Daily Rules, Proposed Rules, and Notices of the Federal Government
On May 9, 2011, the Department of Justice (the Department) published for public comment proposed regulations implementing the Civil Asset Forfeiture Reform Act of 2000 (CAFRA) (76 FR 26660). Before the comment period closed on July 8, 2011, the Department received comments from only two commenters. The comments and the Department's responses are discussed below in section III.
This rule complies with the requirement under Section 6 of Executive Order 13563 (Jan. 18, 2011) to modify and streamline outmoded and burdensome regulations. First, this final 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 the 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 consolidates its regulations governing the seizure and administrative forfeiture of property by ATF, DEA, and the FBI. Among other things, this rulemaking identifies the scope of these regulations, updates definitions, identifies the scope of authority available to each of those seizing agencies 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.
Second, the rule conforms 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 rule interprets CAFRA based on case law and agency expertise and experience.
Third, the rule updates the regulations to conform to other authorities and current forfeiture practice. Thus, § 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 § 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 redelegations 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 government Internet site instead of in a newspaper.
Fourth, the 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.
Consistent with Executive Order 13563, this rule is needed to ensure that the Department's seizure and forfeiture regulations accurately reflect the current composition of the Department, the current state of the law, and current practices and procedures relating to the seizure, forfeiture, and remission of assets. Specifically, the rule is necessary to recognize ATF as part of the Department and to bring clarity to the regulatory framework by consolidating the ATF, DEA, and FBI regulations governing the seizure and
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 by helping ensure that the administrative forfeiture process is governed by uniform procedures.
The final 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 redelegations 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.
The rule incorporates CAFRA's modifications to the general rules for civil forfeiture proceedings,
Pursuant to Rule G(4)(a)(iv)(C), in all civil judicial forfeitures, the Government may give 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 official government Web site, currently
The final rule includes modifications to the regulations governing the remission or mitigation of forfeiture at 28 CFR part 9. Section 9.3(e)(2) is revised by listing 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 § 9.2 is modified to make remission available to qualified third parties who reimburse a victim pursuant to an indemnification agreement. In addition, § 9.8 is modified to specify the procedures applicable to persons seeking remission as victims.
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 at least 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 § 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
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
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 authorize the destruction, sale, or other disposition of seized property prior to forfeiture whenever it appears that the 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 final 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.
The Department received two comments on the rule. One comment was a general statement of support for the rule. The other comment came from a group of four organizations representing numerous American newspapers (collectively, “Newspaper Group”). The Newspaper Group objected to § 8.9 (“Notice of administrative forfeiture”), which consolidates seizure and forfeiture regulations for ATF, DEA, and FBI. Specifically, the Newspaper Group objected to § 8.9(a)(1), which permits the seizing agency to provide public notice of an administrative forfeiture proceeding by publishing notice either on an official government Internet site for at least 30 consecutive days, or once a week for at least three successive weeks in a newspaper of general circulation in the judicial district where the property was seized. The Newspaper Group maintained that “any Internet notice is an inadequate substitute for a printed, fixed newspaper notice” and therefore opposed authorizing agencies to publish notice of administrative forfeiture proceedings on an official government forfeiture Web site as an alternative to traditional newspaper publication.
The Department has reviewed and considered the Newspaper Group's comment and has decided not to make any changes to the proposed rule. The following is a summary of the Newspaper Group's points and the Department's response to each one.
Civil judicial forfeitures have been governed, since December 1, 2006, by Rule G of the Supplemental Rule for Admiralty or Maritime Claims and Asset Forfeiture Actions, Federal Rule of Civil Procedure (“Supplemental Rule G”). Since its inception, Supplemental Rule G(4)(A)(iv)(C) has provided two alternative means of affording public notice of civil judicial forfeitures: (1) Publication once a week for three consecutive weeks in a newspaper of general circulation in the district in which the forfeiture action is filed or (2) posting notice of the forfeiture on an official government forfeiture Web site for at least 30 consecutive days. The official government Internet Web site for posting notices of civil judicial forfeitures,
In criminal forfeiture cases, post-conviction notices of forfeiture are published according to the provisions of Rule 32.2 of the Federal Rules of Criminal Procedure, in conjunction with section 853(n)(1) of title 21, United States Code. Rule 32.2 was amended effective December 1, 2009, to incorporate by reference the aforementioned notice provisions of Supplemental Rule G.
The statute governing notices of administrative forfeiture requires only that “notice of the seizure * * * and the intention to forfeit * * * be published for at least three consecutive weeks in such manner as the [Attorney General] may direct.” 19 U.S.C. 1607(a) (incorporated by reference and made applicable to the Attorney General in statutes such as 18 U.S.C. 981(d) and 21 U.S.C. 881(d)). The statute does not require a specific means of publication. The means historically selected by the Attorney General required that notices of administrative forfeiture be published “once a week for at least three successive weeks in a newspaper of general circulation in the judicial district in which the [proceeding] for forfeiture is brought.”
The Department believes that in the Internet era, continued adherence to newspaper noticing alone places a burden on persons desirous of receiving notice, including, but certainly not limited to: members of our Armed Forces serving in foreign lands; other persons residing in foreign countries; incarcerated persons or those confined long-term to health care facilities wherever located; or anyone with Internet access but far removed from outlets carrying up-to-date American newspapers of general circulation. By contrast, Internet publication will allow for continuous access to administrative forfeiture notices for at least 30 days on a Web site that may easily be found by, for example, using the term “United States forfeiture” on a search engine. Given the current state of technology, the Department believes that this practice is far more “reasonably calculated” to provide public notice of forfeiture proceedings to all interested persons, whatever their circumstances and wherever they might be located.
The Department, as noted, has had the option of publishing notice of civil judicial forfeitures through the Internet since Supplemental Rule G became effective in 2006. Supplemental Rule G was drafted by the Advisory Committee on Civil Rules (“Committee”), a group composed of federal and state judges, private and government attorneys, and law professors, that is responsible for considering and drafting amendments to the Federal Rules of Civil Procedure, including the Supplemental Rules.
The Committee began work on Supplemental Rule G in 2003.
Newspaper publication is not a particularly effective means of notice for most potential claimants. Its traditional use is best defended by want of affordable alternatives. Paragraph [(4)(a)](iv)(C) [of Supplemental Rule G] contemplates a government-created internet forfeiture site that would provide a single easily identified means of notice. Such a site would allow much more direct access to notice as to any specific property than publication provides.
Ultimately, the Committee's proposed version of Supplemental Rule G(4)(a)(iv) authorizing use of the Internet for publishing public notice of civil judicial forfeiture proceedings, and the Advisory Committee Note pertaining thereto, were embodied
In devising Supplemental Rule G, the Committee acknowledged that the Internet, by its nature, offers far greater access to forfeiture notices than newspapers. Once an Internet connection is established, every single user anywhere in the world, at any time of day, has the ability to access federal forfeiture notices online. The same cannot be said of notice published through a single newspaper, the reach of which is limited numerically to the amount of people who read a given edition and geographically by circulation limitations. Indeed, the statistic cited in the Newspaper Group's comment that nearly 100 million adults read a newspaper on an average
Supplemental Rule G was also drafted against the backdrop of a dramatic rise in Internet usage coinciding with a precipitous decline in newspaper circulation. Since 2003, these trends have only accelerated. The most recent and comprehensive analysis of Internet penetration is
As Internet use has expanded, the circulation of printed newspapers has continued to decline. According to
In addition to enhanced accessibility and reach, another factor in favor of publishing forfeiture notices through the Internet is cost. The Advisory Committee that drafted Supplemental Rule G advised in the note pertaining to subpart (4)(a) that, in choosing between newspapers and the Internet as the means for providing public notice, the Government “should choose * * * a method that is reasonably likely to reach potential claimants
Before addressing the substance of this particular comment, it is important to note two critical points to place the Department's response in the appropriate context. First, the public notice authorized by § 8.9(a) will be in addition to the personal written direct notice that must be provided, generally by mail, directly to every person known to the Government who appears to have an interest in the property to be forfeited.
For similar reasons, the Department does not believe that a traveling property stakeholder will be disadvantaged by this change in noticing practice. The accessibility of general circulation U.S. newspapers is quite limited outside the United States, whereas Internet access to the Federal Government's Internet forfeiture site is readily available in most parts of the world. If the Government is unaware of
The element referenced in the comment requiring that notice be published by an independent third party presumes that newspapers, being “independent of the government,” provide the public with “an extra layer
The comment suggests that records of Internet notices of federal forfeiture proceedings will be incomplete or inadequate, citing statistics about backlog and budget issues at the National Archives and Records Administration (“NARA”). The Department does not find this comment persuasive. As an initial matter, the statistics about NARA are irrelevant, as NARA is not charged with preserving forfeiture notices. Furthermore, all information concerning notices posted on
This rule complies with the requirement under Section 6 of Executive Order 13563 to modify and streamline outmoded and burdensome regulations. Specifically, in terms of updates, the rule recognizes that as of 2002 the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) became part of the Department, and consolidates the regulations governing the seizure and administrative forfeiture of property by ATF with those of DEA and the FBI. In terms of burden, the rule would add the option of publishing notices for administrative forfeitures on an official government Internet site instead of in a newspaper, potentially saving over $10,000 per day.
Further, this regulation has been drafted and reviewed in accordance with Executive Order 12866, section 1(b), Principles of Regulation. The Department 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 Department, not upon the general public. The benefits of this rule, however, are numerous. The rule increases the efficiency of forfeitures, requires that the agencies provide prompt due process and notice, requires that property be promptly returned to third parties if appropriate, eliminates the cost bond and its administrative burden, and requires more effective processing and handling of currency. Moreover, providing agencies with the option of publishing administrative forfeiture notices on the Government's dedicated forfeiture Web site will save the $10,000 to $12,000 a day agencies currently spend providing notice through newspapers. Such notice will be available through the Internet at no cost to the general public. For the reasons explained in its response to comments, the Department maintains the benefits of publishing notices on the newspapers in all circumstances, in addition to the Internet, do not justify the costs.
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.
This rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.
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.
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.
This rule is not a major rule as defined by section 251 of the Small Business Regulatory Enforcement 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 enterprises to compete with foreign-based enterprises in domestic and export markets.
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, Public Law 104-9, 44 U.S.C. 3518.
This final rule does not call for a “collection of information” that requires approval by OMB under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501
The particular exception that applies to information collected in connection with a forfeiture action depends on the type of forfeiture proceeding that is occurring. Information collected in connection with an administrative forfeiture would fall within the section 3518(c)(1)(B)(ii) exception for the collection of information during an “administrative action * * * involving an agency against specific individuals or entities.”