Inspection Service Authority; Seizure and Forfeiture, 11437-11452 [2012-4396]

Agencies

• Postal Service

[Federal Register Volume 77, Number 38 (Monday, February 27, 2012)]
[Proposed Rules]
[Pages 11437-11452]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-4396]


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POSTAL SERVICE

39 CFR Part 233


Inspection Service Authority; Seizure and Forfeiture

AGENCY: Postal Service\TM\.

ACTION: Proposed rule.

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SUMMARY: The Postal Service proposes to revise its regulations with 
regard to forfeiture authority and proceedings. These new provisions 
would implement specific requirements in compliance with the Civil 
Asset Forfeiture Reform Act (CAFRA) of 2000.

DATES: Submit comments on or before March 28, 2012.

ADDRESSES: Mail or deliver written comments to the Postal Inspection 
Service, Room 3128, 475 L'Enfant Plaza SW., Washington, DC 20260-2100. 
Written comments may be inspected and photocopied (by appointment only) 
at the USPS Headquarters Library, 475 L'Enfant Plaza SW., 11th Floor 
North, Washington, DC, between 9 a.m. and 4 p.m., Monday through 
Friday. Please call 202-268-2906 to make an appointment. Email 
comments, containing the name and address of the commenter, may be sent 
to: REMattes@uspis.gov with a subject line of ``CAFRA comments.'' Faxed 
comments are not accepted.

FOR FURTHER INFORMATION CONTACT:
    R. Emmett Mattes III, Chief Counsel, U.S. Postal Inspection 
Service, 202-268-7732.

SUPPLEMENTARY INFORMATION:

I. Overview

    First, this rulemaking consolidates the Postal Service's rules and 
regulations regarding the seizure and forfeiture of property into three 
sections, 39 CFR 233.7, 233.8, and 233.9 from the previous four 
sections, 39 CFR 233.7, 233.8, 233.9, and 233.10. The proposed revision 
consolidates sections 233.8 and 233.9, and treats seizures involving 
personal use quantities of controlled substances and the expedited 
release of conveyances being forfeited for a drug-related offense in 
the same manner. It also incorporates prior section 233.10, Special 
Notice Provisions, into new paragraph 233.8(f). The new rules also 
create a new section 233.9 that addresses regulations governing 
remission or mitigation of administrative, civil, and criminal 
forfeitures, and incorporates the rules and regulations previously 
contained in paragraph 233.7(j).
    Second, this rulemaking identifies the scope of authority available 
to the Postal Service to seize property for forfeiture, updates 
definitions, and provides procedures governing practical issues 
regarding the seizure, custody, inventory, appraisal, settlement, and 
release of property subject to forfeiture. See proposed paragraphs 
233.7(a)-(g).
    Third, the rule proposes conforming the seizure and forfeiture 
regulations of the Postal Service to address procedural changes 
necessitated by CAFRA. 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.
    Fourth, the rule proposes updating the regulations to conform with 
other authorities and current forfeiture practice. Thus, proposed 
paragraph 233.7(n) adds a provision to the 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. Paragraph 233.7(l) 
clarifies that administrative and criminal judicial forfeiture 
proceedings are not mutually exclusive, and paragraph 233.7(r) affirms 
that the Postal Service is not liable for attorney fees in any 
administrative forfeiture proceeding. Paragraph 233.7(j)(1)(i)(B) 
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.
    Fifth, the proposed rule amends the designated official provision 
at paragraph 233.9(a)(2)(A) 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

    The proposed rule supersedes prior sections 233.7, 233.8, 233.9, 
and 233.10 and replaces them with new sections 233.7, 233.8, and 233.9. 
Section 233.7 contains generally applicable provisions for seizures and 
forfeitures by the Postal Service. Section 233.8 contains expedited 
procedures for property seized by the Postal Service for violations 
involving personal use quantities of a controlled substance, including 
conveyances. Section 233.9 replaces the prior paragraph 233.7(j), and 
more clearly defines the rules relevant to remission and mitigation of 
forfeitures.

B. CAFRA Procedural Changes Incorporated in the Proposed Rule

    Section 2 of CAFRA enacted 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,

[[Page 11438]]

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 
concerning forfeiture procedures (19 U.S.C. 1602-1618), which are 
incorporated by reference ``insofar as applicable'' in forfeiture 
statutes enforced by the Postal Service, 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. Paragraph 233.7(j) 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 statute, which was previously applicable 
to claims in Postal Service 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. Paragraph 233.7(k) of the 
proposed rule incorporates these section 983(a)(2) changes to the claim 
procedures.
    Release of seized property if forfeiture is not commenced. 
Paragraph 233.7(p) 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. Paragraph 233.7(m) 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. Section 233.8 of the proposed rule 
incorporates and amends, to the extent required by CAFRA, the pre-
existing regulations for expedited forfeiture proceedings for certain 
property. The prior regulations, 39 CFR 233.9, 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, section 233.8 omits 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 39 CFR 233.9.
    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. sec. 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).

C. Changes to the Previous Regulations Governing the Seizure and 
Forfeiture of Property by the Postal Service

    Pre-forfeiture disposition. The provision providing for the pre-
forfeiture disposition of seized property, paragraph 233.7(n), is 
needed to implement the authority of 19 U.S.C. 1612(b), one of the 
procedural Customs statutes incorporated by reference into the 
forfeiture statutes enforced by the Postal Service. 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 Postal Service to use the 
authority of section 1612(b) in appropriate cases.
    Internet publication. The proposed rule updates the forfeiture 
regulations by adding, at paragraph 233.7(j)(1)(i)(B), a provision for 
the publication of administrative forfeiture notices on the Internet 
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. Paragraph 
233.7(j)(1)(i)(B) will provide the Postal Service with the choice to 
use the Internet as a more effective and less costly alternative to the 
newspaper publication provided for in paragraph 233.7(j)(1)(i)(A).
    This grant of authority parallels a similar one 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 233.7(j)(1)(i)(B) will permit the Postal Service 
likewise to use the

[[Page 11439]]

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 a 
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 39 CFR 233.9 Governing the Remission or Mitigation of 
Forfeitures

    This proposed rule includes modifications to the regulations 
governing the remission or mitigation of forfeiture at 39 CFR 233.9. 
Paragraph 233.9(2)(A), (B) identifies the Chief Counsel of the Postal 
Inspection Service, or attorneys or managers working under that 
person's supervision, as the pertinent designated official to whom 
authority to grant remission and mitigation has been delegated.
    Second, the definition of ``victim'' in paragraph 233.9(b) is 
modified to make remission available to qualified third parties who 
reimburse a victim pursuant to an indemnification agreement. In 
addition, paragraph 233.9(h) 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 to file a claim with the 
agency. In addition, the notice provision in paragraph 
233.7(j)(1)(i)(B) 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 requirement to give the property owner greater access to Federal 
court. However, to prevent frivolous claims, CAFRA requires the 
claimant to state the basis for that person's 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 Admiralty or 
Maritime Claims and Asset Forfeiture Actions, 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 property 
for 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 Postal Service 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 Postal Service 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 Hold Account--Seizure and Forfeiture under the control of the 
Postal Inspection Service pending forfeiture. The only exception is for 
currency that must be retained because it has a significant, 
independent, tangible evidentiary purpose.
    The new rule changes some of the procedures relating to crime 
victims. 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 paragraph 
233.9(b)(23). In addition, paragraph 233.9(h) is reorganized and a new 
paragraph (h)(1) 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 paragraph 233.7(j) 
are applicable to owners and lienholders, but not to victims. Paragraph 
233.9(h)(9) 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. Also, 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.

[[Page 11440]]

List of Subjects in 39 CFR Part 233

    Administrative practice and procedure, Crime, Law enforcement, 
Penalties, Privacy.

    Accordingly, for the reasons stated, the Postal Service proposes to 
amend 39 CFR Part 233 as follows:

PART 233--INSPECTION SERVICE AUTHORITY

    1. The authority citation for 39 CFR Part 233 is revised to read as 
follows:

    Authority: 39 U.S.C. 101, 102, 202, 204, 401, 402, 403, 404, 
406, 410, 411, 1003, 3005(e)(1); 12 U.S.C. 3401-3422; 18 U.S.C. 981, 
983, 1956, 1957, 2254, 3061; 21 U.S.C. 881; Omnibus Budget 
Reconciliation Act of 1996, sec. 662 (Pub. L. 104-208).

    2. Section 233.7 is revised to read as follows:


Sec.  233.7  Forfeiture authority and procedures.

    (a) Scope of Regulations.
    (1) These regulations apply to all forfeitures administered by the 
United States Postal Service with the exception of seizures and 
forfeitures under the statutes listed in 18 U.S.C. 983(i). The 
authority 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.
    (2) These regulations will apply to all forfeiture actions 
commenced on or after [EFFECTIVE DATE].
    (b) Designation of officials having administrative forfeiture 
authority--
    (1) Administrative forfeiture authority. The Chief Postal Inspector 
is authorized to conduct administrative forfeitures under the statutes 
identified in paragraph (2) of this section, following, where 
applicable, the procedures provided by the customs laws of the United 
States (19 U.S.C. 1602-1618) and to pay valid liens and mortgages 
against property that has been so forfeited.
    (2) Authority of the Chief Postal Inspector. The Chief Postal 
Inspector is authorized to perform all duties and responsibilities 
necessary on behalf of the Postal Service and the Office of Inspector 
General to enforce 18 U.S.C. 981, 983, 2254; 21 U.S.C. 863(c), 881; and 
31 U.S.C. 5317; following, where applicable, the procedures provided by 
the Customs laws of the United States (19 U.S.C. 1602-1618), and to pay 
valid liens and mortgages against property that has been so forfeited. 
The Chief Postal Inspector is authorized to delegate all or any part of 
this authority to Deputy Chief Inspectors, Inspectors in Charge, and 
Inspectors of the Postal Inspection Service, and to issue such 
instructions as may be necessary to carry out this authority.
    (3) State adoption. The seizure of property by a state or local law 
enforcement agency or other entity or individual may be adopted for 
forfeiture by the Postal Inspection Service, as appropriate under its 
seizure authority pursuant to subparagraphs (1) and (2).
    (c) Definitions. As used in this section, the following terms shall 
have the meanings specified:
    (1) Administrative forfeiture means the process by which property 
may be forfeited by the Postal Inspection Service rather than through 
judicial proceedings. Administrative forfeiture has the same meaning as 
nonjudicial forfeiture, as that term is used in 18 U.S.C. 983.
    (2) 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 between a willing seller and a willing buyer.
    (3) Appropriate official means the Chief Postal Inspector or that 
person's designee, or where the term ``appropriate official'' means the 
office or official identified in the notice published or personal 
written notice in accordance with 233.7(j).
    (4) Contraband means:
    (i) 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
    (ii) Any controlled substance imported into the United States, or 
exported out of the United States, in violation of law.
    (5) Civil forfeiture proceeding means a civil judicial forfeiture 
action as that term is used in 18 U.S.C. 983.
    (6) Domestic value means the same as the term appraised value as 
defined in paragraph 233.7(c)(2).
    (7) Expense means all costs incurred to detain, inventory, 
safeguard, maintain, advertise, sell, or dispose of property under 
seizure, detained, or forfeited pursuant to any law.
    (8) File or filed has the following meanings:
    (i) 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 paragraph 233.7(i). A claim is not 
considered filed if it is received by any other office or official. In 
addition, a claim in an administrative forfeiture proceeding is not 
considered filed if received only by an electronic or facsimile 
transmission.
    (ii) 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 
official, even if the claim is received from an incarcerated pro se 
prisoner.
    (9) Interested party means any person who reasonably appears to 
have an interest in the property, based on the facts known to the 
Postal Inspection Service before a declaration of forfeiture is 
entered.
    (10) Judicial forfeiture means either a civil or a criminal 
proceeding in a United States District Court that may result in a final 
judgment and order of forfeiture.
    (11) Mail includes regular or certified U.S. mail, and mail and 
package transportation and delivery services provided by other private 
or commercial interstate carriers.
    (12) Nonjudicial forfeiture has the same meaning as administrative 
forfeiture. See paragraph 233.7(b)(1).
    (13) Person means an individual, partnership, corporation, joint 
business enterprise, estate, or other legal entity capable of owning 
property.
    (14) Property subject to administrative forfeiture means any 
personal property of the kinds described in 19 U.S.C. 1607(a)(1)(4).
    (15) 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.
    (d) Seizing property subject to forfeiture--(1) Authority to seize 
property. Postal Inspectors may seize assets under any Federal statute 
over which the Postal Inspection Service has investigative or 
forfeiture jurisdiction.
    (2) Turnover of assets seized by state and local agencies.
    (i) Property that is seized by a state or local law enforcement 
agency and transferred to the Postal Inspection Service for 
administrative or civil forfeiture may be adopted for administrative 
forfeiture without the issuance of any Federal seizure warrant or other 
Federal judicial process.
    (ii) 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 the Postal Inspection Service of the 
impending release of such property, the Postal Inspection Service may 
seek and obtain a Federal seizure warrant in

[[Page 11441]]

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.
    (e) Inventory. The Postal Inspection Service shall prepare an 
inventory of any seized property.
    (f) Custody.
    (1) All property seized by Postal Inspectors for forfeiture shall 
be delivered to the custody of the U.S. Marshals Service, or custodian 
approved by the U.S. Marshals Service, as soon as possible after 
seizure, unless it is retained as evidence.
    (2) Seized U.S. currency (and to the extent practicable seized 
foreign currency and negotiable instruments) must be deposited promptly 
in the Holding Account--Seizure and Forfeiture under the control of the 
Postal Inspection Service pending forfeiture. Provisional exceptions to 
this requirement may be granted as follows:
    (i) If the seized currency has a value less than $5,000, and a 
supervisory official within the 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
    (ii) The seized currency has a value greater than $5,000, and the 
Chief, Asset Forfeiture Money Laundering Section (AFMLS) 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.
    (3) Seized currency has a significant independent, evidentiary 
purpose as those terms are used in 2(i) and 2(ii) of this paragraph 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.
    (g) Appraisal. The Postal Inspection Service shall determine the 
domestic value of the seized property as soon as practicable following 
seizure.
    (h) Release before claim.
    (1) After seizure for forfeiture and prior to the filing of any 
claim, the appropriate official is authorized to release property 
seized for forfeiture provided:
    (i) 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 who 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
    (ii) The appropriate official 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.
    (2) Further, at any time after seizure and before any claim is 
filed, such seized property may be released if the appropriate official 
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.
    (i) Commencing an Administrative Forfeiture. An administrative 
forfeiture proceeding begins when notice is first published in 
accordance with paragraph 233.7(i)(1), or the first personal written 
notice is sent in accordance with paragraph 233.7(i)(2), whichever 
occurs first.
    (j) Notice of administrative forfeiture--(1) Notice by publication.
    (i) After seizing property subject to administrative forfeiture, 
the Appropriate Official 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:
    (A) 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
    (B) Posting a notice on an official Government Internet site for at 
least 30 consecutive days.
    (ii) The published notice shall:
    (A) Describe the seized property;
    (B) State the date, statutory basis, and place of seizure;
    (C) 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
    (D) State the identity of the appropriate official of the Postal 
Inspection Service and address where the claim must be filed.
    (2) Personal written notice--(i) Manner of providing notice. After 
seizing property subject to administrative forfeiture, the Postal 
Inspection Service, 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.
    (ii) Content of personal written notice. The personal written 
notice sent by the Postal Inspection Service shall:
    (A) State the date when the personal written notice is sent;
    (B) State the deadline for filing a claim, at least 35 days after 
the personal written notice is sent;
    (C) State the date, statutory basis, and place of seizure;
    (D) State the identity of the appropriate official of the Postal 
Inspection Service and the address where the claim must be filed; and
    (E) Describe the seized property.
    (3) Timing of notice--(i) Date of personal notice. Personal written 
notice is sent on the date when the Postal Inspection Service causes it 
to be placed in the mail, or otherwise sent by means reasonably 
calculated to reach the interested party. The personal written notice 
required by 233.7(i)(2) 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 the Postal Inspection Service for the 
purpose of forfeiture under Federal law).
    (ii) 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 this paragraph.
    (iii) Criminal indictment. If, before the time period for sending 
notice under this paragraph 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:
    (A) Send timely personal written notice and continue the 
administrative forfeiture proceeding; or
    (B) 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 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

[[Page 11442]]

from whom the property is seized within the time period for providing 
notice under paragraph 3(i), then any administrative forfeiture 
proceeding against the property may commence if:
    (i) The property is subsequently seized or restrained by the Postal 
Inspection Service pursuant to a Federal seizure warrant or restraining 
order and the Postal Inspection Service sends notice as soon as 
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 the Postal 
Inspection Service, 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 3(i).
    (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 3(i). 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 the Postal Inspection Service 
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 Postal Inspection Service shall send written notice 
to such interested party under paragraph 3(i) 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 Chief Counsel for the Postal 
Inspection Service 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), (D)), if the Chief Counsel 
for the Postal Inspection Service 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 Chief Counsel for the Postal Inspection 
Service 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 18 U.S.C. 983(a)(1)(D) are present.
    (k) Claims--(1) 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 paragraph 233.7(h), and not later than the 
deadline set forth in a personal notice letter sent pursuant to 
paragraph 233.7(i)(2). 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.
    (2) Contents of claim. A claim shall:
    (i) Identify the specific property being claimed;
    (ii) Identify the claimant and state the claimant's interest in the 
property; and
    (iii) Be made under oath by the claimant, not counsel for the 
claimant, and recite that it is made under the penalty of perjury, 
consistent with the requirements of 28 U.S.C. 1746. An acknowledgement, 
attestation, or certification by a notary public alone is insufficient.
    (3) Availability of claim forms. The claim need not be made in any 
particular form. However, the Postal Inspection Service will 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.
    (4) Cost bond not required. Any person may file a claim under 
paragraph 233.7(k)(1) without posting bond, except in forfeitures under 
statutes listed in 18 U.S.C. 983(i).
    (5) Referral of claim. Upon receipt of a claim that meets the 
requirements of paragraphs (1) and (2), the Postal Inspection Service 
shall return the property or 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 Postal 
Inspection Service 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 Postal Inspection Service 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 and/or to take other 
steps to verify the identity of the person who seeks the release of 
property, or both.
    (6) Premature filing. If a claim is filed with the appropriate 
official after the seizure of the property, but before the commencement 
of the administrative forfeiture proceeding as defined in paragraph 
233.7(i), 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 paragraph (k)(2), the Postal Inspection 
Service 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.
    (7) Defective claims. If the Postal Inspection Service determines 
that an otherwise timely claim does not meet the requirements of 
paragraph (k)(2), the Postal Inspection Service 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 Postal 
Inspection Service, the requirements of paragraph (k)(2) 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.
    (l) Interplay of administrative and criminal judicial forfeiture 
proceedings. An administrative forfeiture proceeding pending against 
seized or restrained property does not bar the Government

[[Page 11443]]

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.
    (m) Requests for hardship release of seized property.
    (1) Under certain circumstances, a claimant may be entitled to 
immediate release of seized property on the basis of hardship.
    (2) Any person filing a request for hardship release must also file 
a claim to the seized property pursuant to paragraph 233.7(k) and as 
defined in 18 U.S.C. 983(a).
    (3) The timely filing of a valid claim pursuant to paragraph 
233.7(k) does not entitle the claimant to possession of the seized 
property, but a claimant may request immediate release of the property 
while forfeiture is pending, based on hardship.
    (4) A claimant seeking 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:
    (i) The claimant has a possessory interest in the property;
    (ii) The claimant has sufficient ties to the community to provide 
assurance that the property will be available at the time of trial;
    (iii) 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;
    (iv) 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
    (v) The property is not:
    (A) Contraband, any property, the possession of which by the 
claimant, petitioner, or 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;
    (B) Intended to be used as evidence of a violation of law;
    (C) By reason of design or other characteristic, particularly 
suited for use in illegal activities; or
    (D) Likely to be used to commit additional criminal acts if 
returned to the claimant.
    (5) A hardship release request pursuant to this paragraph shall be 
deemed to have been made on the date when it is received by the 
appropriate official as defined in paragraph 233.7(c)(3), or the date 
the claim was deemed filed under paragraph 233.7(k). If the request is 
ruled on and denied by the appropriate official or the property has not 
been released within the 15-day time limit 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 appropriate official 
to whom the hardship petition was originally submitted and to the U.S. 
Attorney in the judicial district where the judicial petition was 
filed.
    (6) If a civil forfeiture complaint is filed on property and the 
claimant files a claim with the court pursuant to 18 U.S.C. 
983(a)(4)(A) and Rule G(5) of the Supplemental Rules for Certain 
Admiralty and Maritime Claims, a hardship petition may be submitted to 
the individual identified in the public or personal notice of the civil 
forfeiture action.
    (n) Disposition of property before forfeiture.
    (1) Whenever it appears to the Postal Inspection Service 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 Chief Counsel for the Postal Inspection Service 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 Postal Inspection 
Service to be held subject to forfeiture proceedings in place of the 
seized property to be released. Upon approval by the Chief Counsel for 
the Postal Inspection Service, the property will be released to the 
owner upon the payment of an amount equal to the Government appraised 
value of the property if the property is not evidence of a violation of 
law, 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 Postal Inspection 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 Postal Inspection 
Service will forfeit the substitute amount in lieu of the property. The 
pre-forfeiture destruction, sale, or other disposition of seized 
property pursuant to this subsection shall not extinguish any person's 
rights to the value of the property under applicable law. The authority 
vested in the Chief Counsel for the Postal Inspection Service under 
this subsection may not be delegated.
    (2) The Postal Inspection Service shall commence forfeiture 
proceedings, regardless of the disposition of the property under this 
paragraph. A person with an interest in the property that was destroyed 
or otherwise disposed of under this paragraph may file a claim to 
contest the forfeiture of the property or a petition for remission or 
mitigation of the forfeiture. No employee of the Postal Inspection 
Service shall be liable for the destruction or other disposition of 
property made pursuant to this paragraph. The destruction or other 
disposition of the property does not impair in rem jurisdiction.
    (o) Declaration of administrative forfeiture. If the Postal 
Inspection Service commences a timely proceeding against property 
subject to administrative forfeiture, and no valid and timely claim is 
filed, the appropriate official 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.
    (p) Return of property.
    (1) If, under 18 U.S.C. 983(a)(3), the Postal Inspection Service is 
notified by the U.S. Attorney in charge of the matter that the 90-day 
deadline was not met, the Postal Inspection Service is required to 
release the seized property. Under this subsection, the Postal 
Inspection Service 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.
    (2) Upon becoming aware that the seized property must be released, 
the Postal Inspection Service 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 the initiation of abandonment proceedings 
against the

[[Page 11444]]

property pursuant to 39 CFR 946, et seq. The property custodian will be 
notified of the identity of the person to whom the property should be 
released.
    (3) The property custodian shall have the right to require 
presentation of proper identification or to verify the identity of the 
person who seeks the release of property.
    (q) Disposition of forfeited property.
    (1) Whenever property is forfeited administratively, the Postal 
Inspection Service may:
    (i) Retain the property for official use;
    (ii) Transfer ownership of the property to any Federal, state or 
local law enforcement agency that participated in the investigation 
leading to the forfeiture;
    (iii) Sell any property that is not required to be destroyed by law 
and that is not harmful to the public;
    (iv) Destroy the property; or
    (v) Dispose of the property as otherwise permitted by law.
    (2) If the laws of a state in which an article of forfeited 
property is located prohibit the sale or possession of such property, 
or if the Postal Service and the Marshals Service are of the opinion 
that it would be more advantageous to sell the forfeited property in 
another district, the property may be moved to and sold in such other 
district.
    (r) Attorney fees and costs. The Postal Inspection Service is not 
liable for attorney fees or costs in any administrative forfeiture 
proceeding, including such proceedings in which a claim is filed, the 
matter is referred to the U.S. Attorney, and the U.S. Attorney declines 
to commence judicial forfeiture proceedings.
    3. Section 233.8 is revised to read as follows:


Sec.  233.8  Expedited Forfeiture Proceedings for Property Seizures 
Based on Violations Involving the Possession of Personal Use Quantities 
of a Controlled Substance.

    (a) Purpose and scope.
    (1) The following definitions, regulations, and criteria are 
designed to establish and implement procedures required by section 6079 
of the Anti-Drug Abuse Act of 1988, Public Law 100-690, 102 Stat. 4181. 
They are intended to supplement existing law and procedures relative to 
the forfeiture of property under the identified statutory authority. 
These regulations do not affect the existing legal and equitable rights 
and remedies of those with an interest in property seized for 
forfeiture, nor do these provisions relieve interested parties from 
their existing obligations and responsibilities in pursuing their 
interests through such courses of action. These regulations are 
intended to reflect the intent of Congress to minimize the adverse 
impact on those entitled to legal or equitable relief occasioned by the 
prolonged detention of property subject to forfeiture due to violations 
of law involving personal use quantities of controlled substances. The 
definition of personal use quantities of a controlled substance as 
contained herein is intended to distinguish between those small 
quantities, which are generally considered to be possessed for personal 
consumption and not for further distribution, and those larger 
quantities generally considered to be subject to further distribution.
    (2) In this regard, for violations involving the possession of 
personal use quantities of a controlled substance, section 6079(b)(2) 
requires either that administrative forfeiture be completed within 21 
days of the seizure of the property, or alternatively, that procedures 
are established that provide a means by which an individual entitled to 
relief may initiate an expedited administrative review of the legal and 
factual basis of the seizure for forfeiture. Should an individual 
request relief pursuant to these regulations and be entitled to the 
return of the seized property, such property shall be returned 
immediately following that determination, but not later than 20 days 
after filing of a petition for expedited release by an owner, and the 
administrative forfeiture process shall cease. Should the individual 
not be entitled to the return of the seized property, however, the 
administrative forfeiture of that property shall proceed. The owner 
may, in any event, obtain release of property pending the 
administrative forfeiture by submitting to the agency making the 
determination property sufficient to preserve the Government's vested 
interest for purposes of the administrative forfeiture.
    (b) Definitions. As used in this section, the following terms shall 
have the meanings specified:
    (1) Commercial fishing industry vessel means a vessel that:
    (i) Commercially engages in the catching, taking, or harvesting of 
fish or an activity that can reasonably be expected to result in the 
catching, taking, or harvesting of fish;
    (ii) Commercially prepares fish or fish products other than by 
gutting, decapitating, gilling, skinning, shucking, icing, freezing, or 
brine chilling; or
    (iii) Commercially supplies, stores, refrigerates, or transports 
fish, fish products, or materials directly related to fishing or the 
preparation of fish to or from a fishing, fish processing, or fish 
tender vessel or fish processing facility.
    (2) Controlled substance has the meaning given in 21 U.S.C. 802(6).
    (3) Normal and customary manner means that inquiry suggested by 
particular facts and circumstances that would customarily be undertaken 
by a reasonably prudent individual in a like or similar situation. 
Actual knowledge of such facts and circumstances is unnecessary, and 
implied, imputed, or constructive knowledge is sufficient. An 
established norm, standard, or custom is persuasive but not conclusive 
or controlling in determining whether an owner acted in a normal and 
customary manner to ascertain how property would be used by another 
legally in possession of the property. The failure to act in a normal 
and customary manner as defined herein will result in the denial of a 
petition for expedited release of the property and is intended to have 
the desirable effect of inducing owners of the property to exercise 
greater care in transferring possession of their property.
    (4) Owner means one having a legal and possessory interest in the 
property seized for forfeiture. Even though one may hold primary and 
direct title to the property seized, such person may not have 
sufficient actual beneficial interest in the property to support a 
petition as owner if the facts indicate that another person had 
dominion and control over the property.
    (5) Personal use quantities means those amounts of controlled 
substances in possession in circumstances where there is no other 
evidence of an intent to distribute, or to facilitate the 
manufacturing, compounding, processing, delivering, importing, or 
exporting of any controlled substance.
    (i) Evidence that possession of quantities of a controlled 
substance is for other than personal use may include, for example:
    (A) Evidence, such as drug scales, drug distribution paraphernalia, 
drug records, drug packaging material, method of drug packaging, drug 
``cutting'' agents and other equipment, that indicates an intent to 
process, package, or distribute a controlled substance;
    (B) Information from reliable sources indicating possession of a 
controlled substance with intent to distribute;
    (C) The arrest or conviction record of the person or persons in 
actual or constructive possession of the controlled substance for 
offenses under Federal, state, or local law that indicates an intent to 
distribute a controlled substance;

[[Page 11445]]

    (D) Circumstances or reliable information indicating that the 
controlled substance is related to large amounts of cash or any amount 
of prerecorded Government funds;
    (E) Circumstances or reliable information indicating that the 
controlled substance is a sample intended for distribution in 
anticipation of a transaction involving large quantities, or is part of 
a larger delivery;
    (F) Statements by the possessor, or otherwise attributable to the 
possessor, including statements of conspirators, that indicate 
possession with intent to distribute; or
    (G) The fact that the controlled substance was recovered from 
sweepings.
    (ii) Possession of a controlled substance shall be presumed to be 
for personal use when there are no indicia of illicit drug trafficking 
or distribution--such as, but not limited to, the factors listed 
above--and the amounts do not exceed the following quantities:
    (A) One gram of a mixture or substance containing a detectable 
amount of heroin;
    (B) One gram of a mixture or substance containing a detectable 
amount of the following:
    (1) Coca leaves, except coca leaves and extracts of coca leaves 
from which cocaine, ecgonine, and derivations of ecgonine or their 
salts have been removed;
    (2) Cocaine, its salts, optical and geometric isomers, and salts of 
isomers;
    (3) Ecgonine, its derivatives, their salts, isomers, and salts of 
isomers; or
    (4) Any compound, mixture, or preparation that contains any 
quantity of any of the substances referred to in (ii)(B)(1) through 
(ii)(B)(3) of this definition;
    (C) One-tenth gram of a mixture or substance described in (ii)(B) 
of this definition that contains cocaine base;
    (D) One-tenth gram of a mixture or substance containing a 
detectable amount of phencyclidine (PCP);
    (E) Five hundred micrograms of lysergic acid diethylamide (LSD);
    (F) One ounce of a mixture or substance containing a detectable 
amount of marijuana;
    (G) One gram of methamphetamine, its salts, isomers, and salts of 
its isomers, or one gram of a mixture or substance containing a 
detectable amount of methamphetamine, its salts, isomers, or salts of 
its isomers.
    (iii) The possession of a narcotic, a depressant, a stimulant, a 
hallucinogen or a cannabis-controlled substance will be considered in 
excess of personal use quantities if the dosage unit amount possessed 
provides the same or greater equivalent efficacy as described in 
(ii)(B) of this definition.
    (6) Property means property subject to forfeiture under 21 U.S.C. 
881(a)(4), (6), or (7); 19 U.S.C. 1595a; or 49 U.S.C. 80303.
    (7) Seizing agency means the Federal agency that has seized the 
property or adopted the seizure of another agency and has the 
responsibility for administratively forfeiting the property;
    (8) Statutory rights or defenses to the forfeiture means all legal 
and equitable rights and remedies available to a claimant of property 
seized for forfeiture.
    (c) Petition for expedited release in an administrative forfeiture 
proceeding.
    (1) Where property is seized for administrative forfeiture 
involving controlled substances in personal use quantities, the owner 
may petition the Postal Inspection Service for expedited release of the 
property.
    (2) Where property described in paragraph (c)(1) of this section 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 Postal Inspection Service 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 paragraph (c)(1) of 
this section, and the provisions of paragraph (c)(1) and other 
provisions in this section pertaining to a petition for expedited 
release shall apply as if the vessel had been physically seized.
    (3) The owner filing the petition for expedited release shall 
establish the following:
    (i) The owner has a valid, good faith interest in the seized 
property as owner or otherwise;
    (ii) The owner reasonably attempted to ascertain the use of the 
property in a normal and customary manner; and
    (iii) The owner did not know of or consent to the illegal use of 
the property, or in the event that the owner knew or should have known 
of the illegal use, the owner did what reasonably could be expected to 
prevent the violation.
    (4) In addition to those factors listed in paragraph (c)(3), 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.
    (5) A petition for expedited release must be received by the Postal 
Inspection Service within 20 days from the date of the first 
publication of the notice of seizure in order to be considered by the 
Postal Inspection Service. The petition must be executed and sworn to 
by the owner, and both the envelope and the request must be clearly 
marked ``PETITION FOR EXPEDITED RELEASE.'' Such petition shall be filed 
with the appropriate office or official identified in the personal 
written notice and the publication notice.
    (6) The petition shall include the following:
    (i) A complete description of the property, including 
identification numbers, if any, and the date and place of seizure;
    (ii) The petitioner's interest in the property, which shall be 
supported by title documentation, bills of sale, contracts, mortgages, 
or other satisfactory documentary evidence; and
    (iii) A statement of the facts and circumstances, to be established 
by satisfactory proof, relied upon by the petitioner to justify 
expedited release of the seized property.
    (d) Ruling on petition for expedited release in an administrative 
forfeiture proceeding.
    (1) 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 Postal Inspection Service need take no further action 
under this section on a petition for expedited release received 
pursuant to paragraph (c) of this section.
    (2) If no such final administrative determination is made within 21 
days of the seizure, the following procedure shall apply. The Postal 
Inspection Service 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 paragraph (c)(3) of 
this section and:
    (i) If the Postal Inspection Service determines that those factors 
have been established, it shall terminate the administrative 
proceedings and return the property to the owner (or in the case of a 
commercial fishing industry vessel for which a summons has been issued 
shall dismiss the summons), except

[[Page 11446]]

where it is evidence of a violation of law; or
    (ii) If the Postal Inspection Service determines that those factors 
have not been established, the agency shall proceed with the 
administrative forfeiture.
    (e) Posting of substitute monetary amount in an administrative 
forfeiture proceeding.
    (1) Where property is seized for administrative forfeiture 
involving controlled substances in personal use quantities, the owner 
may obtain release of the property by posting a substitute monetary 
amount with the Postal Inspection Service to be held subject to 
forfeiture proceedings in place of the seized property to be released. 
The property will be released to the owner upon the payment of an 
amount equal to the Government-appraised value of the property if the 
property is not evidence of a violation of law and has no design or 
other characteristics that particularly suit it for use in illegal 
activities. This payment must be in the form of a traveler's check, a 
money order, a cashier's check, or an irrevocable letter of credit made 
payable to the Postal Inspection Service. A bond in the form of a 
cashier's check will be considered as paid once the check has been 
accepted for payment by the financial institution that issued the 
check.
    (2) If a substitute monetary amount is posted and the property is 
administratively forfeited, the Postal Inspection Service will forfeit 
the substitute amount in lieu of the property.
    (f) Notice provisions. At the time of seizure of property defined 
in paragraph (b)(6) of this section for violations involving the 
possession of personal use quantities of a controlled substance, the 
Postal Inspection Service must provide written notice to the possessor 
of the property specifying the procedures for 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.
    4. Section 233.9 is revised to read as follows:


Sec.  233.9  Regulations governing remission or mitigation of 
administrative, civil, and criminal forfeitures.

    (a) Purpose, authority, and scope--(1) Purpose. This section sets 
forth the procedures for Postal Inspection Service officials to follow 
when considering remission or mitigation of administrative forfeitures 
under the jurisdiction of the Postal Inspection Service. The purpose of 
these regulations is to provide a basis for the partial or total 
remission of forfeiture for individuals who have an interest in the 
forfeited property but who did not participate in, or have knowledge 
of, the conduct that resulted in the property being subject to 
forfeiture and, where required, took all reasonable steps under the 
circumstances to ensure that such property would not be used, acquired, 
or disposed of contrary to law. Additionally, the regulations provide 
for partial or total mitigation of the forfeiture and imposition of 
alternative conditions in appropriate circumstances.
    (2) Authority to grant remission and mitigation.
    (i) Remission and mitigation functions in administrative 
forfeitures under the jurisdiction of the Postal Inspection Service are 
performed by the Chief Counsel.
    (ii) Remission and mitigation functions in judicial cases are 
performed by the Criminal Division of the Department of Justice. Within 
the Criminal Division, authority to grant remission and mitigation is 
delegated to the Chief, Asset Forfeiture and Money Laundering Section.
    (iii) The powers and responsibilities delegated by the regulations 
in this section may be re-delegated to attorneys or managers working 
under the supervision of the Chief Counsel.
    (3) Scope. This section governs any petition for remission filed 
with the Postal Inspection Service and supersedes any Postal Service 
regulation governing petitions for remission, to the extent such 
regulation is inconsistent with this section.
    (4) Applicability. The time periods and internal requirements 
established in this section are designed to guide the orderly 
administration of the remission and mitigation process and are not 
intended to create rights or entitlements in favor of individuals 
seeking remission or mitigation. The regulations will apply to all 
forfeiture actions commenced on or after February 27, 2012.
    (b) Definitions. As used in this section:
    (1) Administrative forfeiture means the process by which property 
may be forfeited by the Postal Inspection Service rather than through 
judicial proceedings. Administrative forfeiture has the same meaning as 
``nonjudicial forfeiture'', as that term is used in 18 U.S.C. 983.
    (2) Appraised value means the estimated market value of an asset at 
the time and place of seizure if such or similar property was freely 
offered for sale between a willing seller and a willing buyer.
    (3) Assets Forfeiture Fund means the Department of Justice Assets 
Forfeiture Fund, Department of the Treasury Assets Forfeiture Fund, or 
the Postal Service's Assets Forfeiture Fund, depending upon the 
identity of the seizing agency.
    (4) Attorney General means the Attorney General of the United 
States or that official's designee.
    (5) Beneficial owner means a person with actual use of, as well as 
an interest in, the property subject to forfeiture.
    (6) Chief, Asset Forfeiture and Money Laundering Section, and 
Chief, refer to the Chief of the Asset Forfeiture and Money Laundering 
Section, Criminal Division, United States Department of Justice.
    (7) General creditor means one whose claim or debt is not secured 
by a specific right to obtain satisfaction against the particular 
property subject to forfeiture.
    (8) Judgment creditor means one who has obtained a judgment against 
the debtor but has not yet received full satisfaction of the judgment.
    (9) Judicial forfeiture means either a civil or a criminal 
proceeding in a United States District Court that may result in a final 
judgment and order of forfeiture.
    (10) Lienholder means a creditor whose claim or debt is secured by 
a specific right to obtain satisfaction against the particular property 
subject to forfeiture. A lien creditor qualifies as a lienholder if the 
lien:
    (i) Was established by operation of law or contract;
    (ii) Was created as a result of an exchange of money, goods, or 
services; and
    (iii) Is perfected against the specific property forfeited for 
which remission or mitigation is sought (e.g., a real estate mortgage; 
a mechanic's lien).
    (11) Net equity means the amount of a lienholder's monetary 
interest in the property subject to forfeiture. Net equity shall be 
computed by determining the amount of unpaid principal and unpaid 
interest at the time of seizure, and by adding to that sum unpaid 
interest calculated from the date of seizure through the last full 
month prior to the date of the decision on the petition. Where a rate 
of interest is set forth in a security agreement, the rate of interest 
to be used in this computation will be the annual percentage rate so 
specified in the security agreement that is the basis of the 
lienholder's interest. In this computation, however, there shall be no 
allowances for attorneys' fees, accelerated or enhanced interest

[[Page 11447]]

charges, amounts set by contract as damages, unearned extended warranty 
fees, insurance, service contract charges incurred after the date of 
seizure, allowances for dealer's reserve, or any other similar charges.
    (12) Nonjudicial forfeiture has the same meaning as administrative 
forfeiture as defined in this section.
    (13) Owner means the person in who primary title is vested or whose 
interest is manifested by the actual and beneficial use of the 
property, even though the title is vested in another. A victim of an 
offense, as defined in paragraph (b)(22) of this section, may also be 
an owner if that person has a present legally cognizable ownership 
interest in the property forfeited. A nominal owner of property will 
not be treated as its true owner if that person is not its beneficial 
owner.
    (14) Person means an individual, partnership, corporation, joint 
business enterprise, estate, or other legal entity capable of owning 
property.
    (15) Petition means a petition for remission or mitigation of 
forfeiture under the regulations in this part. This definition includes 
a petition for restoration of the proceeds of sale of forfeited 
property and a petition for the value of the forfeited property placed 
into official use.
    (16) Petitioner means the person applying for remission, 
mitigation, restoration of the proceeds of sale, or for the appraised 
value of forfeited property, under this part. A petitioner may be an 
owner as defined in paragraph (b)(13), a lienholder as defined in 
paragraph (b)(10), or a victim as defined in paragraph (b)(22), subject 
to the limitations of paragraph (h).
    (17) Property means real or personal property of any kind capable 
of being owned or possessed.
    (18) Record means a series of arrests for related crimes, unless 
the arrestee was acquitted or the charges were dismissed for lack of 
evidence, a conviction for a related crime or completion of sentence 
within 10 years of the acquisition of the property subject to 
forfeiture, or two convictions for a related crime at any time in the 
past.
    (19) Related crime as used in paragraphs (b)(18) and (f) 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.
    (20) Related offense as used in paragraph (h) means:
    (i) Any predicate offense charged in a Federal Racketeer Influenced 
and Corrupt Organizations Act (RICO) count for which forfeiture was 
ordered; or
    (ii) An offense committed as part of the same scheme or design, or 
pursuant to the same conspiracy, as was involved in the offense for 
which forfeiture was ordered.
    (21) Ruling Official means any official to whom decision making 
authority has been delegated pursuant to paragraph (a)(2).
    (22) Seizing agency means any Federal agency that seized the 
property or adopted the seizure of another agency for Federal 
forfeiture.
    (23) Victim means a person who has incurred a pecuniary loss as a 
direct result of the commission of the offense underlying a forfeiture. 
A drug user is not considered a victim of a drug trafficking offense 
under this definition. A victim does not include one who acquires a 
right to sue the perpetrator of the criminal offense for any loss by 
assignment, subrogation, inheritance, or otherwise from the actual 
victim, unless that person has acquired an actual ownership interest in 
the forfeited property; provided however, that if a victim has received 
compensation from insurance or any other source with respect to a 
pecuniary loss, remission may be granted to the third party who 
provided compensation, up to the amount of the victim's pecuniary loss 
as defined in paragraph (h)(3).
    (24) Violator means the person whose use or acquisition of the 
property in violation of the law subjected such property to seizure for 
forfeiture.
    (c) Petitions in administrative forfeiture cases--(1) Notice of 
seizure. The notice of seizure and intent to forfeit the property shall 
advise any persons who may have a present ownership interest in the 
property to submit their petitions for remission or mitigation within 
30 days of the date they receive the notice in order to facilitate 
processing. Petitions shall be considered any time after notice until 
the property has been forfeited, except in cases involving petitions to 
restore the proceeds from the sale of forfeited property. A notice of 
seizure shall include the Ruling Official, the mailing and street 
address of the official to whom petitions should be sent, and an asset 
identifier number.
    (2) Persons who may file.
    (i) A petition for remission or mitigation must be filed by a 
petitioner as defined in paragraph (b)(16), or as prescribed in 
paragraph (i)(7) and (8). A person or person acting 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:
    (A) Purposely leaves the jurisdiction of the United States;
    (B) Declines to enter or reenter the United States to submit to its 
jurisdiction; or
    (C) Otherwise evades the jurisdiction of the court in which a 
criminal matter is pending against the person.
    (ii) Paragraph (c)(2)(A) applies to a petition filed by a 
corporation if any majority shareholder, or individual filing the claim 
on behalf of the corporation:
    (A) Purposely leaves the jurisdiction of the United States;
    (B) Declines to enter or reenter the United States to submit to its 
jurisdiction; or
    (C) Otherwise evades the jurisdiction of the court in which a 
criminal case is pending against the person.
    (3) Contents of petition.
    (i) All petitions must include the following information in clear 
and concise terms:
    (A) The name, address, and social security or other taxpayer 
identification number of the person claiming an interest in the seized 
property who is seeking remission or mitigation;
    (B) The name of the seizing agency, the asset identifier number, 
and the date and place of seizure;
    (C) A complete description of the property, including make, model, 
and serial numbers, if any; and
    (D) A description of the petitioner's interest in the property as 
owner, lienholder, or otherwise, supported by original or certified 
bills of sale, contracts, deeds, mortgages, or other documentary 
evidence. Such documentation includes evidence establishing the source 
of funds for seized currency or the source of funds used to purchase 
the seized asset.
    (ii) Any factual recitation or documentation of any type in a 
petition must be supported by a declaration under penalty of perjury 
that meets the requirements of 28 U.S.C. 1746.
    (4) Releases. In addition to the contents of the petition for 
remission or mitigation set forth in paragraph (c)(3) of this section, 
upon request, the petitioner shall also furnish the agency with an 
instrument executed by the titled or registered owner and any other 
known claimant of an interest in the property releasing interest in 
such property.
    (5) Filing a petition.
    (i) A petition for remission or mitigation subject to 
administrative

[[Page 11448]]

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 paragraph (i)(7).
    (ii) If the notice of seizure does not provide an official address, 
the petition shall be addressed to the Asset Forfeiture Unit at the 
following address: Asset Forfeiture Unit, Criminal Investigations, U.S. 
Postal Inspection Service, P.O. Box 44373, Washington, DC 20026-4373.
    (iii) Submission by facsimile or other electronic means will not be 
accepted.
    (6) Agency investigation. Upon receipt of a petition, the Postal 
Inspection Service shall investigate the merits of the petition and 
prepare a written report containing the results of that investigation. 
This report shall be submitted to the Ruling Official for review and 
consideration.
    (7) Ruling. Upon receipt of the petition and the agency report, the 
Ruling Official for the Postal Inspection Service shall review the 
petition and the report, if any, and shall rule on the merits of the 
petition. No hearing shall be held.
    (8) Petitions granted. If the Ruling Official grants a remission or 
mitigation of the forfeiture, a copy of the decision shall be mailed to 
the petitioner or, if represented by an attorney, to the petitioner's 
attorney. A copy shall also be sent to the U.S. Marshals Service, or 
other property custodian. The written decision shall include the terms 
and conditions, if any, upon which the remission or mitigation is 
granted, and the procedures the petitioner must follow to obtain 
release of the property or the monetary interest therein.
    (9) Petitions denied. If the Ruling Official denies a petition, a 
copy of the decision shall be mailed to the petitioner or, if 
represented by an attorney, to the petitioner's attorney of record. A 
copy of the decision shall also be sent to the U.S. Marshals Service, 
or other property custodian. The decision shall specify the reason that 
the petition was denied. The decision shall advise the petitioner that 
a request for reconsideration of the denial of the petition may be 
submitted to the Ruling Official in accordance with paragraph (c)(10).
    (10) Request for reconsideration.
    (i) A request for reconsideration of the denial of the petition 
shall be considered if:
    (A) It is postmarked or received by the office of the Ruling 
Official within 10 days from the receipt of the notice of denial of the 
petition by the petitioner; and
    (B) The request is based on information or evidence not previously 
considered that is material to the basis for the denial or presents a 
basis clearly demonstrating that the denial was erroneous.
    (ii) In no event shall a request for reconsideration be decided by 
the same Ruling Official who ruled on the original petition.
    (iii) Only one request for reconsideration of a denial of a 
petition shall be considered.
    (11) Restoration of proceeds from sale.
    (i) 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:
    (A) Did not know of the seizure prior to the entry of a declaration 
of forfeiture; and
    (B) Could not reasonably have known of the seizure prior to the 
entry of a declaration of forfeiture.
    (ii) Such a petition shall be submitted pursuant to paragraphs 
(c)(2) through (c)(5) of this section within 90 days of the date the 
property is sold or otherwise disposed of.
    (d) Petitions in judicial forfeiture cases--(1) Notice of seizure. 
The notice of seizure and intent to forfeit the property shall advise 
any persons who may have a present ownership interest in the property 
to submit their petitions for remission or mitigation within 30 days of 
the date they receive the notice in order to facilitate processing. 
Petitions shall be considered any time after notice until such time as 
the forfeited property is placed in official use, sold, or otherwise 
disposed of according to law, except in cases involving petitions to 
restore property. A notice of seizure shall include the title of the 
Ruling Official and the mailing and street address of the official to 
whom petitions should be sent, the name of the agency seizing the 
property, an asset identifier number, and the district court docket 
number.
    (2) Persons who may file. A petition for remission or mitigation 
must be filed by a petitioner as defined in paragraph (b)(16), or as 
prescribed in paragraph (i)(7) and (8).
    (3) Contents of petition.
    (i) All petitions must include the following information in clear 
and concise terms:
    (A) The name, address, and Social Security or other taxpayer 
identification number of the person claiming an interest in the seized 
property who is seeking remission or mitigation;
    (B) The name of the seizing agency, the asset identifier number, 
and the date and place of seizure;
    (C) The district court docket number;
    (D) A complete description of the property, including the address 
or legal description of real property, and make, model, and serial 
numbers of personal property, if any; and
    (E) A description of the petitioner's interest in the property as 
owner, lienholder, or otherwise, supported by original or certified 
bills of sale, contracts, mortgages, deeds, or other documentary 
evidence.
    (ii) Any factual recitation or documentation of any type in a 
petition must be supported by a declaration under penalty of perjury 
that meets the requirements of 28 U.S.C. 1746.
    (4) Releases. In addition to the content of the petition for 
remission or mitigation set forth in paragraph (d)(3) of this section, 
the petitioner, upon request, also shall furnish the agency with an 
instrument executed by the titled or registered owner and any other 
known claimant of an interest in the property releasing the interest in 
such property.
    (5) 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 paragraph (i)(7) of this section; and shall be submitted 
to the U.S. Attorney for the district in which the judicial forfeiture 
proceedings are brought.
    (6) Agency investigation and recommendation; U.S. Attorney's 
recommendation. Upon receipt of a petition, the U.S. Attorney shall 
direct the seizing agency to investigate the merits of the petition 
based on the information provided by the petitioner and the totality of 
the agency's investigation of the underlying basis for forfeiture. The 
agency shall submit to the U.S. Attorney a report of its investigation 
and its recommendation on whether the petition should be granted or 
denied. Upon receipt of the agency's report and recommendation, the 
U.S. Attorney shall forward to the Chief, Asset Forfeiture and Money 
Laundering Section, the petition, the seizing agency's report and 
recommendation, and the U.S. Attorney's recommendation on whether the 
petition should be granted or denied.

[[Page 11449]]

    (7) 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 administrative agency pursuant 
to paragraph (c) of this section.
    (8) Petitions granted. If the Chief grants a remission or mitigates 
the forfeiture, the Chief shall mail a copy of the decision to the 
petitioner (or, if represented by an attorney, to the petitioner`s 
attorney), and shall mail or transmit electronically a copy of the 
decision to the appropriate U.S. Attorney, the U.S. Marshals Service or 
other property custodian, and the seizing agency. The written decision 
shall include the terms and conditions, if any, upon which the 
remission or mitigation is granted and the procedures the petitioner 
must follow to obtain release of the property or the monetary interest 
therein. The Chief shall advise the petitioner or the petitioner`s 
attorney to consult with the U.S. Attorney as to such terms and 
conditions. The U.S. Attorney shall confer with the seizing agency 
regarding the release and shall coordinate disposition of the property 
with that office and the U.S. Marshals Service or other property 
custodian.
    (9) Petitions denied. If the Chief denies a petition, a copy of 
that decision shall be mailed to the petitioner (or, if represented by 
an attorney, to the petitioner`s attorney of record), and mailed or 
transmitted electronically to the appropriate U.S. Attorney, the U.S. 
Marshals Service or other property custodian, and the seizing agency. 
The decision shall specify the reason that the petition was denied. The 
decision shall advise the petitioner that a request for reconsideration 
of the denial of the petition may be submitted to the Chief at the 
address provided in the decision, in accordance with paragraph (d)(10) 
of this section.
    (10) Request for reconsideration.
    (i) A request for reconsideration of the denial shall be considered 
if:
    (A) It is postmarked or received by the Asset Forfeiture and Money 
Laundering Section at the address contained in the decision denying the 
petition within 10 days from the receipt of the notice of denial of the 
petition by the petitioner;
    (B) A copy of the request is also received by the appropriate U.S. 
Attorney within 10 days of the receipt of the denial by the petitioner; 
and
    (C) The request is based on information or evidence not previously 
considered that is material to the basis for the denial or presents a 
basis clearly demonstrating that the denial was erroneous.
    (ii) In no event shall a request for reconsideration be decided by 
the Ruling Official who ruled on the original petition.
    (iii) Only one request for reconsideration of a denial of a 
petition shall be considered.
    (iv) Upon receipt of the request for reconsideration of the denial 
of a petition, disposition of the property will be delayed pending 
notice of the decision at the request of the Chief. lf the request for 
reconsideration is not received within the prescribed period, the U.S. 
Marshals Service may dispose of the property.
    (11) Restoration of proceeds from sale.
    (i) 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:
    (A) Did not know of the seizure prior to the entry of a final order 
of forfeiture; and
    (B) Could not reasonably have known of the seizure prior to the 
entry of a final order of forfeiture.
    (ii) Such a petition must be submitted pursuant to paragraphs 
(d)(2) through (d)(5) of this section within 90 days of the date the 
property was sold or otherwise disposed of.
    (e) Criteria governing administrative and judicial remission and 
mitigation.
    (1) Remission.
    (i) The Ruling Official shall not grant remission of a forfeiture 
unless the petitioner establishes that the petitioner has a valid, good 
faith, and legally cognizable interest in the seized property as owner 
or lienholder as defined in this part and is an innocent owner within 
the meaning of 18 U.S.C. 983(d)(2)(A) or (d)(3)(A).
    (ii) For purposes of this paragraph, the knowledge and 
responsibilities of a petitioner's representative, agent, or employee 
are imputed to the petitioner where the representative, agent, or 
employee was acting in the course of that person's employment and in 
furtherance of the petitioner's business.
    (iii) The petitioner has the burden of establishing the basis for 
granting a petition for remission or mitigation of forfeited property, 
a restoration of proceeds of sale or appraised value of forfeited 
property, or a reconsideration of a denial of such a petition. Failure 
to provide information or documents and to submit to interviews, as 
requested, may result in a denial of the petition.
    (iv) The Ruling Official shall presume a valid forfeiture and shall 
not consider whether the evidence is sufficient to support the 
forfeiture.
    (v) Willful, materially false statements or information made or 
furnished by the petitioner in support of a petition for remission or 
mitigation of forfeited property, the restoration of proceeds or 
appraised value of forfeited property, or the reconsideration of a 
denial of any such petition shall be grounds for denial of such 
petition and possible prosecution for the filing of false statements.
    (2) Mitigation.
    (i) The Ruling Official may grant mitigation to a party not 
involved in the commission of the offense underlying forfeiture:
    (A) Where the petitioner has not met the minimum conditions for 
remission, but the Ruling Official finds that some relief should be 
granted to avoid extreme hardship, and that return of the property 
combined with imposition of monetary or other conditions of mitigation 
in lieu of a complete forfeiture will promote the interest of justice 
and will not diminish the deterrent effect of the law. Extenuating 
circumstances justifying such a finding include those circumstances 
that reduce the responsibility of the petitioner for knowledge of the 
illegal activity, knowledge of the criminal record of a user of the 
property, or failure to take reasonable steps to prevent the illegal 
use or acquisition by another for some reason, such as a reasonable 
fear of reprisal; or
    (B) Where the minimum standards for remission have been satisfied 
but the overall circumstances are such that, in the opinion of the 
Ruling Official, complete relief is not warranted.
    (ii) The Ruling Official may as a matter of discretion grant 
mitigation to a party involved in the commission of the offense 
underlying the forfeiture where certain mitigating factors exist, 
including, but not limited to: The lack of a prior record or evidence 
of similar criminal conduct; if the violation does not include drug 
distribution, manufacturing, or importation, the fact that the violator 
has taken steps, such as drug treatment, to prevent further criminal 
conduct; the fact that the violation was minimal and was not part of a 
larger criminal scheme; the fact that the violator has cooperated with 
Federal, state, or local investigations relating to the criminal 
conduct underlying the forfeiture; or the fact that complete forfeiture 
of an asset is not necessary to achieve the legitimate purposes of 
forfeiture.
    (iii) Mitigation may take the form of a monetary condition or the 
imposition of other conditions relating to the

[[Page 11450]]

continued use of the property, and the return of the property, in 
addition to the imposition of any other costs that would be chargeable 
as a condition to remission. This monetary condition is considered as 
an item of cost payable by the petitioner, and shall be deposited into 
the Postal Inspection Service's Fund as an amount realized from 
forfeiture in accordance with the applicable statute. If the petitioner 
fails to accept the Ruling Official's mitigation decision or any of its 
conditions, or fails to pay the monetary amount within 20 days of the 
receipt of the decision, the property shall be sold, and the monetary 
amount imposed and other costs chargeable as a condition to mitigation 
shall be subtracted from the proceeds of the sale before transmitting 
the remainder to the petitioner.
    (f) Special rules for specific petitioners--(1) General creditors. 
A general creditor may not be granted remission or mitigation of 
forfeiture unless that person otherwise qualifies as petitioner under 
this part.
    (2) Rival claimants. If the beneficial owner of the forfeited 
property and the owner of a security interest in the same property each 
files a petition, and if both petitions are found to be meritorious, 
the claims of the beneficial owner shall take precedence.
    (3) Voluntary bailments. A petitioner who allows another to use the 
petitioner's 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 paragraph (e) of this section.
    (4) 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 paragraph (e) of this section.
    (5) 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 paragraph (b)(19), 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 paragraph (e) of this section.
    (6) Judgment creditors.
    (i) A judgment creditor will be recognized as a lienholder if:
    (A) The judgment was duly recorded before the seizure of the 
property for forfeiture;
    (B) Under applicable state or other local law, the judgment 
constitutes a valid lien on the property that attached to it before the 
seizure of the property for forfeiture; and
    (C) The petitioner had no knowledge of the commission of any act or 
acts giving rise to the forfeiture at the time the judgment became a 
lien on the forfeited property.
    (ii) A judgment creditor will not be recognized as a lienholder if 
the property in question is not property of which the judgment debtor 
is entitled to claim ownership under applicable state or other local 
law (e.g., stolen property). A judgment creditor is entitled under this 
part to no more than the amount of the judgment, exclusive of any 
interest, costs, or other fees including attorney's fees associated 
with the action that led to the judgment or its collection.
    (iii) A judgment creditor's lien must be registered in the district 
where the property is located if the judgment was obtained outside the 
district.
    (g) Terms and conditions of remission and mitigation--(1) Owners.
    (i) An owner's interest in property that has been forfeited is 
represented by the property itself or by a monetary interest equivalent 
to that interest at the time of seizure. Whether the property or a 
monetary equivalent will be remitted to an owner shall be determined at 
the discretion of the Ruling Official.
    (ii) If a civil judicial forfeiture action against the property is 
pending, release of the property must await an appropriate court order.
    (iii) Where the Government sells or disposes of the property prior 
to the grant of the remission, the owner shall receive the proceeds of 
that sale, less any costs incurred by the Government in the sale. The 
Ruling Official, as a matter of discretion, may waive the deduction of 
costs and expenses incident to the forfeiture.
    (iv) Where the owner does not comply with the conditions imposed 
upon release of the property by the Ruling Official, the property shall 
be sold. Following the sale, the proceeds shall be used to pay all 
costs of the forfeiture and disposition of the property, in addition to 
any monetary conditions imposed. The remaining balance shall be paid to 
the owner.
    (2) Lienholders.
    (i) When the forfeited property is to be retained for official use 
or transferred to a state or local law enforcement agency or foreign 
government pursuant to law, and remission or mitigation has been 
granted to a lienholder, the recipient of the property shall assure 
that:
    (A) In the case of remission, the lien is satisfied as determined 
through the petition process; or
    (B) In the case of mitigation, an amount equal to the net equity, 
less any monetary conditions imposed, is paid to the lienholder prior 
to the release of the property to the recipient agency of foreign 
government.
    (ii) When the forfeited property is not retained for official use 
or transferred to another agency or foreign government pursuant to law, 
the lienholder shall be notified by the Ruling Official of the right to 
select either of the following alternatives:
    (A) Return of property. The lienholder may obtain possession of the 
property after paying the United States, through the Ruling Official, 
the costs and expenses incident to the forfeiture, the amount, if any, 
by which the appraised value of the property exceeds the lienholder's 
net equity in the property, and any amount specified in the Ruling 
Official's decision as a condition to remit the property. The Ruling 
Official, as a matter of discretion, may waive costs and expenses 
incident to the forfeiture. The Ruling Official shall forward a copy of 
the decision, a memorandum of disposition, and the original releases to 
the division or field office responsible for the seizure and custody of 
the property or, if applicable, to the U.S. Marshals Service, who shall 
thereafter release the property to the lienholder; or
    (B) Sale of Property and Payment to Lienholder. Subject to the 
provisions of paragraph (i)(1), 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, as a matter of discretion, may 
waive costs and expenses incident to the forfeiture.
    (iii) If the lienholder does not notify the Ruling Official of the 
selection of one of the two options set forth in paragraph (g)(2)(ii) 
of this section within 20 days of the receipt of notification, the 
Ruling Official shall direct the division or field office responsible 
for the seizure or custody, or if applicable, the U.S. Marshals 
Service, to sell the property and pay the lienholder an amount up to 
the net equity, less the costs and

[[Page 11451]]

expenses incurred incident to the forfeiture and sale, and any monetary 
conditions imposed. In the event a lienholder subsequently receives a 
payment of any kind on the debt owed for which he or she received 
payment as a result of the granting of remission or mitigation, the 
lienholder shall reimburse the Postal Service Forfeiture Fund to the 
extent of the payment received.
    (iv) Where the lienholder does not comply with the conditions 
imposed upon the release of the property, the property shall be sold 
after forfeiture. From the proceeds of the sale, all costs incident to 
the forfeiture and sale shall first be deducted, and the balance up to 
the net equity, less any monetary conditions, shall be paid to the 
lienholder.
    (h) Remission procedures for victims. This section applies to 
victims of an offense underlying the forfeiture of property, or of a 
related offense, who do not have a present ownership interest in the 
forfeited property (or, in the case of multiple victims of an offense, 
who do not have a present ownership interest in the forfeited property 
that is clearly superior to that of other petitioner victims). This 
section applies only with respect to property forfeited pursuant to 
statutes that explicitly authorize restoration or remission of 
forfeited property to victims. A victim requesting remission under this 
section may concurrently request remission as an owner, pursuant to the 
regulations set forth in paragraphs (c), (d), and (g) of this section. 
The claims of victims granted remission as both an owner and victim 
shall, like other owners, have priority over the claims of any non-
owner victims whose claims are recognized under this section.
    (1) Remission procedure for victims--(i) Where to file. Persons 
seeking remission as victims shall file petitions for remission with 
the appropriate deciding official as described in paragraph (c)(5) 
(administrative forfeiture) or (d)(5) (judicial forfeiture) of this 
section.
    (ii) Time of decision. The Ruling Official or that person's 
designee as described in paragraph (a)(2) of this section 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.
    (iii) Request for reconsideration. Persons denied remission under 
this section may request reconsideration of the denial, in accordance 
with paragraph (c)(10) (administrative forfeiture) or (d)(10) (judicial 
forfeiture) of this section.
    (2) Qualification to file. A victim, as defined in paragraph 
(b)(22) of this section, may be granted remission, if in addition to 
complying with the other applicable provisions of paragraph (h) of this 
section, the victim satisfactorily demonstrates that:
    (i) A pecuniary loss of a specific amount has been directly caused 
by the criminal offense, or related offense, that was the underlying 
basis for the forfeiture, and that the loss is supported by documentary 
evidence including invoices and receipts;
    (ii) The pecuniary loss is the direct result of the illegal acts 
and is not the result of otherwise lawful acts that were committed in 
the course of a criminal offense;
    (iii) The victim did not knowingly contribute to, participate in, 
benefit from, or act in a willfully blind manner towards commission of 
the offense, or related offense, that was the underlying basis of the 
forfeiture;
    (iv) The victim has not in fact been compensated for the wrongful 
loss of the property by the perpetrator or others; and
    (v) The victim does not have recourse reasonably available to other 
assets from which to obtain compensation for the wrongful loss of the 
property.
    (3) Pecuniary loss. The amount of the pecuniary loss suffered by a 
victim for which remission may be granted is limited to the fair market 
value of the property of which the victim was deprived as of the date 
of the occurrence of the loss. No allowance shall be made for interest 
forgone or for collateral expenses incurred to recover lost property or 
to seek other recompense.
    (4) Torts. A tort associated with illegal activity that formed the 
basis for the forfeiture shall not be a basis for remission, unless it 
constitutes the illegal activity itself, nor shall remission be granted 
for physical injuries to a petitioner or for damage to a petitioner's 
property.
    (5) Denial of petition. As a matter of discretion, the Ruling 
Official may decline to grant remission where:
    (i) There is substantial difficulty in calculating the pecuniary 
loss incurred by the victim or victims;
    (ii) The amount of the remission, if granted, would be small 
compared with the amount of expenses incurred by the Government in 
determining whether to grant remission; or
    (iii) The total number of victims is large and the monetary amount 
of the remission so small as to make its granting impractical.
    (6) Pro rata basis. In granting remission to multiple victims 
pursuant to this section, the Ruling Official should generally grant 
remission on a pro rata basis to recognized victims when petitions 
cannot be granted in full due to the limited value of the forfeited 
property. However, the Ruling Official may consider, among others, the 
following factors in establishing appropriate priorities in individual 
cases:
    (i) The specificity and reliability of the evidence establishing a 
loss;
    (ii) The fact that a particular victim is suffering an extreme 
financial hardship;
    (iii) The fact that a particular victim has cooperated with the 
Government in the investigation related to the forfeiture or to a 
related persecution or civil action; and
    (iv) In the case of petitions filed by multiple victims of related 
offenses, the fact that a particular victim is a victim of the offense 
underlying the forfeiture.
    (7) Reimbursement. Any petitioner granted remission pursuant to 
this part shall reimburse the Postal Service Forfeiture Fund for the 
amount received, to the extent the individual later receives 
compensation for the loss of property from any other source. The 
petitioner shall surrender the reimbursement upon payment from any 
secondary source.
    (8) Claims of financial institution regulatory agencies. In cases 
involving property forfeitable under 18 U.S.C. 981(a)(1)(C) or (D), the 
Ruling Official may decline to grant a petition filed by a petitioner 
in whole or in part due to the lack of sufficient forfeitable funds to 
satisfy both the petitioner and claims of the financial institution 
regulatory agencies pursuant to 18 U.S.C. 981(e)(3) or (7). Generally, 
claims of financial institution regulatory agencies pursuant to 18 
U.S.C. 981(e)(3) or (7) shall take priority over claims of victims.
    (9) Amount of Remission. Consistent with the Assets Forfeiture Fund 
statute (28 U.S.C. 524(c)), the amount of remission shall not exceed 
the victim's share of the net proceeds of the forfeitures associated 
with the activity that caused the victim's loss. The calculation of net 
proceeds includes, but is not limited to, the deduction of allowable 
Government expenses and valid third-party claims.
    (i) Miscellaneous provisions--(1) Priority of payment. Except where 
otherwise provided in this part, costs incurred by the Postal 
Inspection Service, the U.S. Marshals Service, and other agencies 
participating in the forfeiture that were incident to the forfeiture, 
sale, or other disposition of the property shall be deducted from the 
amount available for remission or mitigation. Such costs include, but 
are not limited to, court costs, storage costs,

[[Page 11452]]

brokerage and other sales-related costs, the amount of any liens and 
associated costs paid by the Government on the property, costs incurred 
in paying the ordinary and necessary expenses of a business seized for 
forfeiture, awards for information as authorized by statute, expenses 
of trustees or other assistants pursuant to paragraph (i)(3) of this 
section, investigative or prosecutorial costs specially incurred 
incident to the particular forfeiture, and costs incurred incident to 
the processing of petitions for remission or mitigation. The remaining 
balance shall be available for remission or mitigation. The Ruling 
Official shall direct the distribution of the remaining balance in the 
following order or priority, except that the Ruling Official may 
exercise discretion in determining the priority between petitioners 
belonging to classes described in paragraph (i)(1)(iii) and (iv) of 
this section in exceptional circumstances:
    (i) Owners;
    (ii) Lienholders;
    (iii) Federal financial institution regulatory agencies (pursuant 
to paragraph (i)(5) of this section), not constituting owners or 
lienholders; and
    (iv) Victims not constituting owners or lienholders pursuant to 
paragraph (h) of this part.
    (2) Sale or disposition of property prior to ruling. If forfeited 
property has been sold or otherwise disposed of prior to a ruling, the 
Ruling Official may grant relief in the form of a monetary amount. The 
amount realized by the sale of property is presumed to be the value of 
the property. Monetary relief shall not be greater than the appraised 
value of the property at the time of seizure and shall not exceed the 
amount realized from the sale or other disposition. The proceeds of the 
sale shall be distributed as follows:
    (i) Payment of the Government's expenses incurred incident to the 
forfeiture and sale, including court costs and storage charges, if any;
    (ii) Payment to the petitioner of an amount up to that person's 
interest in the property;
    (iii) Payment to the Postal Service Forfeiture Fund of all other 
costs and expenses incident to the forfeiture;
    (iv) In the case of victims, payment of any amount up to the amount 
of that person's loss; and
    (v) Payment of the balance remaining, if any, to the Postal Service 
Forfeiture Fund.
    (3) Trustees and other assistants. As a matter of discretion, the 
Ruling Official, with the approval of the Chief Postal Inspector, may 
use the services of a trustee, other Government official, or appointed 
contractors to notify potential petitioners, process petitions, and 
make recommendations to the Ruling Official on the distribution of 
property to petitioners. The expense for such assistance shall be paid 
out of the forfeited funds.
    (4) 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 paragraphs (c) through (e) of this 
section. The decision to make such transfer shall be made in writing by 
the Ruling Official.
    (5) Financial institution regulatory agencies. A Ruling Official 
may direct the transfer of property under 18 U.S.C. 981(e) to certain 
Federal financial institution regulatory agencies or an entity acting 
in their behalf, upon receipt of a written request, in lieu of ruling 
on a petition for remission or mitigation.
    (6) Transfers to foreign governments. A Ruling Official may decline 
to grant remission to any petitioner other than an owner or lienholder 
so that forfeited assets may be transferred to a foreign government 
pursuant to 18 U.S.C. 981(i)(1); 19 U.S.C. 1616a(c)(2); or 21 U.S.C. 
881(e)(1)(E).
    (7) Filing by attorneys.
    (i) A petition for remission or mitigation may be filed by a 
petitioner or by that person's attorney or legal guardian. If an 
attorney files on behalf of the petitioner, the petition must include a 
signed and sworn statement by the client-petitioner stating that:
    (A) The attorney has the authority to represent the petitioner in 
this proceeding;
    (B) The petitioner has fully reviewed the petition; and
    (C) The petition is truthful and accurate in every respect.
    (ii) Verbal notification of representation is not acceptable. 
Responses and notification of rulings shall not be sent to an attorney 
claiming to represent a petitioner unless a written notice of 
representation is filed. No extensions of time shall be granted due to 
delays in submission of the notice of representation.
    (8) 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 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 paragraph (b)(22) of this 
section, 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 paragraph 
(b)(20), 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 remission must be transferred to the 
other petitioners, not the party filing the petition; although, as a 
matter of discretion, the Ruling Official may use the actual petitioner 
as an intermediary for transferring the amounts authorized as a 
remission to the other petitioners.
    5. Section 233.10 is reserved.


Sec.  233.10  [Reserved].

Stanley F. Mires,
Attorney, Legal Policy & Legislative Advice.
[FR Doc. 2012-4396 Filed 2-24-12; 8:45 am]
BILLING CODE 7710-12-P