Consolidation of Seizure and Forfeiture Regulations, 26660-26678 [2011-9826]

Agencies

• Drug Enforcement Administration
• Department of Justice

[Federal Register Volume 76, Number 89 (Monday, May 9, 2011)]
[Proposed Rules]
[Pages 26660-26678]
From the Federal Register Online via the Government Printing 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 https://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 https://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 
https://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