4) of this section in exceptional
circumstances:
(1) Owners;
(2) Lienholders;
(3) Federal financial institution regulatory agencies (pursuant to
paragraph (e) of this section), not constituting owners or lienholders;
and
(4) Victims not constituting owners or lienholders (pursuant to
Sec. 9.8 of this part).
(b) Sale or disposition of property prior to ruling. If forfeited
property has been sold or otherwise disposed of prior to a ruling, the
ruling official may grant relief in the form of a monetary amount. The
amount realized by the sale of the property is presumed to be the value
of the property. Monetary relief shall not be greater than the
appraised value of the property at the time of seizure and shall not
exceed the amount realized from the sale or other disposition. The
proceeds of the sale shall be distributed as follows:
(1) Payment of the Government's expenses incurred incident to the
forfeiture and sale, including court costs and storage charges, if any;
(2) Payment to the petitioner of an amount up to his or her
interest in the property;
(3) Payment to the Assets Forfeiture Fund of all other costs and
expenses incident to the forfeiture;
(4) In the case of victims, payment of any amount up to the amount
of his or her loss; and
(5) Payment of the balance remaining, if any, to the Assets
Forfeiture Fund.
(c) Trustees and other assistants. In the exercise of his or her
discretion, the ruling official, with the approval of the Asset
Forfeiture and Money Laundering Section, may use the services of a
trustee, other government official, or appointed contractors to notify
potential petitioners, process petitions, and make recommendations to
the ruling official on the distribution of property to petitioners. The
expense for such assistance shall be paid out of the forfeited funds.
(d) Other agencies of the United States. Where another agency of
the United States is entitled to remission or mitigation of forfeited
assets because of an interest that is recognizable under this part or
is eligible for such transfer pursuant to 18 U.S.C. 981(e)(6), such
agency shall request the transfer in writing, in addition to complying
with any applicable provisions of Sec. Sec. 9.3 through 9.5 of this
part. The decision to make such transfer shall be made in writing by
the ruling official.
(e) Financial institution regulatory agencies. A ruling official
may direct the transfer of property under 18 U.S.C. 981(e) to certain
Federal financial institution regulatory agencies or an entity acting
on their behalf, upon receipt of a written request, in lieu of ruling
on a petition for remission or mitigation.
(f) Transfers to foreign governments. A ruling official may decline
to grant remission to any petitioner other than an owner or lienholder
so that forfeited assets may be transferred to a foreign government
pursuant to 18 U.S.C. 981(i)(1), 19 U.S.C. 1616a(c)(2), or 21 U.S.C.
881(e)(1)(E).
(g) Filing by attorneys. (1) A petition for remission or mitigation
may be filed by a petitioner or by his or her attorney or legal
guardian. If an attorney files on behalf of the petitioner, the
petition must include a signed and sworn statement by the client-
petitioner stating that:
(i) The attorney has the authority to represent the petitioner in
this proceeding;
(ii) The petitioner has fully reviewed the petition; and
(iii) The petition is truthful and accurate in every respect.
(2) Verbal notification of representation is not acceptable.
Responses and notification of rulings shall not be sent to an attorney
claiming to represent a petitioner unless a written notice of
representation is filed. No extensions of time shall be granted due to
delays in submission of the notice of representation.
(h) Consolidated petitions. At the discretion of the ruling
official in individual cases, a petition may be filed by one petitioner
on behalf of other petitioners, provided the petitions are based on
similar underlying facts, and the petitioner who files the petition has
written authority to do so on behalf of the other petitioners. This
authority must be either expressed in documents giving the petitioner
the authority to file petitions for remission, or reasonably implied
from documents giving the petitioner express authority to file claims
or lawsuits related to the course of conduct in question on behalf of
these petitioners. An insurer or an administrator of an employee
benefit plan, for example, which itself has standing to file a petition
as a ``victim''
[[Page 26678]]
within the meaning of Sec. 9.2 of this part, may also file a petition
on behalf of its insured or plan beneficiaries for any claims they may
have based on co-payments made to the perpetrator of the offense
underlying the forfeiture or the perpetrator of a ``related offense''
within the meaning of Sec. 9.2 of this part, if the authority to file
claims or lawsuits is contained in the document or documents
establishing the plan. Where such a petition is filed, any amounts
granted as a remission must be transferred to the other petitioners,
not the party filing the petition; although, in his or her discretion,
the ruling official may use the actual petitioner as an intermediary
for transferring the amounts authorized as a remission to the other
petitioners.
Dated: April 18, 2011.
Eric H. Holder, Jr.,
Attorney General.
[FR Doc. 2011-9826 Filed 5-6-11; 8:45 am]
BILLING CODE 4410-02-P; 4410-FY-P; 4410-09-P; 4410-14-P