Source: https://www.federalregister.gov/documents/2012/09/12/2012-21943/consolidation-of-seizure-and-forfeiture-regulations
Timestamp: 2017-11-24 16:58:26
Document Index: 489020589

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A Rule by the Drug Enforcement Administration on 09/12/2012
56093-56115 (23 pages)
Executive Order 12866 and Executive Order 13563—Regulatory Planning and Review
https://www.federalregister.gov/d/2012-21943 https://www.federalregister.gov/d/2012-21943
Beliue Risher, Editor, 1400 New York Avenue NW., Bond Building, Washington, DC 20530. Telephone: (202) 514-1263.
This rule complies with the requirement under Section 6 of Executive Order 13563 (Jan. 18, 2011) to modify and streamline outmoded and burdensome regulations. First, this final rule recognizes that the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) is now part of the Department of Justice. On November 25, 2002, the President signed into law the Homeland Security Act (HSA) of 2002, Public Law 107-296, 116 Stat. 2135. Section 1111 of the HSA established in the Department of Justice the “Bureau of Alcohol, Tobacco, Firearms, and Explosives” and generally transferred the law enforcement functions, and seizure and forfeiture authority, of the Bureau of Alcohol, Tobacco, and Firearms from the Department of the Treasury to the Department of Justice. This transfer became effective on January 24, 2003. By this rule, the Department consolidates its regulations governing the seizure and administrative forfeiture of property by ATF, DEA, and the FBI. Among other things, this rulemaking identifies the scope of these regulations, updates definitions, identifies the scope of authority available to each of those seizing agencies to seize property for forfeiture, and provides procedures governing practical issues regarding the seizure, custody, inventory, appraisal, settlement, and release of property subject to forfeiture. See §§ 8.1-8.7 of this rule.
Third, the rule updates the regulations to conform to other authorities and current forfeiture practice. Thus, § 8.14 adds a provision to the Department's regulations allowing for the pre-forfeiture disposition of seized property when the property is liable to perish, or to waste, or to be greatly reduced in value while being held for forfeiture, or when the expense of holding the property is or will be disproportionate to its value. Section 8.11 clarifies that administrative and criminal judicial forfeiture proceedings are not mutually exclusive, and § 8.16 affirms that the United States is not liable for attorney fees in any administrative forfeiture proceeding. Section 8.23 adds a provision defining the allowable redelegations of authority under the regulations. Section 8.9(a)(1) updates the forfeiture regulations by adding the option of publishing notice for administrative forfeitures on an official government Internet site instead of in a newspaper.
Consistent with Executive Order 13563, this rule is needed to ensure that the Department's seizure and forfeiture regulations accurately reflect the current composition of the Department, the current state of the law, and current practices and procedures relating to the seizure, forfeiture, and remission of assets. Specifically, the rule is necessary to recognize ATF as part of the Department and to bring clarity to the regulatory framework by consolidating the ATF, DEA, and FBI regulations governing the seizure and administrative forfeiture of property. The rule is also needed to conform the regulations with the changes to seizure and forfeiture law included in CAFRA, which has rendered many of the existing regulations obsolete. Finally, this rule is necessary to reflect current forfeiture practice and to clarify the existing regulations pertaining to victims and the remission process.
Notice of seizure. Section 983(a)(1) establishes deadlines and procedures for sending personal written notices of seizures to parties with a potential interest in the property. These deadlines and procedures are in addition to, and in some respects different from, the deadlines and procedures under the Customs laws. The forfeiture procedures under Customs laws (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 article.” 19 U.S.C. 1607(a). 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 rule incorporates these notice-related provisions of CAFRA.
Expedited release of property. Subpart B (§§ 8.17 through 8.22) incorporates and amends, to the extent required by CAFRA, the pre-existing regulations for expedited forfeiture proceedings for certain property. The pre-existing 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, §§ 8.17 through 8.22 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.
Pre-forfeiture disposition. The provision providing for the pre-forfeiture disposition of seized property, § 8.14, implements 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. 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 during its detention for forfeiture, or when the expense of keeping the property pending forfeiture is or will be disproportionate to the property's value. The rule enables the Department to use the authority of section 1612(b) in appropriate cases.
Internet publication. The rule updates the forfeiture regulations by adding, in § 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 official Internet government forfeiture site, currently www.forfeiture.gov, to publish notice of administrative forfeiture proceedings for no cost as an alternative to the newspaper publication provided for in § 8.9(a)(1)(i). This grant of authority to the agencies 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.
CAFRA also changed the procedure for filing administrative claims. Section 983(a)(2)(B) dictates that when the agency both publishes and sends notice of the seizure and its intent to forfeit the property, an owner who receives notice by mail has at least 35 days from the date of mailing, and if the personal notice is sent but not received, an owner has 30 days from the date of final publication of notice of the seizure, to file a claim with the agency. In addition, the notice provision in § 8.9(a)(1)(ii) was updated to allow the agencies to publish administrative forfeiture notices on the Internet instead of in newspapers, consistent with the procedure for civil judicial forfeitures under Rule G(4)(a)(iv)(C).
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 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.
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. See § 8.16.
In addition to implementing these CAFRA reforms, the new regulations authorize the destruction, sale, or other disposition of seized property prior to forfeiture whenever it appears that the property is liable to perish or to waste, or to be greatly reduced in value during its detention for forfeiture, or that the expense of keeping the property is or will be disproportionate to its value. See § 8.14. This disposition must be authorized by the appropriate official of the seizing agency. The regulations also specify that the seizing agency must promptly deposit any seized U.S. currency into the Seized Asset Deposit Fund pending forfeiture. See § 8.5. There is an exception for currency that must be retained because it has a significant, independent, tangible evidentiary purpose. See § 8.5(b).
The final rule also changes some of the procedures relating to crime victims in 28 CFR part 9. The definition of victim is modified to make remission available to qualified third parties who reimburse a victim pursuant to an insurance or other indemnification agreement. See § 9.2(w). In addition, § 9.8 is reorganized and a new paragraph (a) is added to specify the filing procedures applicable to persons seeking remission as 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.
The Department received two comments on the rule. One comment was a general statement of support for the rule. The other comment came from a group of four organizations representing numerous American newspapers (collectively, “Newspaper Group”). The Newspaper Group objected to § 8.9 (“Notice of administrative forfeiture”), which consolidates seizure and forfeiture regulations for ATF, DEA, and FBI. Specifically, the Newspaper Group objected to § 8.9(a)(1), which permits the seizing agency to provide public notice of an administrative forfeiture proceeding by publishing notice either on an official government Internet site for at least 30 consecutive days, or once a week for at least three successive weeks in a newspaper of general circulation in the judicial district where the property was seized. The Newspaper Group maintained that “any Internet notice is an inadequate substitute for a printed, fixed newspaper notice” and therefore opposed authorizing agencies to publish notice of administrative forfeiture proceedings on an official government forfeiture Web site as an alternative to traditional newspaper publication.
Response: The Newspaper Group's comment makes passing mention of the fact that for several years the Department has been using the Internet to afford public notice of “other forfeiture notices from other federal agencies.” This is, however, a point worthy of emphasis at the outset.
Civil judicial forfeitures have been governed, since December 1, 2006, by Rule G of the Supplemental Rule for Admiralty or Maritime Claims and Asset Forfeiture Actions, Federal Rule of Civil Procedure (“Supplemental Rule G”). Since its inception, Supplemental Rule G(4)(A)(iv)(C) has provided two alternative means of affording public notice of civil judicial forfeitures: (1) Publication once a week for three consecutive weeks in a newspaper of general circulation in the district in which the forfeiture action is filed or (2) posting notice of the forfeiture on an official government forfeiture Web site for at least 30 consecutive days. The official government Internet Web site for posting notices of civil judicial forfeitures, www.forfeiture.gov, became operational in December 2007.
In criminal forfeiture cases, post-conviction notices of forfeiture are published according to the provisions of Rule 32.2 of the Federal Rules of Criminal Procedure, in conjunction with section 853(n)(1) of title 21, United States Code. Rule 32.2 was amended effective December 1, 2009, to incorporate by reference the aforementioned notice provisions of Supplemental Rule G. See Fed. R. Crim. P. 32.2(b)(6)(C). Since then, criminal forfeiture notices also have been posted on www.forfeiture.gov, thereby providing free public access to notices of all judicial forfeitures, civil and criminal. The success of www.forfeiture.gov is confirmed by impressive levels of usage; from 2007 to July 2011, 72,007 individuals (based on unique IP addresses) visited the Web site, and the total number of visits was 158,086. For nearly five years, therefore, the Internet has served as an effective and cost-efficient means of providing public notice of thousands of federal civil and criminal judicial forfeiture proceedings.
Comment: The Newspaper Group's comment asserts that “[t]he point of public notice is to put information where people not necessarily looking for it are likely to find it.”
Response: The Supreme Court has held that, in providing public notice of administrative forfeiture proceedings, due process requires only that “the Government's effort be `reasonably calculated' to apprise a party of the pendency of the action.” Dusenbery v. United States, 534 U.S. 161, 170 (2002) (quoting Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 315 (1950)). Although Dusenbery involved direct notice of an administrative forfeiture, the same due process standard applies to published notice as well. See, e.g., United States v. Young, 421 Fed. Appx. 229, 231, 2011 WL 1206664 (3d Cir. Apr. 11, 2011).
The statute governing notices of administrative forfeiture requires only that “notice of the seizure * * * and the intention to forfeit * * * be published for at least three consecutive weeks in such manner as the [Attorney General] may direct.” 19 U.S.C. 1607(a) (incorporated by reference and made applicable to the Attorney General in statutes such as 18 U.S.C. 981(d) and 21 U.S.C. 881(d)). The statute does not require a specific means of publication. The means historically selected by the Attorney General required that notices of administrative forfeiture be published “once a week for at least three successive weeks in a newspaper of general circulation in the judicial district in which the [proceeding] for forfeiture is brought.” See, e.g., 21 CFR 1316.75(a). This was, throughout most of the 20th century, a standard “reasonably calculated” to provide notice to interested parties, notwithstanding the fact that many interested parties might be far removed from the district in question, perhaps even in a foreign nation, and without ready access to American newspapers of general circulation.
Comment: The Newspaper Group's comment assumes that notice of administrative forfeitures will be posted only on the Web site of the law enforcement agency that seized the subject property. Based on this assumption, the comment highlights the alleged deficiencies of using a seizing agency Web site for such purposes, and concludes that “[n]ewspapers are a better choice for public notice given their much broader reach.”
Response: The assumption that the Department will publish notices of administrative forfeiture proceedings on seizing agency Web sites is incorrect. The rule authorizes notice on “an official internet government forfeiture site,” which mirrors the language that authorizes Internet notice under Supplemental Rule G, discussed supra. As with existing judicial forfeiture notices, administrative forfeiture notices will be posted on www.forfeiture.gov, the “official internet government forfeiture site” that is dedicated to providing notice of federal forfeiture proceedings. Therefore, the comment's line of argument about the alleged superiority of newspapers over individual seizing agency Web sites is inapposite. Nonetheless, the Department believes the comparative advantages of the Internet as opposed to newspapers in providing public notice of forfeiture proceedings should be addressed more broadly.
The Department, as noted, has had the option of publishing notice of civil judicial forfeitures through the Internet since Supplemental Rule G became effective in 2006. Supplemental Rule G was drafted by the Advisory Committee on Civil Rules (“Committee”), a group composed of federal and state judges, private and government attorneys, and law professors, that is responsible for considering and drafting amendments to the Federal Rules of Civil Procedure, including the Supplemental Rules.[1]
The Committee began work on Supplemental Rule G in 2003.[2] Even then, the limitations of newspaper publication and the promise of Internet publication were readily apparent to the Committee. In the Advisory Committee Note to Rule G, the Committee observed:
Newspaper publication is not a particularly effective means of notice for most potential claimants. Its traditional use is best defended by want of affordable alternatives. Paragraph [(4)(a)](iv)(C) [of Supplemental Rule G] contemplates a government-created internet forfeiture site that would provide a single easily identified means of notice. Such a site would allow much more direct access to notice as to any specific property than publication provides.[3]
In devising Supplemental Rule G, the Committee acknowledged that the Internet, by its nature, offers far greater access to forfeiture notices than newspapers. Once an Internet connection is established, every single user anywhere in the world, at any time of day, has the ability to access federal forfeiture notices online. The same cannot be said of notice published through a single newspaper, the reach of which is limited numerically to the amount of people who read a given edition and geographically by circulation limitations. Indeed, the statistic cited in the Newspaper Group's comment that nearly 100 million adults read a newspaper on an average weekday is irrelevant for present purposes, as it reflects the total readership of all newspapers combined, which is not the equivalent of 100 million people having access to notices published through a single newspaper.
Supplemental Rule G was also drafted against the backdrop of a dramatic rise in Internet usage coinciding with a precipitous decline in newspaper circulation. Since 2003, these trends have only accelerated. The most recent and comprehensive analysis of Internet penetration is Digital Nation—Expanding Internet Usage, published by the U.S. Department of Commerce, National Telecommunications & Information Administration, in February 2011.[4] Statistics from this report show that “an estimated 209 million Americans—about 72% of all adults and children aged three years and older—use the internet somewhere, whether at home, the workplace, schools, libraries, or a neighbor's house.” Digital Nation at 28 (emphasis omitted). This represents an increase from 68.4% (197.9 million) in 2009. Id. at 17. Internet use through libraries is particularly important, as it provides the most widespread availability of free and regular Internet access to the general public. The American Library Association's Public Library Funds & Technology Access Study (2010-2011) reports that 99.3% of public libraries offer public access to computers and the Internet.[5] According to a study by the University of Washington, a third of Americans 14 and older, or about 77 million people, use public library computers.[6]
As Internet use has expanded, the circulation of printed newspapers has continued to decline. According to The State of the News Media 2011, a report issued by the Pew Research Center's Project for Excellence in Journalism, daily circulation of U.S. newspapers has declined 30% in the last 10 years, from 62.3 million in 1990 to 43.4 million in 2010.[7] This negative trend is reflected by national papers such as USA Today, which in just the past two years has seen its circulation decline by 460,000, and by big-city metro newspapers such as the Newark Star Ledger and the San Francisco Chronicle, each of which lost about a third of its daily circulation over the same period. Id. at 9.
In addition to enhanced accessibility and reach, another factor in favor of publishing forfeiture notices through the Internet is cost. The Advisory Committee that drafted Supplemental Rule G advised in the note pertaining to subpart (4)(a) that, in choosing between newspapers and the Internet as the means for providing public notice, the Government “should choose * * * a method that is reasonably likely to reach potential claimants at a cost reasonable in the circumstances.” Fed. R. Civ. P. Supp. R. G Advisory Committee's Note (2006) (emphasis added). Currently, according to the Department's Justice Management Division, the Department pays between $10,000 and $12,000 per day in noticing costs to newspapers. Alternatively, publishing those same notices on www.forfeiture.gov, a fully operational Web site, would be of little to no additional cost to the Government.
Before addressing the substance of this particular comment, it is important to note two critical points to place the Department's response in the appropriate context. First, the public notice authorized by § 8.9(a) will be in addition to the personal written direct notice that must be provided, generally by mail, directly to every person known to the Government who appears to have an interest in the property to be forfeited. See § 8.9(b); see also 19 U.S.C. 1607(a). Thus, the relevant category of people in the groups identified in the comment is limited only to those individuals who have an interest in the seized property unknown to the Government, or to those who have an interest known to the Government, but for whom the Government lacks accurate contact information. Only these individuals will have to rely on public notice. All other owners—those with known interests and contact information—will receive personal written notice of the forfeiture proceedings. Second, the proposed regulation affords the Government the option of using the Internet to provide public notice of administrative forfeiture proceedings. If the Government has reason to anticipate that Internet publication may not be effective in a given case, it retains the option of simultaneously publishing notice in a newspaper.
Comment: The comment identifies prisoners and frequent travelers as “key stakeholders” whose interests allegedly would not be served by Internet notice, instead of newspaper notice, of administrative forfeiture proceedings.
For similar reasons, the Department does not believe that a traveling property stakeholder will be disadvantaged by this change in noticing practice. The accessibility of general circulation U.S. newspapers is quite limited outside the United States, whereas Internet access to the Federal Government's Internet forfeiture site is readily available in most parts of the world. If the Government is unaware of a stakeholder's interest in property and thus does not provide personal written notice to the stakeholder, the most likely source for conveying news of the seizure to the stakeholder would be an associate of the stakeholder who knows of both the seizure and the stakeholder's ownership interest. After being alerted of the seizure, it should be easier for the traveling stakeholder to find Internet access than to find and purchase the correct daily issue of a particular U.S. newspaper.
Comment: The Newspaper Group's comment asserts that the “rights of a co-owner may not be clear to the seizing agency, and the malfeasance of the property holder may not be clear to minority owners, divorced spouses, unregistered lien holders and others who might not be reached by any personal notice.”
Response: All persons, including fractional property stakeholders, whose interest in seized property is known to the Government, are entitled to personal notice of administrative forfeiture proceedings. In those cases in which a fractional property stakeholder is not known to the Government, the Newspaper Group contends that those individuals are more likely to learn of the forfeiture proceedings through newspaper rather than Internet notice. But even if such a contention could be verified, the Government is not required to provide the most effective notice, only one “reasonably calculated” to apprise a party of the pendency of the action. See Dusenbery, 534 U.S. at 170.
Comment: Newspapers “may be written in Spanish or German or Swahili to address a specific non-English-speaking community.”
Response: Non-English newspapers are not newspapers of “general circulation” in the United States and thus cannot be used to publish forfeiture notices.
Comment: Statistics show that “many rural areas use dial-up connections because broadband is unavailable.”
Response: Dial-up, though it may be slower than other means of connectivity, still provides access to the Internet. Furthermore, the Digital Nation study cited previously notes that the “urban-rural gap in Internet use anywhere receded from 4.4 percentage points (69.3% versus 64.9%) in 2009, to 3.6 percentage points (72.4% versus 68.8%) in 2010.” See Digital Nation, supra n.4, at 17. There is reason to expect this trend to continue as rural areas lacking “meaningful internet service” should benefit from recent federal initiatives to expand broadband Internet access in rural areas, including over $3.5 billion in awards under the Broadband Initiatives Program (funded by the American Recovery and Reinvestment Act of 2009), as well as ongoing rural broadband loan programs administered by the U.S. Department of Agriculture's Rural Utilities Service.[8]
Comment: The Newspaper Group asserts that “[s]urvey after survey has shown that particular classes will be disenfranchised if notices are solely placed on internet sites because certain classes are less likely to have access to the internet.”
Response: With respect to minorities, senior citizens, the disabled, and the ill, the same general themes apply: The Internet offers greater accessibility to public administrative forfeiture notices than newspapers of general circulation for such individuals and their associates and thus increases the likelihood that affected individuals in these groups will be notified of a seizure in which they have an interest. While average use of the Internet by these groups may be lower than it is by other groups, it does not follow that they will be “disenfranchised” if administrative forfeiture notices are published only through the Internet, and the comment does not point to information that says otherwise. But even if the Newspaper Group's conclusions could be verified, that would not alter the fact that the Government is not required to provide the most effective notice, only one “reasonably calculated” to apprise a party of the pendency of the action. See Dusenbery, 534 U.S. at 170.
Comment: According to the Newspaper Group's comment, “libraries and community centers have limited budgets and can only purchase and maintain a limited number of computers,” and some even have “long lines and limited hours of operation.”
Comment: The Newspaper Group's comment claims that government Internet posting of notice does not comport with a “long tradition” that public notice must include four elements: the notice must be published by an independent third party, the publication must be capable of being archived at a reasonable cost, the notice must be accessible, and the notice must be verifiable.
The element referenced in the comment requiring that notice be published by an independent third party presumes that newspapers, being “independent of the government,” provide the public with “an extra layer of confidence in the notice” than if the government published them itself. But this argument mistakes why newspapers were used in the past and the role they serve in the notice process. Newspapers were historically used to provide public notice because, until the Internet, there was no comparable alternative method that was “reasonably calculated” to apprise a party of the pendency of the forfeiture action. It had nothing to do with their status as an “independent and neutral third party.” In fact, for these purposes, there is nothing inherently beneficial about newspapers being independent from the Government given that they merely act as a vehicle for publishing notices prepared and provided by the seizing agencies.
The comment suggests that records of Internet notices of federal forfeiture proceedings will be incomplete or inadequate, citing statistics about backlog and budget issues at the National Archives and Records Administration (“NARA”). The Department does not find this comment persuasive. As an initial matter, the statistics about NARA are irrelevant, as NARA is not charged with preserving forfeiture notices. Furthermore, all information concerning notices posted on www.forfeiture.gov is carefully maintained and archived, enabling the Government to provide appropriate verification of such information to courts as necessary. This verification, in the form of an affidavit to the court verifying the public notice that was given, has proven satisfactory to courts. The Department believes that this method for noticing judicial forfeitures will work as well with respect to public notices of administrative forfeitures posted on the same government Web site. Further, the process of providing legal verification of Internet notice is dramatically streamlined when it is the Government that can retrieve the required data from its own Web site, as opposed to seeking such verification from newspapers. Finally, the Department notes that this regulatory change should correspondingly decrease the burden on newspapers of having to provide such information.
Comment: The Newspaper Group's comment challenges the Department to support its contention that “internet sites are more cost effective and reach more people.”
Response: The Department believes it has demonstrated above how providing public notice through the Internet can—and indeed already does—reach more people, more easily, and more directly, than newspaper notice. Meanwhile, the cost savings of Internet notice are significant. As noted, the Department currently pays approximately $10,000-$12,000 a day, or between $3.5 and $4.5 million a year, in noticing costs to newspapers. On the other hand, there is very little cost to the Government in adding public notices of administrative forfeiture proceedings to www.forfeiture.gov, an existing and fully operational Web site. Thus, the cost savings to the Government will be what the Department currently pays for publication of such forfeiture notices through newspapers.
This final rule does not call for a “collection of information” that requires approval by OMB under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., because any information collected in connection with forfeiture proceedings would fall within the exceptions to the PRA listed in 44 U.S.C. 3518(c) and 5 CFR 1320.4.
If a claim is properly filed in the administrative forfeiture, federal prosecutors must file a civil forfeiture complaint against the property, include it in a criminal indictment within the deadlines laid out by CAFRA, or return the property. Information collected in connection with a civil forfeiture would fall under the section 3518(c)(1)(B)(ii) exception for collection of information during “a civil action to which the United States * * * is a party.” Alternatively, if the prosecutors include the property in a criminal indictment, any collection of information 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, because a claim or petition filed in forfeiture proceedings would fall within one of the exceptions to the PRA, the final rule does not call for a collection of information under that statute and accordingly does not require the prior approval of OMB.
Accordingly, for the reasons set forth in the preamble, under the authority of 5 U.S.C. 301, Chapter II of Title 21 and Chapter I of Title 28 of the Code of Federal Regulations are amended as follows:
1. Remove 2l CFR part 1316, subparts E and F.
2. Revise part 8 to read as follows:
Return of property pursuant to 18 U.S.C. 983(a)(3)(B).
Posting of substitute monetary amount in an administrative forfeiture.
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 §§ 8.9(a)(2), 8.9(b)(2), 8.10, and 8.15, where the term appropriate official means the office or official identified in the published notice or personal written notice in accordance with § 8.9.
(b) Turnover of assets seized by state and local agencies.
(c) Seized currency has a significant independent, tangible evidentiary purpose as those terms are used in § 8.5(b)(1) and (b)(2) 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.
An administrative forfeiture proceeding begins when notice is first published in accordance with § 8.9(a), or the first personal written notice is sent in accordance with § 8.9(b), whichever occurs first.
(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 § 8.9(b) 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).
(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 the regulations in this part must file a claim with the appropriate official, after the commencement of the administrative forfeiture proceeding as defined in § 8.8, and not later than the deadline set forth in a personal notice letter sent pursuant to § 8.9(b). 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.
(d) Cost bond not required. Any person may file a claim under § 8.10(a) 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 §§ 8.10(a) and (b), 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 proceedings. 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 § 8.8, 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 § 8.10(b), 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 § 8.10(b), 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 § 8.10(b) 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.
(b) The seizing agency shall commence forfeiture proceedings, regardless of the disposition of the property under § 8.14(a). A person with an interest in the property that was destroyed or otherwise disposed of under § 8.14(a) 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 § 8.14(a). The destruction or other disposition of the property pursuant to this section does not impair in rem jurisdiction.
(b) Any person filing a request for hardship release must also file a claim to the seized property pursuant to § 8.10 and as defined in 18 U.S.C. 983(a).
(c) The timely filing of a valid claim pursuant to § 8.10 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.
(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 § 8.2(c) or the date the claim was deemed filed under § 8.10(f). 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.
(b) Where property described in § 8.19(a) 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 § 8.19(a), and the provisions of § 8.19(a) and other provisions in this section pertaining to a petition for expedited release shall apply as if the vessel had been physically seized.
(d) In addition to those factors listed in § 8.19(c), 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.
(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 § 8.19(a).
(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 § 8.19(c) and:
At the time of seizure of property defined in § 8.18 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.
(a) Redelegation of authority permitted.
(1) The powers and responsibilities delegated to the DEA Forfeiture Counsel by the regulations in this part may be redelegated to attorneys working under the direct supervision of the DEA Forfeiture Counsel.
(b) Redelegation 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 § 8.14 may not be redelegated.
(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 §§ 8.9(c)(7) and (8) and 18 U.S.C. 983(a)(1)(B) and (C) may not be redelegated.
(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.
Related crime as used in this section and § 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.
Ruling official means any official to whom decision-making authority has been delegated pursuant to § 9.1(b).
(b) Persons who may file.
(1) A petition for remission or mitigation must be filed by a petitioner as defined in § 9.2 or as prescribed in § 9.9(g) and (h). 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:
(c) Contents of petition.
(1) All petitions must include the following information in clear and concise terms:
(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 § 9.9(g).
(j) Request for reconsideration.
(1) A request for reconsideration of the denial of the petition shall be considered if:
(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:
(b) Persons who may file. A petition for remission or mitigation must be filed by a petitioner as defined in § 9.2 or as prescribed in § 9.9(g) and (h).
(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 § 9.9(g); and shall be submitted to the U.S. Attorney for the district in which the judicial forfeiture proceedings are brought.
(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 § 9.3.
(k) Request for reconsideration.
(1) A request for reconsideration of the denial shall be considered if:
(l) Restoration of proceeds from sale.
(a) Remission.
(b) Mitigation.
(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 § 9.5.
(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 § 9.5.
(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 § 9.2, 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 § 9.5.
(f) Judgment creditors.
(a) Owners.
(b) Lienholders.
(ii) Sale of property and payment to lienholder. Subject to § 9.9(a), 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.
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 §§ 9.3, 9.4, and 9.7. 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.
(1) Where to file. Persons seeking remission as victims shall file petitions for remission with the appropriate deciding official as described in §§ 9.3(e) (administrative forfeiture) or 9.4(e) (judicial forfeiture).
(2) Time of decision. The deciding official or his designee as described in § 9.1(b) 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 §§ 9.3(j) (administrative forfeiture) or 9.4(k) (judicial forfeiture).
(b) Qualification to file. A victim, as defined in § 9.2, may be granted remission, if in addition to complying with the other applicable provisions of § 9.8, the victim satisfactorily demonstrates that:
(4) Victims not constituting owners or lienholders (pursuant to § 9.8).
(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 §§ 9.3 through 9.5. The decision to make such transfer shall be made in writing by the ruling official.
(g) Filing by attorneys.
(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” within the meaning of § 9.2, 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 § 9.2, 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.
1. The Rules Enabling Act, 28 U.S.C. 2071-2077, authorizes the Supreme Court to prescribe general rules of practice and procedure for the federal courts. Under the Act, the Judicial Conference, a body of federal judges convened by the Chief Justice of the United States pursuant to 28 U.S.C. 331, must appoint a Standing Committee and may appoint advisory committees to recommend new and amended procedural rules. See 28 U.S.C. 2073(b). The Advisory Committees currently appointed consist of the Advisory Committees on the Rules of Appellate, Bankruptcy, Civil Procedure, Criminal Procedure, and Evidence. New and amended procedural rules recommended by the Advisory Committees are submitted through the Standing Committee to the United States Supreme Court and then from the Court to the Congress. See 28 U.S.C. 2074(a). If the Congress does not act on the proposed procedural rules, they become effective on December 1 of the year in which they were submitted. Id.
2. See Report of Civil Rules Advisory Committee, 3 (Dec. 16, 2003), available at http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/Reports/CV12-2003.pdf.
3. See Report of Civil Rules Advisory Committee, 92 (May 17, 2004), available at http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/Reports/CV5-2004.pdf; see also Fed. R. Civ. P. Supp. R. G Advisory Committe's Note.
4. U.S. Department of Commerce, Digital Nation—Expanding Internet Usage (Digital Nation), available at http://www.ntia.doc.gov/files/ntia/publications/ntia_internet_use_report_february_2011.pdf.
5. John Carlo Bertot, et al., Libraries Connect Communities: Public Library Funding & Technology Access Study 2010-2011 (Libraries Connect Communities), at 3, available at http://viewer.zmags.com/publication/857ea9fd.
6. Samantha Becker, et al., Opportunity for All: How the American Public Benefits from Internet Access at U.S. Libraries (Opportunity for All), at 32, available at http://impact.ischool.washington.edu/documents/OPP4ALL_FinalReport.pdf.
7. Pew Research Center, The State of the News Media 2011, at 8, available at http://stateofthemedia.org/2011/newspapers-essay/data-page-6.
8. See Rural Utilities Service, Satellite Awards, Broadband Initiatives Program, available at http://www.rurdev.usda.gov/Publications/BIPSatelliteFactSheet10-20-10.pdf.
[FR Doc. 2012-21943 Filed 9-11-12; 8:45 am]
BILLING CODE 4410-09- 4410-02; 4410-FY; 4410-14; P