[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

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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

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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

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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