Consolidation of Seizure and Forfeiture Regulations, 56093-56115 [2012-21943]

Agencies

• Drug Enforcement Administration
• Department of Justice

[Federal Register Volume 77, Number 177 (Wednesday, September 12, 2012)]
[Rules and Regulations]
[Pages 56093-56115]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-21943]



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Federal Register / Vol. 77, No. 177 / Wednesday, September 12, 2012 / 
Rules and Regulations

[[Page 56093]]



DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1316

DEPARTMENT OF JUSTICE

28 CFR Parts 8 and 9

[Docket No. OAG 127; AG Order No. 3343-2012]
RIN 1105-AA74


Consolidation of Seizure and Forfeiture Regulations

AGENCY: Drug Enforcement Administration, Department of Justice.

ACTION: Final rule.

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SUMMARY: Consistent with Executive Order 13563, by this rule the 
Department of Justice (the Department) revises, consolidates, and 
updates its regulations regarding the seizure, forfeiture, and 
remission of assets. The rule recognizes that as of 2002 the Bureau of 
Alcohol, Tobacco, Firearms, and Explosives (ATF) is now part of the 
Department, and consolidates the regulations governing the seizure and 
administrative forfeiture of property by ATF with those of the Drug 
Enforcement Administration (DEA) and the Federal Bureau of 
Investigation (FBI). The rule also conforms the seizure and forfeiture 
regulations of ATF, DEA, FBI, and the Department's Criminal Division to 
address procedural changes necessitated by the Civil Asset Forfeiture 
Reform Act (CAFRA) of 2000. The rule allows ATF, DEA, and FBI to 
publish administrative forfeiture notices on an official Internet 
government Web site instead of in newspapers. Lastly, the rule updates 
the regulations to reflect current forfeiture practice and clarifies 
the existing regulations pertaining to the return of assets to victims 
through the remission process.

DATES: Effective Date: This rule is effective October 12, 2012.

FOR FURTHER INFORMATION CONTACT: Beliue Risher, Editor, 1400 New York 
Avenue NW., Bond Building, Washington, DC 20530. Telephone: (202) 514-
1263.

SUPPLEMENTARY INFORMATION: On May 9, 2011, the Department of Justice 
(the Department) published for public comment proposed regulations 
implementing the Civil Asset Forfeiture Reform Act of 2000 (CAFRA) (76 
FR 26660). Before the comment period closed on July 8, 2011, the 
Department received comments from only two commenters. The comments and 
the Department's responses are discussed below in section III.

I. Executive Summary

    This rule complies with the requirement under Section 6 of 
Executive Order 13563 (Jan. 18, 2011) to modify and streamline outmoded 
and burdensome regulations. First, this final rule recognizes that the 
Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) is now part 
of the Department of Justice. On November 25, 2002, the President 
signed into law the Homeland Security Act (HSA) of 2002, Public Law 
107-296, 116 Stat. 2135. Section 1111 of the HSA established in the 
Department of Justice the ``Bureau of Alcohol, Tobacco, Firearms, and 
Explosives'' and generally transferred the law enforcement functions, 
and seizure and forfeiture authority, of the Bureau of Alcohol, 
Tobacco, and Firearms from the Department of the Treasury to the 
Department of Justice. This transfer became effective on January 24, 
2003. By this rule, the Department consolidates its regulations 
governing the seizure and administrative forfeiture of property by ATF, 
DEA, and the FBI. Among other things, this rulemaking identifies the 
scope of these regulations, updates definitions, identifies the scope 
of authority available to each of those seizing agencies to seize 
property for forfeiture, and provides procedures governing practical 
issues regarding the seizure, custody, inventory, appraisal, 
settlement, and release of property subject to forfeiture. See 
Sec. Sec.  8.1-8.7 of this rule.
    Second, the rule conforms the seizure and forfeiture regulations of 
ATF, DEA, FBI, and the Department's Criminal Division to address 
procedural changes necessitated by the Civil Asset Forfeiture Reform 
Act (CAFRA) of 2000, Public Law 106-185, 114 Stat. 202. The rule also 
incorporates CAFRA's innocent owner defense into the remission 
regulations. Where CAFRA is silent or ambiguous on a subject relating 
to administrative forfeiture procedure, the rule interprets CAFRA based 
on case law and agency expertise and experience.
    Third, the rule updates the regulations to conform to other 
authorities and current forfeiture practice. Thus, Sec.  8.14 adds a 
provision to the Department's regulations allowing for the pre-
forfeiture disposition of seized property when the property is liable 
to perish, or to waste, or to be greatly reduced in value while being 
held for forfeiture, or when the expense of holding the property is or 
will be disproportionate to its value. Section 8.11 clarifies that 
administrative and criminal judicial forfeiture proceedings are not 
mutually exclusive, and Sec.  8.16 affirms that the United States is 
not liable for attorney fees in any administrative forfeiture 
proceeding. Section 8.23 adds a provision defining the allowable 
redelegations of authority under the regulations. Section 8.9(a)(1) 
updates the forfeiture regulations by adding the option of publishing 
notice for administrative forfeitures on an official government 
Internet site instead of in a newspaper.
    Fourth, the rule amends the list of designated officials at 28 CFR 
part 9 governing petitions for remission or mitigation of forfeiture, 
clarifies the existing regulations pertaining to victims, and makes 
remission available to third parties who reimburse victims under an 
indemnification agreement.

II. Statement of Need

    Consistent with Executive Order 13563, this rule is needed to 
ensure that the Department's seizure and forfeiture regulations 
accurately reflect the current composition of the Department, the 
current state of the law, and current practices and procedures relating 
to the seizure, forfeiture, and remission of assets. Specifically, the 
rule is necessary to recognize ATF as part of the Department and to 
bring clarity to the regulatory framework by consolidating the ATF, 
DEA, and FBI regulations governing the seizure and

[[Page 56094]]

administrative forfeiture of property. The rule is also needed to 
conform the regulations with the changes to seizure and forfeiture law 
included in CAFRA, which has rendered many of the existing regulations 
obsolete. Finally, this rule is necessary to reflect current forfeiture 
practice and to clarify the existing regulations pertaining to victims 
and the remission process.

III. Discussion

A. Consolidation of the Regulations Governing the Seizure and 
Forfeiture of Property by ATF, DEA, and FBI

    Consolidating the forfeiture regulations used by ATF (formerly 27 
CFR part 72), DEA (21 CFR part 1316, subparts E and F), and FBI (28 CFR 
part 8 and 21 CFR part 1316, subparts E and F) will achieve greater 
consistency within the Department and will promote overall fairness by 
helping ensure that the administrative forfeiture process is governed 
by uniform procedures.
    The final rule removes 21 CFR part 1316, subparts E and F and 
replaces them by adding an amended 28 CFR part 8 governing the seizure 
and forfeiture of property by each agency. Part 8 is divided into 
subparts A, B, and C. Subpart A contains generally applicable 
provisions for seizures and forfeitures by ATF, DEA, and FBI. Subpart B 
contains expedited procedures for property seized by DEA and FBI for 
violations involving personal use quantities of a controlled substance. 
Subpart C includes the permitted redelegations of authority under these 
regulations.
    However, this consolidation does not constitute the entirety of the 
Department's forfeiture regulations. ATF continues to enforce and 
administer the provisions of the National Firearms Act (NFA), ch. 757, 
48 Stat. 1236 (1934) (codified at 26 U.S.C. ch. 53). Pursuant to 18 
U.S.C. 983(i)(2), Internal Revenue Code forfeitures, including NFA 
forfeitures, are not subject to CAFRA's procedural requirements. NFA 
civil forfeiture procedure is governed, for the most part, by the 
Customs laws (19 U.S.C. 1602-1618), including the notice and cost bond 
requirements. In addition, pursuant to the Customs laws, the 
Government's initial burden of proof in an NFA civil forfeiture is to 
demonstrate probable cause to believe that the property is forfeitable. 
See 19 U.S.C. 1615. Further, there is no innocent ownership defense to 
forfeiture under the NFA. However, NFA forfeitures are subject to 
CAFRA's attorney fees requirement.

B. CAFRA Procedural Changes Incorporated in the Final Rule

    The rule incorporates CAFRA's modifications to the general rules 
for civil forfeiture proceedings, see 18 U.S.C. 983, by making certain 
changes to the administrative forfeiture process, including the 
procedures relating to notice of seizure, filing of claims, hardship 
requests, and releases of property.
    Notice of seizure. Section 983(a)(1) establishes deadlines and 
procedures for sending personal written notices of seizures to parties 
with a potential interest in the property. These deadlines and 
procedures are in addition to, and in some respects different from, the 
deadlines and procedures under the Customs laws. The forfeiture 
procedures under Customs laws (19 U.S.C. 1602-1618), which are 
incorporated by reference ``insofar as applicable'' in forfeiture 
statutes enforced by the Department of Justice (e.g., 21 U.S.C. 
881(d)), require that ``[w]ritten notice of seizure together with 
information on the applicable procedures shall be sent to each party 
who appears to have an interest in the seized article.'' 19 U.S.C. 
1607(a). CAFRA, as codified at 18 U.S.C. 983(a)(1), requires that 
notice be sent within 60 days of seizure, or within 90 days of a 
seizure by a state or local agency, or within 60 days of establishing 
the interested party's identity if it is not known at the time of 
seizure. CAFRA also provides that a supervisory official of the seizing 
agency may grant a single 30-day extension if certain conditions are 
satisfied and that extensions thereafter may only be granted by a 
court. Section 8.9 of the rule incorporates these notice-related 
provisions of CAFRA.
    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 and differs in several respects from Customs laws. 
Under the Customs laws applicable to Department of Justice forfeitures, 
a claimant to property subject to forfeiture has 20 days after the 
first published notice of seizure to contest the administrative 
forfeiture by filing 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. 
Section 983(a)(2) also changes the deadlines for filing claims to 
contest the forfeiture. Persons not receiving a notice letter must file 
a claim within 30 days after the date of the final published notice. 
Those who do receive a personal notice letter may file claims until the 
deadline provided in the letter, which must be at least 35 days after 
the date the letter was mailed. Section 983(a)(2) also adds provisions 
specifying the information required for a valid claim. It reflects the 
amendments to 18 U.S.C. 983(a)(2)(C)(ii) in the Paul Coverdell National 
Forensic Sciences Improvement Act of 2000, Public Law 106-561, 114 
Stat. 2787, which retroactively deleted CAFRA's original requirements 
that claimants provide with their claims documentary evidence 
supporting their interest in the seized property and state that their 
claims are not frivolous. Consequently, pursuant to section 21 of CAFRA 
(establishing CAFRA's effective date), the amended section 
983(a)(2)(C)(ii) applies to any forfeiture proceeding commenced on or 
after August 23, 2000. Section 8.10 of the rule incorporates these 
section 983(a)(2) changes to the claim procedures for an administrative 
forfeiture.
    Release of seized property if forfeiture is not commenced. Section 
8.13 of the rule provides procedures to implement 18 U.S.C. 983(a)(3). 
Section 983(a)(3) requires the release of seized property pursuant to 
regulations promulgated by the Attorney General and prohibits the 
United States from pursuing further action for civil forfeiture if the 
United States does not institute judicial forfeiture proceedings 
against the property within 90 days after an administrative claim has 
been filed and no extension of time has been obtained from a court.
    Hardship request. Section 8.15 of the rule implements 18 U.S.C. 
983(f), which provides procedures and criteria for the release of 
seized property (subject to certain exceptions) pending the completion 
of judicial forfeiture proceedings when a claimant's request for such 
release establishes that continued government custody will cause 
substantial hardship that outweighs the risk that the property will not 
remain available for forfeiture.
    Expedited release of property. Subpart B (Sec. Sec.  8.17 through 
8.22) incorporates and amends, to the extent required by CAFRA, the 
pre-existing regulations for expedited forfeiture proceedings for 
certain property. The pre-existing regulations, 21 CFR part 1316, 
subpart F, provided expedited procedures for conveyances seized for 
drug-related offenses and property seized for violations involving 
personal use quantities of a controlled substance. By repealing 21 
U.S.C. 888 (expedited procedures for seized conveyances), CAFRA 
eliminated the statutory basis

[[Page 56095]]

for the expedited procedure regulations pertaining to drug-related 
conveyance seizures. Accordingly, Sec. Sec.  8.17 through 8.22 omit the 
21 CFR part 1316, subpart F provisions applicable to drug-related 
conveyance seizures. The remaining provisions apply only where property 
is seized for administrative forfeiture involving controlled substances 
in personal use quantities.
    Remissions and mitigations. For consistency with CAFRA's uniform 
innocent owner defense, 18 U.S.C. 983(d), the rule incorporates the 
innocent owner provisions of sections 983(d)(2)(A) and 983(d)(3)(A) in 
a new 28 CFR 9.5(a)(l).
    Forfeitures affected by CAFRA and the final 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 
statutes listed in 18 U.S.C. 983(i): The Tariff Act of 1930 or any 
other provision of law codified in title 19; the Internal Revenue Code 
of 1986; the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et 
seq.); the Trading with the Enemy Act (50 U.S.C. App. 1 et seq.) or the 
International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.); 
or section 1 of title VI of the Act of June 15, 1917 (22 U.S.C. 401). 
The final rule similarly applies to all forfeitures administered by the 
Department with the exception of seizures and forfeitures under the 
statutes listed in 18 U.S.C. 983(i). The authority of seizing agencies 
to conduct administrative forfeitures derives from the procedural 
provisions of the Customs laws where those provisions are incorporated 
by reference in the substantive forfeiture statutes enforced by the 
agencies.

C. Changes to the Previous Regulations Governing the Seizure and 
Forfeiture of Property by ATF, DEA, and FBI

    Pre-forfeiture disposition. The provision providing for the pre-
forfeiture disposition of seized property, Sec.  8.14, implements the 
authority of 19 U.S.C. 1612(b), which is one of the procedural Customs 
statutes incorporated by reference into the forfeiture statutes 
enforced by the Department. Section 1612(b) authorizes pre-forfeiture 
disposal of seized property, pursuant to regulations, when the property 
is liable to perish or to waste, or to be greatly reduced in value 
during its detention for forfeiture, or when the expense of keeping the 
property pending forfeiture is or will be disproportionate to the 
property's value. The rule enables the Department to use the authority 
of section 1612(b) in appropriate cases.
    Internet publication. The rule updates the forfeiture regulations 
by adding, in Sec.  8.9(a)(1)(ii), a provision for the publication of 
administrative forfeiture notices on an official government Internet 
site instead of in newspapers. The statute governing the publication of 
notice in administrative forfeiture proceedings, 19 U.S.C. 1607, does 
not require a specific means of publication. Section 8.9(a)(1)(ii) will 
provide ATF, DEA, and FBI with the choice to use the official Internet 
government forfeiture site, currently www.forfeiture.gov, to publish 
notice of administrative forfeiture proceedings for no cost as an 
alternative to the newspaper publication provided for in Sec.  
8.9(a)(1)(i). This grant of authority to the agencies parallels a 
similar grant of authority in Rule G(4)(a)(iv)(C) of the Supplemental 
Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions.
    Pursuant to Rule G(4)(a)(iv)(C), in all civil judicial forfeitures, 
the Government may give public notice through the Internet rather than 
in a newspaper. Section 8.9(a)(1)(ii) will permit the Department of 
Justice agencies to likewise use the official government Web site, 
currently www.forfeiture.gov, to provide notice in administrative 
forfeitures, a cost savings that is particularly important as the 
volume of administrative forfeitures is much greater than judicial 
forfeitures. There is strong statistical proof that Internet access is 
now available to the vast majority of United States residents. Internet 
access continues to grow, while newspaper circulation is declining, and 
in some markets, the option to publish in a traditional newspaper may 
not be available in the future.

D. Regulations at 28 CFR Part 9 Governing the Remission or Mitigation 
of Forfeitures

    The final rule includes modifications to the regulations governing 
the remission or mitigation of forfeiture at 28 CFR part 9. Section 
9.3(e)(2) is revised by listing DEA's ``Forfeiture Counsel'' as the 
pertinent official in DEA forfeiture cases, by deleting references to 
ATF's ``Special Agent in Charge, Asset Forfeiture and Seized Property 
Branch,'' and referring instead to ATF's ``Office of Chief Counsel, 
Forfeiture Counsel,'' as the pertinent official in ATF forfeiture 
cases, and by updating the addresses for both DEA and ATF. Section 9.1 
changes the designation of the official within ATF to whom authority to 
grant remission and mitigation has been delegated.
    Second, the definition of ``victim'' in Sec.  9.2 is modified to 
make remission available to qualified third parties who reimburse a 
victim pursuant to an indemnification agreement. In addition, Sec.  9.8 
is modified to specify the procedures applicable to persons seeking 
remission as victims.

E. Summary of the Impact of the 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 at least 35 days from the date of 
mailing, and if the personal notice is sent but not received, an owner 
has 30 days from the date of final publication of notice of the 
seizure, to file a claim with the agency. In addition, the notice 
provision in Sec.  8.9(a)(1)(ii) was updated to allow the agencies to 
publish administrative forfeiture notices on the Internet instead of in 
newspapers, consistent with the procedure for civil judicial 
forfeitures under Rule G(4)(a)(iv)(C).
    The filing of a valid claim compels the agency to refer the matter 
to the U.S. Attorney. To preserve the option to seek civil judicial 
forfeiture, the U.S. Attorney must do one of the following within 90 
days: (1) Commence a civil judicial forfeiture action against the 
seized property; (2) obtain an indictment alleging the property is 
subject to criminal forfeiture; (3) obtain a good cause extension of 
the deadline from the district court; or (4) return the property 
pending the filing of a complaint. If the Government fails to take any 
of these steps within the statutory deadline, it must promptly release 
the property and is barred from taking any further action to civilly 
forfeit the property in connection with the underlying offense.
    Prior to CAFRA, claims in an administrative forfeiture required an 
accompanying bond of either $5,000 or 10 percent of the value of the 
seized

[[Page 56096]]

property, whichever was lower. Section 983(a)(2) eliminated the bond 
requirement, in forfeitures covered by CAFRA, to give the property 
owner greater access to federal court. However, to prevent frivolous 
claims, CAFRA requires the claimant to state the basis for his or her 
interest in the property in the claim under oath.
    Under CAFRA, claimants also have a right to petition for immediate 
release of seized property on grounds of hardship with a 30-day 
deadline on judicial resolution of such petitions. Section 983(f)(7) 
provides that if the court grants a petition, it may also enter any 
order necessary to ensure that the value of the property is maintained 
during the pendency of the forfeiture action, including permitting 
inspection, photographing, and inventory of the property, fixing a bond 
pursuant to Rule E(5) of the Supplemental Rules for Certain Admiralty 
or Maritime Claims, or requiring the claimant to obtain or maintain 
insurance on the property. It also provides that the Government may 
place a lien or file a lis pendens on the property.
    It is important to note that CAFRA's deadlines apply only to civil 
forfeiture actions initiated by commencement of an administrative 
proceeding under section 983(a) and do not apply to actions commenced 
solely as civil judicial forfeitures. However, the vast majority of 
civil forfeitures are handled administratively.
    CAFRA changed the procedures for the expedited release of 
conveyances and property seized for drug offenses to apply only where 
property is seized for administrative forfeiture involving personal use 
quantities of a controlled substance.
    Although CAFRA enacted a provision granting attorney fees to 
substantially prevailing parties in civil judicial forfeitures, the 
regulations make it clear that the United States is not liable for 
attorney fees or costs in administrative forfeiture proceedings, even 
if the matter is referred to the U.S. Attorney and the U.S. Attorney 
declines to initiate a judicial forfeiture on the property. See Sec.  
8.16.
    In addition to implementing these CAFRA reforms, the new 
regulations authorize the destruction, sale, or other disposition of 
seized property prior to forfeiture whenever it appears that the 
property is liable to perish or to waste, or to be greatly reduced in 
value during its detention for forfeiture, or that the expense of 
keeping the property is or will be disproportionate to its value. See 
Sec.  8.14. This disposition must be authorized by the appropriate 
official of the seizing agency. The regulations also specify that the 
seizing agency must promptly deposit any seized U.S. currency into the 
Seized Asset Deposit Fund pending forfeiture. See Sec.  8.5. There is 
an exception for currency that must be retained because it has a 
significant, independent, tangible evidentiary purpose. See Sec.  
8.5(b).
    The final rule also changes some of the procedures relating to 
crime victims in 28 CFR part 9. The definition of victim is modified to 
make remission available to qualified third parties who reimburse a 
victim pursuant to an insurance or other indemnification agreement. See 
Sec.  9.2(w). In addition, Sec.  9.8 is reorganized and a new paragraph 
(a) is added to specify the filing procedures applicable to persons 
seeking remission as victims. Section 9.8(i) clarifies that the amount 
of compensation available to a particular victim may not exceed the 
victim's share of the net proceeds of the forfeiture associated with 
the activity that caused the victim's loss. In other words, a victim is 
not entitled to full compensation, but only the amount of compensation 
available from the forfeited property. In addition, the new rule makes 
the statutory innocent owner provisions at 18 U.S.C. 983(d)(2)(A) and 
(d)(3)(A) applicable to all owner and lienholder petitions for 
remission.

IV. Public Comments

    The Department received two comments on the rule. One comment was a 
general statement of support for the rule. The other comment came from 
a group of four organizations representing numerous American newspapers 
(collectively, ``Newspaper Group''). The Newspaper Group objected to 
Sec.  8.9 (``Notice of administrative forfeiture''), which consolidates 
seizure and forfeiture regulations for ATF, DEA, and FBI. Specifically, 
the Newspaper Group objected to Sec.  8.9(a)(1), which permits the 
seizing agency to provide public notice of an administrative forfeiture 
proceeding by publishing notice either on an official government 
Internet site for at least 30 consecutive days, or once a week for at 
least three successive weeks in a newspaper of general circulation in 
the judicial district where the property was seized. The Newspaper 
Group maintained that ``any Internet notice is an inadequate substitute 
for a printed, fixed newspaper notice'' and therefore opposed 
authorizing agencies to publish notice of administrative forfeiture 
proceedings on an official government forfeiture Web site as an 
alternative to traditional newspaper publication.
    The Department has reviewed and considered the Newspaper Group's 
comment and has decided not to make any changes to the proposed rule. 
The following is a summary of the Newspaper Group's points and the 
Department's response to each one.
    Comment: The overarching theme of the Newspaper Group's comment is 
that giving the Department the option of publishing notice of 
administrative forfeiture proceedings on the Internet, as opposed to in 
newspapers, will disenfranchise property owners, particularly those who 
the Newspaper Group believes may not have ready Internet access.
    Response: The Newspaper Group's comment makes passing mention of 
the fact that for several years the Department has been using the 
Internet to afford public notice of ``other forfeiture notices from 
other federal agencies.'' This is, however, a point worthy of emphasis 
at the outset.
    Civil judicial forfeitures have been governed, since December 1, 
2006, by Rule G of the Supplemental Rule for Admiralty or Maritime 
Claims and Asset Forfeiture Actions, Federal Rule of Civil Procedure 
(``Supplemental Rule G''). Since its inception, Supplemental Rule 
G(4)(A)(iv)(C) has provided two alternative means of affording public 
notice of civil judicial forfeitures: (1) Publication once a week for 
three consecutive weeks in a newspaper of general circulation in the 
district in which the forfeiture action is filed or (2) posting notice 
of the forfeiture on an official government forfeiture Web site for at 
least 30 consecutive days. The official government Internet Web site 
for posting notices of civil judicial forfeitures, www.forfeiture.gov, 
became operational in December 2007.
    In criminal forfeiture cases, post-conviction notices of forfeiture 
are published according to the provisions of Rule 32.2 of the Federal 
Rules of Criminal Procedure, in conjunction with section 853(n)(1) of 
title 21, United States Code. Rule 32.2 was amended effective December 
1, 2009, to incorporate by reference the aforementioned notice 
provisions of Supplemental Rule G. See Fed. R. Crim. P. 32.2(b)(6)(C). 
Since then, criminal forfeiture notices also have been posted on 
www.forfeiture.gov, thereby providing free public access to notices of 
all judicial forfeitures, civil and criminal. The success of 
www.forfeiture.gov is confirmed by impressive levels of usage; from 
2007 to July 2011, 72,007 individuals (based on unique IP addresses) 
visited the Web site, and the total number of visits was 158,086. For 
nearly five years, therefore,

[[Page 56097]]

the Internet has served as an effective and cost-efficient means of 
providing public notice of thousands of federal civil and criminal 
judicial forfeiture proceedings.
    Comment: The Newspaper Group's comment asserts that ``[t]he point 
of public notice is to put information where people not necessarily 
looking for it are likely to find it.''
    Response: The Supreme Court has held that, in providing public 
notice of administrative forfeiture proceedings, due process requires 
only that ``the Government's effort be `reasonably calculated' to 
apprise a party of the pendency of the action.'' Dusenbery v. United 
States, 534 U.S. 161, 170 (2002) (quoting Mullane v. Central Hanover 
Bank & Trust Co., 339 U.S. 306, 315 (1950)). Although Dusenbery 
involved direct notice of an administrative forfeiture, the same due 
process standard applies to published notice as well. See, e.g., United 
States v. Young, 421 Fed. Appx. 229, 231, 2011 WL 1206664 (3d Cir. Apr. 
11, 2011).
    The statute governing notices of administrative forfeiture requires 
only that ``notice of the seizure * * * and the intention to forfeit * 
* * be published for at least three consecutive weeks in such manner as 
the [Attorney General] may direct.'' 19 U.S.C. 1607(a) (incorporated by 
reference and made applicable to the Attorney General in statutes such 
as 18 U.S.C. 981(d) and 21 U.S.C. 881(d)). The statute does not require 
a specific means of publication. The means historically selected by the 
Attorney General required that notices of administrative forfeiture be 
published ``once a week for at least three successive weeks in a 
newspaper of general circulation in the judicial district in which the 
[proceeding] for forfeiture is brought.'' See, e.g., 21 CFR 1316.75(a). 
This was, throughout most of the 20th century, a standard ``reasonably 
calculated'' to provide notice to interested parties, notwithstanding 
the fact that many interested parties might be far removed from the 
district in question, perhaps even in a foreign nation, and without 
ready access to American newspapers of general circulation.
    The Department believes that in the Internet era, continued 
adherence to newspaper noticing alone places a burden on persons 
desirous of receiving notice, including, but certainly not limited to: 
members of our Armed Forces serving in foreign lands; other persons 
residing in foreign countries; incarcerated persons or those confined 
long-term to health care facilities wherever located; or anyone with 
Internet access but far removed from outlets carrying up-to-date 
American newspapers of general circulation. By contrast, Internet 
publication will allow for continuous access to administrative 
forfeiture notices for at least 30 days on a Web site that may easily 
be found by, for example, using the term ``United States forfeiture'' 
on a search engine. Given the current state of technology, the 
Department believes that this practice is far more ``reasonably 
calculated'' to provide public notice of forfeiture proceedings to all 
interested persons, whatever their circumstances and wherever they 
might be located.
    Comment: The Newspaper Group's comment assumes that notice of 
administrative forfeitures will be posted only on the Web site of the 
law enforcement agency that seized the subject property. Based on this 
assumption, the comment highlights the alleged deficiencies of using a 
seizing agency Web site for such purposes, and concludes that 
``[n]ewspapers are a better choice for public notice given their much 
broader reach.''
    Response: The assumption that the Department will publish notices 
of administrative forfeiture proceedings on seizing agency Web sites is 
incorrect. The rule authorizes notice on ``an official internet 
government forfeiture site,'' which mirrors the language that 
authorizes Internet notice under Supplemental Rule G, discussed supra. 
As with existing judicial forfeiture notices, administrative forfeiture 
notices will be posted on www.forfeiture.gov, the ``official internet 
government forfeiture site'' that is dedicated to providing notice of 
federal forfeiture proceedings. Therefore, the comment's line of 
argument about the alleged superiority of newspapers over individual 
seizing agency Web sites is inapposite. Nonetheless, the Department 
believes the comparative advantages of the Internet as opposed to 
newspapers in providing public notice of forfeiture proceedings should 
be addressed more broadly.
    The Department, as noted, has had the option of publishing notice 
of civil judicial forfeitures through the Internet since Supplemental 
Rule G became effective in 2006. Supplemental Rule G was drafted by the 
Advisory Committee on Civil Rules (``Committee''), a group composed of 
federal and state judges, private and government attorneys, and law 
professors, that is responsible for considering and drafting amendments 
to the Federal Rules of Civil Procedure, including the Supplemental 
Rules.\1\
---------------------------------------------------------------------------

    \1\ The Rules Enabling Act, 28 U.S.C. 2071-2077, authorizes the 
Supreme Court to prescribe general rules of practice and procedure 
for the federal courts. Under the Act, the Judicial Conference, a 
body of federal judges convened by the Chief Justice of the United 
States pursuant to 28 U.S.C. 331, must appoint a Standing Committee 
and may appoint advisory committees to recommend new and amended 
procedural rules. See 28 U.S.C. 2073(b). The Advisory Committees 
currently appointed consist of the Advisory Committees on the Rules 
of Appellate, Bankruptcy, Civil Procedure, Criminal Procedure, and 
Evidence. New and amended procedural rules recommended by the 
Advisory Committees are submitted through the Standing Committee to 
the United States Supreme Court and then from the Court to the 
Congress. See 28 U.S.C. 2074(a). If the Congress does not act on the 
proposed procedural rules, they become effective on December 1 of 
the year in which they were submitted. Id.
---------------------------------------------------------------------------

    The Committee began work on Supplemental Rule G in 2003.\2\ Even 
then, the limitations of newspaper publication and the promise of 
Internet publication were readily apparent to the Committee. In the 
Advisory Committee Note to Rule G, the Committee observed:

    \2\ See Report of Civil Rules Advisory Committee, 3 (Dec. 16, 
2003), available at https://www.uscourts.gov/uscourts/RulesAndPolicies/rules/Reports/CV12-2003.pdf.
---------------------------------------------------------------------------

    Newspaper publication is not a particularly effective means of 
notice for most potential claimants. Its traditional use is best 
defended by want of affordable alternatives. Paragraph 
[(4)(a)](iv)(C) [of Supplemental Rule G] contemplates a government-
created internet forfeiture site that would provide a single easily 
identified means of notice. Such a site would allow much more direct 
access to notice as to any specific property than publication 
provides.\3\
---------------------------------------------------------------------------

    \3\ See Report of Civil Rules Advisory Committee, 92 (May 17, 
2004), available at https://www.uscourts.gov/uscourts/RulesAndPolicies/rules/Reports/CV5-2004.pdf; see also Fed. R. Civ. 
P. Supp. R. G Advisory Committe's Note.

    Ultimately, the Committee's proposed version of Supplemental Rule 
G(4)(a)(iv) authorizing use of the Internet for publishing public 
notice of civil judicial forfeiture proceedings, and the Advisory 
Committee Note pertaining thereto, were embodied verbatim in the 
official version that was approved by the Supreme Court and the 
Congress and became effective on December 1, 2006.
    In devising Supplemental Rule G, the Committee acknowledged that 
the Internet, by its nature, offers far greater access to forfeiture 
notices than newspapers. Once an Internet connection is established, 
every single user anywhere in the world, at any time of day, has the 
ability to access federal forfeiture notices online. The same cannot be 
said of notice published through a single newspaper, the reach of which 
is limited numerically to the amount of people who read a given edition 
and geographically by circulation limitations. Indeed, the statistic 
cited in the Newspaper Group's comment that nearly 100 million adults 
read a newspaper on an average

[[Page 56098]]

weekday is irrelevant for present purposes, as it reflects the total 
readership of all newspapers combined, which is not the equivalent of 
100 million people having access to notices published through a single 
newspaper.
    Supplemental Rule G was also drafted against the backdrop of a 
dramatic rise in Internet usage coinciding with a precipitous decline 
in newspaper circulation. Since 2003, these trends have only 
accelerated. The most recent and comprehensive analysis of Internet 
penetration is Digital Nation--Expanding Internet Usage, published by 
the U.S. Department of Commerce, National Telecommunications & 
Information Administration, in February 2011.\4\ Statistics from this 
report show that ``an estimated 209 million Americans--about 72% of all 
adults and children aged three years and older--use the internet 
somewhere, whether at home, the workplace, schools, libraries, or a 
neighbor's house.'' Digital Nation at 28 (emphasis omitted). This 
represents an increase from 68.4% (197.9 million) in 2009. Id. at 17. 
Internet use through libraries is particularly important, as it 
provides the most widespread availability of free and regular Internet 
access to the general public. The American Library Association's Public 
Library Funds & Technology Access Study (2010-2011) reports that 99.3% 
of public libraries offer public access to computers and the 
Internet.\5\ According to a study by the University of Washington, a 
third of Americans 14 and older, or about 77 million people, use public 
library computers.\6\
---------------------------------------------------------------------------

    \4\ U.S. Department of Commerce, Digital Nation--Expanding 
Internet Usage (Digital Nation), available at https://www.ntia.doc.gov/files/ntia/publications/ntia_internet_use_report_february_2011.pdf.
    \5\ John Carlo Bertot, et al., Libraries Connect Communities: 
Public Library Funding & Technology Access Study 2010-2011 
(Libraries Connect Communities), at 3, available at https://viewer.zmags.com/publication/857ea9fd.
    \6\ Samantha Becker, et al., Opportunity for All: How the 
American Public Benefits from Internet Access at U.S. Libraries 
(Opportunity for All), at 32, available at https://impact.ischool.washington.edu/documents/OPP4ALL_FinalReport.pdf.
---------------------------------------------------------------------------

    As Internet use has expanded, the circulation of printed newspapers 
has continued to decline. According to The State of the News Media 
2011, a report issued by the Pew Research Center's Project for 
Excellence in Journalism, daily circulation of U.S. newspapers has 
declined 30% in the last 10 years, from 62.3 million in 1990 to 43.4 
million in 2010.\7\ This negative trend is reflected by national papers 
such as USA Today, which in just the past two years has seen its 
circulation decline by 460,000, and by big-city metro newspapers such 
as the Newark Star Ledger and the San Francisco Chronicle, each of 
which lost about a third of its daily circulation over the same period. 
Id. at 9.
---------------------------------------------------------------------------

    \7\ Pew Research Center, The State of the News Media 2011, at 8, 
available at https://stateofthemedia.org/2011/newspapers-essay/data-page-6.
---------------------------------------------------------------------------

    In addition to enhanced accessibility and reach, another factor in 
favor of publishing forfeiture notices through the Internet is cost. 
The Advisory Committee that drafted Supplemental Rule G advised in the 
note pertaining to subpart (4)(a) that, in choosing between newspapers 
and the Internet as the means for providing public notice, the 
Government ``should choose * * * a method that is reasonably likely to 
reach potential claimants at a cost reasonable in the circumstances.'' 
Fed. R. Civ. P. Supp. R. G Advisory Committee's Note (2006) (emphasis 
added). Currently, according to the Department's Justice Management 
Division, the Department pays between $10,000 and $12,000 per day in 
noticing costs to newspapers. Alternatively, publishing those same 
notices on www.forfeiture.gov, a fully operational Web site, would be 
of little to no additional cost to the Government.
    Comment: The Newspaper Group's comment predicts that transitioning 
from newspapers to the Internet as a means of providing public notice 
of administrative forfeiture proceedings will disenfranchise the 
following groups: key stakeholders, fractional property stakeholders, 
the poor, rural residents, minorities, senior citizens, the disabled, 
and the ill.
    Response: The Department is sensitive to this concern but does not 
agree that using the Internet to provide public notice of 
administrative forfeiture proceedings will adversely affect these 
groups.
    Before addressing the substance of this particular comment, it is 
important to note two critical points to place the Department's 
response in the appropriate context. First, the public notice 
authorized by Sec.  8.9(a) will be in addition to the personal written 
direct notice that must be provided, generally by mail, directly to 
every person known to the Government who appears to have an interest in 
the property to be forfeited. See Sec.  8.9(b); see also 19 U.S.C. 
1607(a). Thus, the relevant category of people in the groups identified 
in the comment is limited only to those individuals who have an 
interest in the seized property unknown to the Government, or to those 
who have an interest known to the Government, but for whom the 
Government lacks accurate contact information. Only these individuals 
will have to rely on public notice. All other owners--those with known 
interests and contact information--will receive personal written notice 
of the forfeiture proceedings. Second, the proposed regulation affords 
the Government the option of using the Internet to provide public 
notice of administrative forfeiture proceedings. If the Government has 
reason to anticipate that Internet publication may not be effective in 
a given case, it retains the option of simultaneously publishing notice 
in a newspaper.

Key stakeholders

    Comment: The comment identifies prisoners and frequent travelers as 
``key stakeholders'' whose interests allegedly would not be served by 
Internet notice, instead of newspaper notice, of administrative 
forfeiture proceedings.
    Response: Like anyone else, prisoners who are known by the 
Government to have an interest in any seized property are entitled to 
personal written notice from the Government of any federal forfeiture 
proceedings against the property. Moreover, if a prisoner's interest in 
property subject to forfeiture is not known to the Government, there is 
nothing to guarantee under the current regulations that the prisoner 
will have access to the few newspapers of general circulation that 
publish forfeiture notices. The Newspaper Group's comment acknowledges 
that prisoners lack access to newspapers, but maintains that news of 
the forfeiture could be provided to them through someone the prisoner 
knows who sees the notice in a local newspaper. The Department believes 
that it is unlikely that a significant number of prisoners currently 
receive forfeiture notices in this fashion, as it would require someone 
who knows of the prisoner's interest in the property to come across a 
forfeiture notice of personal property in the correct newspaper of 
general circulation, to recognize, from both the property description 
and the date and place of seizure, that the notice pertains to the 
prisoner's property, and then to convey this information to the 
prisoner. The Department does not believe that such a scenario will 
become significantly less likely to transpire if the notice of the 
forfeiture is published on the Internet.
    For similar reasons, the Department does not believe that a 
traveling property stakeholder will be disadvantaged by this change in 
noticing practice. The accessibility of general circulation U.S. 
newspapers is quite limited outside the United States, whereas Internet 
access to the Federal Government's Internet forfeiture site is readily 
available in most parts of the world. If the Government is unaware of

[[Page 56099]]

a stakeholder's interest in property and thus does not provide personal 
written notice to the stakeholder, the most likely source for conveying 
news of the seizure to the stakeholder would be an associate of the 
stakeholder who knows of both the seizure and the stakeholder's 
ownership interest. After being alerted of the seizure, it should be 
easier for the traveling stakeholder to find Internet access than to 
find and purchase the correct daily issue of a particular U.S. 
newspaper.

Fractional property stakeholders

    Comment: The Newspaper Group's comment asserts that the ``rights of 
a co-owner may not be clear to the seizing agency, and the malfeasance 
of the property holder may not be clear to minority owners, divorced 
spouses, unregistered lien holders and others who might not be reached 
by any personal notice.''
    Response: All persons, including fractional property stakeholders, 
whose interest in seized property is known to the Government, are 
entitled to personal notice of administrative forfeiture proceedings. 
In those cases in which a fractional property stakeholder is not known 
to the Government, the Newspaper Group contends that those individuals 
are more likely to learn of the forfeiture proceedings through 
newspaper rather than Internet notice. But even if such a contention 
could be verified, the Government is not required to provide the most 
effective notice, only one ``reasonably calculated'' to apprise a party 
of the pendency of the action. See Dusenbery, 534 U.S. at 170.

The Poor

    Comment: The comment maintains that the proposed rule would require 
property stakeholders to have basic technical skills and access to a 
costly computer, thus adversely affecting the poor.
    Response: As previously noted, Internet access is widely available 
even for those who do not own a computer. Also, the statistics cited 
above suggest that finding the right newspaper on the specific dates a 
particular notice is published may be even more difficult and unlikely 
to provide greater access to the notice for such property stakeholders, 
regardless of whether they own a computer or possess the required 
technical skills. According to a 2010 University of Washington study, 
those living below the poverty line had the highest use of library 
computers, with 44% having reported using public library computers for 
Internet access during the previous year. Opportunity for All, supra 
n.6, at 2. Further, it seems unreasonable to assume that individuals 
too poor to own a computer will nonetheless have the resources to 
subscribe to, or purchase at retail, a newspaper of general 
circulation, such as The Wall Street Journal, until they obtain an 
issue containing the forfeiture notice for the property in which they 
have an interest.
    Comment: Newspapers may be written in time-honored basic news 
language, not legalese.
    Response: Forfeiture notices currently posted on www.forfeiture.gov 
use the same language as those in newspapers.
    Comment: Newspapers ``may be written in Spanish or German or 
Swahili to address a specific non-English-speaking community.''
    Response: Non-English newspapers are not newspapers of ``general 
circulation'' in the United States and thus cannot be used to publish 
forfeiture notices.

Rural Areas

    Comment: Statistics show that ``many rural areas use dial-up 
connections because broadband is unavailable.''
    Response: Dial-up, though it may be slower than other means of 
connectivity, still provides access to the Internet. Furthermore, the 
Digital Nation study cited previously notes that the ``urban-rural gap 
in Internet use anywhere receded from 4.4 percentage points (69.3% 
versus 64.9%) in 2009, to 3.6 percentage points (72.4% versus 68.8%) in 
2010.'' See Digital Nation, supra n.4, at 17. There is reason to expect 
this trend to continue as rural areas lacking ``meaningful internet 
service'' should benefit from recent federal initiatives to expand 
broadband Internet access in rural areas, including over $3.5 billion 
in awards under the Broadband Initiatives Program (funded by the 
American Recovery and Reinvestment Act of 2009), as well as ongoing 
rural broadband loan programs administered by the U.S. Department of 
Agriculture's Rural Utilities Service.\8\
---------------------------------------------------------------------------

    \8\ See Rural Utilities Service, Satellite Awards, Broadband 
Initiatives Program, available at https://www.rurdev.usda.gov/Publications/BIPSatelliteFactSheet10-20-10.pdf.
---------------------------------------------------------------------------

Minorities, Senior Citizens, the Disabled, the Ill

    Comment: The Newspaper Group asserts that ``[s]urvey after survey 
has shown that particular classes will be disenfranchised if notices 
are solely placed on internet sites because certain classes are less 
likely to have access to the internet.''
    Response: With respect to minorities, senior citizens, the 
disabled, and the ill, the same general themes apply: The Internet 
offers greater accessibility to public administrative forfeiture 
notices than newspapers of general circulation for such individuals and 
their associates and thus increases the likelihood that affected 
individuals in these groups will be notified of a seizure in which they 
have an interest. While average use of the Internet by these groups may 
be lower than it is by other groups, it does not follow that they will 
be ``disenfranchised'' if administrative forfeiture notices are 
published only through the Internet, and the comment does not point to 
information that says otherwise. But even if the Newspaper Group's 
conclusions could be verified, that would not alter the fact that the 
Government is not required to provide the most effective notice, only 
one ``reasonably calculated'' to apprise a party of the pendency of the 
action. See Dusenbery, 534 U.S. at 170.
    Comment: According to the Newspaper Group's comment, ``libraries 
and community centers have limited budgets and can only purchase and 
maintain a limited number of computers,'' and some even have ``long 
lines and limited hours of operation.''
    Response: The Department acknowledges that libraries and community 
centers may have limited resources, but does not believe that the 
limitations of public Internet access are significant enough to warrant 
modification to the final rule. As noted previously, 99.3% of public 
libraries offer public access to computers and the Internet, enabling a 
large swath of the population to access online forfeiture notices. See 
Libraries Connect Communities, supra n.5, at 3.
    Comment: The Newspaper Group's comment claims that government 
Internet posting of notice does not comport with a ``long tradition'' 
that public notice must include four elements: the notice must be 
published by an independent third party, the publication must be 
capable of being archived at a reasonable cost, the notice must be 
accessible, and the notice must be verifiable.
    Response: The comment does not reference any statutory or case law 
to support the proposition that public notice must include these four 
elements. The Department notes that the applicable requirements for 
notice are encompassed in the constitutional due process standard 
governing notice of forfeiture proceedings discussed earlier.
    The element referenced in the comment requiring that notice be 
published by an independent third party presumes that newspapers, being 
``independent of the government,'' provide the public with ``an extra 
layer

[[Page 56100]]

of confidence in the notice'' than if the government published them 
itself. But this argument mistakes why newspapers were used in the past 
and the role they serve in the notice process. Newspapers were 
historically used to provide public notice because, until the Internet, 
there was no comparable alternative method that was ``reasonably 
calculated'' to apprise a party of the pendency of the forfeiture 
action. It had nothing to do with their status as an ``independent and 
neutral third party.'' In fact, for these purposes, there is nothing 
inherently beneficial about newspapers being independent from the 
Government given that they merely act as a vehicle for publishing 
notices prepared and provided by the seizing agencies.
    The comment suggests that records of Internet notices of federal 
forfeiture proceedings will be incomplete or inadequate, citing 
statistics about backlog and budget issues at the National Archives and 
Records Administration (``NARA''). The Department does not find this 
comment persuasive. As an initial matter, the statistics about NARA are 
irrelevant, as NARA is not charged with preserving forfeiture notices. 
Furthermore, all information concerning notices posted on 
www.forfeiture.gov is carefully maintained and archived, enabling the 
Government to provide appropriate verification of such information to 
courts as necessary. This verification, in the form of an affidavit to 
the court verifying the public notice that was given, has proven 
satisfactory to courts. The Department believes that this method for 
noticing judicial forfeitures will work as well with respect to public 
notices of administrative forfeitures posted on the same government Web 
site. Further, the process of providing legal verification of Internet 
notice is dramatically streamlined when it is the Government that can 
retrieve the required data from its own Web site, as opposed to seeking 
such verification from newspapers. Finally, the Department notes that 
this regulatory change should correspondingly decrease the burden on 
newspapers of having to provide such information.
    Comment: Many newspapers have adopted a marketing strategy that 
publishes an issue in print and the identical publication issue is then 
posted on the newspaper's Internet site on a daily basis. The 
Government's Internet sites will not be as user-friendly as the 
newspaper's dual method of print and Internet notification.
    Response: The Department does not agree that posting forfeiture 
notices on newspaper Web sites is superior to posting them on 
www.forfeiture.gov. Online posting is not part of the Government's 
contracts for publication of forfeiture notices, so newspapers are 
under no obligation to make them freely available to the public online. 
Moreover, some newspaper Web sites restrict access to the full online 
version of the newspaper to print subscribers or those who pay for full 
online access. A potential claimant searching for notice of seized 
property on such a Web site would either need a subscription to the 
newspaper that is publishing the forfeiture notice or have to pay a 
daily access fee. The potential claimant would then have to access the 
newspaper's Web site, go into the full online edition, search for the 
forfeiture notice regarding his or her property, and select the exact 
issue in which the once-a-week notice concerning the property is 
published. The Department believes it is unrealistic to assume that 
such a process would provide more effective notice than a freely 
available Web site dedicated only to forfeiture notices that posts the 
desired notice, 24 hours a day, for at least 30 consecutive days, in a 
searchable database.
    Comment: The Newspaper Group's comment challenges the Department to 
support its contention that ``internet sites are more cost effective 
and reach more people.''
    Response: The Department believes it has demonstrated above how 
providing public notice through the Internet can--and indeed already 
does--reach more people, more easily, and more directly, than newspaper 
notice. Meanwhile, the cost savings of Internet notice are significant. 
As noted, the Department currently pays approximately $10,000-$12,000 a 
day, or between $3.5 and $4.5 million a year, in noticing costs to 
newspapers. On the other hand, there is very little cost to the 
Government in adding public notices of administrative forfeiture 
proceedings to www.forfeiture.gov, an existing and fully operational 
Web site. Thus, the cost savings to the Government will be what the 
Department currently pays for publication of such forfeiture notices 
through newspapers.

Regulatory Certifications

Executive Order 12866 and Executive Order 13563--Regulatory Planning 
and Review

    This rule complies with the requirement under Section 6 of 
Executive Order 13563 to modify and streamline outmoded and burdensome 
regulations. Specifically, in terms of updates, the rule recognizes 
that as of 2002 the Bureau of Alcohol, Tobacco, Firearms, and 
Explosives (ATF) became part of the Department, and consolidates the 
regulations governing the seizure and administrative forfeiture of 
property by ATF with those of DEA and the FBI. In terms of burden, the 
rule would add the option of publishing notices for administrative 
forfeitures on an official government Internet site instead of in a 
newspaper, potentially saving over $10,000 per day.
    Further, this regulation has been drafted and reviewed in 
accordance with Executive Order 12866, section 1(b), Principles of 
Regulation. The Department has determined that this rule is a 
``significant regulatory action'' under Executive Order 12866, section 
3(f), and accordingly this rule has been reviewed by the Office of 
Management and Budget (OMB). The costs that this rule imposes (such as 
additional personnel and higher administrative overhead) fall upon the 
Department, not upon the general public. The benefits of this rule, 
however, are numerous. The rule increases the efficiency of 
forfeitures, requires that the agencies provide prompt due process and 
notice, requires that property be promptly returned to third parties if 
appropriate, eliminates the cost bond and its administrative burden, 
and requires more effective processing and handling of currency. 
Moreover, providing agencies with the option of publishing 
administrative forfeiture notices on the Government's dedicated 
forfeiture Web site will save the $10,000 to $12,000 a day agencies 
currently spend providing notice through newspapers. Such notice will 
be available through the Internet at no cost to the general public. For 
the reasons explained in its response to comments, the Department 
maintains the benefits of publishing notices on the newspapers in all 
circumstances, in addition to the Internet, do not justify the costs.

Executive Order 12630--Governmental Actions and Interference With 
Constitutionally Protected Property Rights

    Executive Order 12630, section 2(a)(3) specifically exempts from 
the definition of ``policies that have takings implications'' the 
seizure and forfeiture of property for violations of law. Therefore, no 
actions were deemed necessary under the provisions of Executive Order 
12630.

Executive Order 12988--Civil Justice Reform

    This rule meets the applicable standards set forth in sections 3(a) 
and 3(b)(2) of Executive Order 12988.

[[Page 56101]]

Executive Order 13132--Federalism

    This rule will not have substantial direct effects on the states, 
on the relationship between the Federal Government and the states, or 
on distribution of power and responsibilities among the various levels 
of government. Therefore, in accordance with Executive Order 13132, it 
is determined that this rule does not have sufficient federalism 
implications to warrant the preparation of a Federalism Assessment.

Regulatory Flexibility Act

    The Attorney General, in accordance with the Regulatory Flexibility 
Act (5 U.S.C. 605(b)), has reviewed this regulation, and by approving 
it certifies that it will not have a significant economic impact on a 
substantial number of small entities. Some owners of property subject 
to administrative or judicial forfeiture under laws enforced by ATF, 
DEA, FBI, and the Department's Criminal Division may be small 
businesses as defined under the Regulatory Flexibility Act, and under 
size standards established by the Small Business Administration. 
Although the regulations affect every administrative forfeiture 
initiated by ATF, DEA, and FBI, and every remission or mitigation 
decision by the agencies or the Department's Criminal Division, the 
rule will not change existing forfeiture laws. It will only revise and 
consolidate the seizure and forfeiture regulations of ATF, DEA, FBI, 
and the Criminal Division to conform to CAFRA, and to fill gaps and 
address ambiguities in CAFRA and other seizure and forfeiture laws. 
Accordingly, an initial regulatory flexibility analysis is not 
required.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 251 of the 
Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 
804. This rule will not result in an annual effect on the economy of 
$100,000,000 or more, a major increase in costs or prices, or 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or the ability of United States-based 
enterprises to compete with foreign-based enterprises in domestic and 
export markets.

Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by state, local and 
tribal governments, in the aggregate, or by the private sector, of 
$100,000,000 or more in any one year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995, Public Law 104-9, 44 U.S.C. 3518.

Paperwork Reduction Act of 1995

    This final rule does not call for a ``collection of information'' 
that requires approval by OMB under the Paperwork Reduction Act (PRA), 
44 U.S.C. 3501 et seq., because any information collected in connection 
with forfeiture proceedings would fall within the exceptions to the PRA 
listed in 44 U.S.C. 3518(c) and 5 CFR 1320.4.
    The particular exception that applies to information collected in 
connection with a forfeiture action depends on the type of forfeiture 
proceeding that is occurring. Information collected in connection with 
an administrative forfeiture would fall within the section 
3518(c)(1)(B)(ii) exception for the collection of information during an 
``administrative action * * * involving an agency against specific 
individuals or entities.''
    If a claim is properly filed in the administrative forfeiture, 
federal prosecutors must file a civil forfeiture complaint against the 
property, include it in a criminal indictment within the deadlines laid 
out by CAFRA, or return the property. Information collected in 
connection with a civil forfeiture would fall under the section 
3518(c)(1)(B)(ii) exception for collection of information during ``a 
civil action to which the United States * * * is a party.'' 
Alternatively, if the prosecutors include the property in a criminal 
indictment, any collection of information would occur ``during the 
conduct of a Federal criminal investigation * * * or during the 
disposition of a particular criminal matter'' and would fall under the 
exception of section 3518(c)(1)(A). Thus, because a claim or petition 
filed in forfeiture proceedings would fall within one of the exceptions 
to the PRA, the final rule does not call for a collection of 
information under that statute and accordingly does not require the 
prior approval of OMB.

List of Subjects

21 CFR Part 1316

    Administrative practice and procedure, Authority delegations 
(Government agencies), Drug traffic control, Research, Seizures and 
forfeitures.

28 CFR Part 8

    Administrative practice and procedure, Arms and munitions, 
Communications equipment, Copyright, Crime, Gambling, Infants and 
children, Motor vehicles, Prices, Seizures and forfeitures, Wiretapping 
and electronic surveillance.

28 CFR Part 9

    Administrative practice and procedure, Crime, Seizures and 
forfeitures.

    Accordingly, for the reasons set forth in the preamble, under the 
authority of 5 U.S.C. 301, Chapter II of Title 21 and Chapter I of 
Title 28 of the Code of Federal Regulations are amended as follows:

TITLE 21--FOOD AND DRUGS

PART 1316--ADMINISTRATIVE FUNCTIONS, PRACTICES, AND PROCEDURES

Subparts E and F [Removed]

0
1. Remove 2l CFR part 1316, subparts E and F.

TITLE 28--JUDICIAL ADMINISTRATION

0
2. Revise part 8 to read as follows:

PART 8--FORFEITURE AUTHORITY FOR CERTAIN STATUTES

Subpart A--Seizure and Forfeiture of Property
Sec.
8.1 Scope of regulations.
8.2 Definitions.
8.3 Seizing property subject to forfeiture.
8.4 Inventory.
8.5 Custody.
8.6 Appraisal.
8.7 Release before claim.
8.8 Commencing the administrative forfeiture proceeding.
8.9 Notice of administrative forfeiture.
8.10 Claims.
8.11 Interplay of administrative and criminal judicial forfeiture 
proceedings.
8.12 Declaration of administrative forfeiture.
8.13 Return of property pursuant to 18 U.S.C. 983(a)(3)(B).
8.14 Disposition of property before forfeiture.
8.15 Requests for hardship release of seized property.
8.16 Attorney fees and costs.
Subpart B--Expedited Forfeiture Proceedings for Property Seizures Based 
on Violations Involving the Possession of Personal Use Quantities of a 
Controlled Substance
8.17 Purpose and scope.
8.18 Definitions.
8.19 Petition for expedited release in an administrative forfeiture 
proceeding.
8.20 Ruling on petition for expedited release in an administrative 
forfeiture.
8.21 Posting of substitute monetary amount in an administrative 
forfeiture.
8.22 Special notice provision.

[[Page 56102]]

Subpart C--Other Applicable Provisions
8.23 Redelegation of authority.

    Authority: 5 U.S.C. 301; 8 U.S.C. 1103, 1324(b); 18 U.S.C. 981, 
983, 3051; 19 U.S.C. 1606, 1607, 1608, 1610, 1612(b), 1613, 1618; 21 
U.S.C. 822, 871, 872, 880, 881, 883, 958, 965; 28 U.S.C. 509, 510; 
Pub. L. 100-690, sec. 6079, 102 Stat. 4181.

Subpart A--Seizure and Forfeiture of Property


Sec.  8.1  Scope of regulations.

    (a) This part applies to all forfeitures administered by the 
Department of Justice with the exception of seizures and forfeitures 
under the statutes listed in 18 U.S.C. 983(i)(2). The authority of 
seizing agencies to conduct administrative forfeitures derives from the 
procedural provisions of the Customs laws (19 U.S.C. 1602-1618) where 
those provisions are incorporated by reference in the substantive 
forfeiture statutes enforced by the agencies.
    (b) The regulations in this part will apply to all forfeiture 
actions commenced on or after October 12, 2012.


Sec.  8.2  Definitions.

    As used in this part, the following terms shall have the meanings 
specified:
    Administrative forfeiture means the process by which property may 
be forfeited by a seizing agency rather than through a judicial 
proceeding. Administrative forfeiture has the same meaning as 
nonjudicial forfeiture, as that term is used in 18 U.S.C. 983.
    Appraised value means the estimated market value of property at the 
time and place of seizure if such or similar property were freely 
offered for sale by a willing seller to a willing buyer.
    Appropriate official means, in the case of the Drug Enforcement 
Administration (DEA), the Forfeiture Counsel, DEA. In the case of the 
Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), it means 
the Associate Chief Counsel, Office of Chief Counsel, ATF. In the case 
of the Federal Bureau of Investigation (FBI), it means the Unit Chief, 
Legal Forfeiture Unit, Office of the General Counsel, FBI, except as 
used in Sec. Sec.  8.9(a)(2), 8.9(b)(2), 8.10, and 8.15, where the term 
appropriate official means the office or official identified in the 
published notice or personal written notice in accordance with Sec.  
8.9.
    Civil forfeiture proceeding means a civil judicial forfeiture 
action as that term is used in 18 U.S.C. 983.
    Contraband means--
    (1) Any controlled substance, hazardous raw material, equipment or 
container, plants, or other property subject to summary forfeiture 
pursuant to sections 511(f) or (g) of the Controlled Substances Act (21 
U.S.C. 881(f) or (g)); or
    (2) Any controlled substance imported into the United States, or 
exported out of the United States, in violation of law.
    Domestic value means the same as the term appraised value as 
defined in this section.
    Expense means all costs incurred to detain, inventory, safeguard, 
maintain, advertise, sell, or dispose of property seized, detained, or 
forfeited pursuant to any law.
    File or filed has the following meanings:
    (1) A claim or any other document submitted in an administrative 
forfeiture proceeding is not deemed filed until actually received by 
the appropriate official identified in the personal written notice and 
the published notice specified in Sec.  8.9. It is not considered filed 
if it is received by any other office or official, such as a court, 
U.S. Attorney, seizing agent, local ATF or DEA office, or FBI 
Headquarters. In addition, a claim in an administrative forfeiture 
proceeding is not considered filed if received only by an electronic or 
facsimile transmission.
    (2) For purposes of computing the start of the 90-day period set 
forth in 18 U.S.C. 983(a)(3), an administrative forfeiture claim is 
filed on the date when the claim is received by the designated 
appropriate official, even if the claim is received from an 
incarcerated pro se prisoner.
    Interested party means any person who reasonably appears to have an 
interest in the property based on the facts known to the seizing agency 
before a declaration of forfeiture is entered.
    Mail includes regular or certified U.S. mail and mail and package 
transportation and delivery services provided by other private or 
commercial interstate carriers.
    Nonjudicial forfeiture has the same meaning as administrative 
forfeiture as defined in this section.
    Person means an individual, partnership, corporation, joint 
business enterprise, estate, or other legal entity capable of owning 
property.
    Property subject to administrative forfeiture means any personal 
property of the kinds described in 19 U.S.C. 1607(a).
    Property subject to forfeiture refers to all property that federal 
law authorizes to be forfeited to the United States of America in any 
administrative forfeiture proceeding, in any civil judicial forfeiture 
proceeding, or in any criminal forfeiture proceeding.
    Seizing agency refers to ATF, DEA, or FBI.


Sec.  8.3  Seizing property subject to forfeiture.

    (a) Authority of seizing agents. All special agents of any seizing 
agency may seize assets under any federal statute over which the agency 
has investigative or forfeiture jurisdiction.
    (b) Turnover of assets seized by state and local agencies.
    (1) Property that is seized by a state or local law enforcement 
agency and transferred to a seizing agency for administrative or civil 
forfeiture may be adopted for administrative forfeiture without the 
issuance of any federal seizure warrant or other federal judicial 
process.
    (2) Where a state or local law enforcement agency maintains custody 
of property pursuant to process issued by a state or local judicial 
authority, and notifies a seizing agency of the impending release of 
such property, the seizing agency may seek and obtain a federal seizure 
warrant in anticipation of a state or local judicial authority 
releasing the asset from state process for purposes of federal seizure, 
and may execute such seizure warrant when the state or local law 
enforcement agency releases the property as allowed or directed by its 
judicial authority.


Sec.  8.4  Inventory.

    The seizing agent shall prepare an inventory of any seized 
property.


Sec.  8.5  Custody.

    (a) All property seized for forfeiture by ATF, DEA, or FBI shall be 
delivered to the custody of the U.S. Marshals Service (USMS), or a 
custodian approved by the USMS, as soon as practicable after seizure, 
unless it is retained as evidence by the seizing agency.
    (b) Seized U.S. currency (and, to the extent practicable, seized 
foreign currency and negotiable instruments) must be deposited promptly 
in the Seized Asset Deposit Fund pending forfeiture. Provisional 
exceptions to this requirement may be granted as follows:
    (1) If the seized currency has a value less than $5,000 and a 
supervisory official within a U.S. Attorney's Office determines in 
writing that the currency is reasonably likely to serve a significant, 
independent, tangible evidentiary purpose, or that retention is 
necessary while the potential evidentiary significance of the currency 
is being determined by scientific testing or otherwise; or
    (2) If the seized currency has a value greater than $5,000 and the 
Chief of the Asset Forfeiture and Money Laundering

[[Page 56103]]

Section (AFMLS), Criminal Division, determines in writing that the 
currency is reasonably likely to serve a significant, independent, 
tangible evidentiary purpose, or that retention is necessary while the 
potential evidentiary significance of the currency is being determined 
by scientific testing or otherwise.
    (c) Seized currency has a significant independent, tangible 
evidentiary purpose as those terms are used in Sec.  8.5(b)(1) and 
(b)(2) if, for example, it bears fingerprint evidence, is packaged in 
an incriminating fashion, or contains a traceable amount of narcotic 
residue or some other substance of evidentiary significance. If only a 
portion of the seized currency has evidentiary value, only that portion 
should be retained; the balance should be deposited.


Sec.  8.6  Appraisal.

    The seizing agency or its designee shall determine the domestic 
value of seized property as soon as practicable following seizure.


Sec.  8.7  Release before claim.

    (a) After seizure for forfeiture and prior to the filing of any 
claim, ATF's Chief, Asset Forfeiture and Seized Property Branch, or 
designee, the appropriate DEA Special Agent in Charge, or designee, or 
the appropriate FBI Special Agent in Charge, or designee, whichever is 
applicable, is authorized to release property seized for forfeiture, 
provided:
    (1) The property is not contraband, evidence of a violation of law, 
or any property, the possession of which by the claimant, petitioner, 
or the person from whom it was seized is prohibited by state or federal 
law, and does not have a design or other characteristic that 
particularly suits it for use in illegal activities; and
    (2) The official designated in paragraph (a) of this section 
determines within 10 days of seizure that there is an innocent party 
with the right to immediate possession of the property or that the 
release would be in the best interest of justice or the Government.
    (b) Further, at any time after seizure and before any claim is 
referred, such seized property may be released if the appropriate 
official of the seizing agency determines that there is an innocent 
party with the right to immediate possession of the property or that 
the release would be in the best interest of justice or the Government.


Sec.  8.8  Commencing the administrative forfeiture proceeding.

    An administrative forfeiture proceeding begins when notice is first 
published in accordance with Sec.  8.9(a), or the first personal 
written notice is sent in accordance with Sec.  8.9(b), whichever 
occurs first.


Sec.  8.9  Notice of administrative forfeiture.

    (a) Notice by publication. (1) After seizing property subject to 
administrative forfeiture, the appropriate official of the seizing 
agency shall select from the following options a means of publication 
reasonably calculated to notify potential claimants of the seizure and 
intent to forfeit and sell or otherwise dispose of the property:
    (i) Publication once each week for at least three successive weeks 
in a newspaper generally circulated in the judicial district where the 
property was seized; or
    (ii) Posting a notice on an official internet government forfeiture 
site for at least 30 consecutive days.
    (2) The published notice shall:
    (i) Describe the seized property;
    (ii) State the date, statutory basis, and place of seizure;
    (iii) State the deadline for filing a claim when personal written 
notice has not been received, at least 30 days after the date of final 
publication of the notice of seizure; and
    (iv) State the identity of the appropriate official of the seizing 
agency and address where the claim must be filed.
    (b) Personal written notice. (1) Manner of providing notice. After 
seizing property subject to administrative forfeiture, the seizing 
agency, in addition to publishing notice, shall send personal written 
notice of the seizure to each interested party in a manner reasonably 
calculated to reach such parties.
    (2) Content of personal written notice. The personal written notice 
sent by the seizing agency shall:
    (i) State the date when the personal written notice is sent;
    (ii) State the deadline for filing a claim, at least 35 days after 
the personal written notice is sent;
    (iii) State the date, statutory basis, and place of seizure;
    (iv) State the identity of the appropriate official of the seizing 
agency and the address where the claim must be filed; and
    (v) Describe the seized property.
    (c) Timing of notice. (1) Date of personal notice. Personal written 
notice is sent on the date when the seizing agency causes it to be 
placed in the mail, delivered to a commercial carrier, or otherwise 
sent by means reasonably calculated to reach the interested party. The 
personal written notice required by Sec.  8.9(b) shall be sent as soon 
as practicable, and in no case more than 60 days after the date of 
seizure (or 90 days after the date of seizure by a state or local law 
enforcement agency if the property was turned over to a federal law 
enforcement agency for the purpose of forfeiture under federal law).
    (2) Civil judicial forfeiture. If, before the time period for 
sending notice expires, the Government files a civil judicial 
forfeiture action against the seized property and provides notice of 
such action as required by law, personal notice of administrative 
forfeiture is not required under paragraph (c)(1) of this section.
    (3) Criminal indictment. If, before the time period for sending 
notice under paragraph (c)(1) of this section expires, no civil 
judicial forfeiture action is filed, but a criminal indictment or 
information is obtained containing an allegation that the property is 
subject to forfeiture, the seizing agency shall either:
    (i) Send timely personal written notice and continue the 
administrative forfeiture proceeding; or
    (ii) After consulting with the U.S. Attorney, terminate the 
administrative forfeiture proceeding and notify the custodian to return 
the property to the person having the right to immediate possession 
unless the U.S. Attorney takes the steps necessary to maintain custody 
of the property as provided in the applicable criminal forfeiture 
statute.
    (4) Subsequent federal seizure. If property is seized by a state or 
local law enforcement agency, but personal written notice is not sent 
to the person from whom the property is seized within the time period 
for providing notice under paragraph (c)(1) of this section, then any 
administrative forfeiture proceeding against the property may commence 
if:
    (i) The property is subsequently seized or restrained by the 
seizing agency pursuant to a federal seizure warrant or restraining 
order and the seizing agency sends notice as soon as practicable, and 
in no case more than 60 days after the date of the federal seizure; or
    (ii) The owner of the property consents to forfeiture of the 
property.
    (5) Tolling. (i) In states or localities where orders are obtained 
from a state court authorizing the turnover of seized assets to a 
federal seizing agency, the period from the date an application or 
motion is presented to the state court for the turnover order through 
the date when such order is issued by the court shall not be included 
in the time period

[[Page 56104]]

for providing notice under paragraph (c)(1) of this section.
    (ii) If property is detained at an international border or port of 
entry for the purpose of examination, testing, inspection, obtaining 
documentation, or other investigation relating to the importation of 
the property into, or the exportation of the property from, the United 
States, such period of detention shall not be included in the period 
described in paragraph (c)(1) of this section. In such cases, the 60-
day period shall begin to run when the period of detention ends, if a 
seizing agency seizes the property for the purpose of forfeiture to the 
United States.
    (6) Identity of interested party. If a seizing agency determines 
the identity or interest of an interested party after the seizure or 
adoption of the property, but before entering a declaration of 
forfeiture, the agency shall send written notice to such interested 
party under paragraph (c)(1) of this section not later than 60 days 
after determining the identity of the interested party or the 
interested party's interest.
    (7) Extending deadline for notice. The appropriate official of the 
seizing agency may extend the period for sending personal written 
notice under the regulations in this part in a particular case for a 
period not to exceed 30 days (which period may not be further extended 
except by a court pursuant to 18 U.S.C. 983(a)(1)(C) and (D)), if the 
appropriate official determines, and states in writing, that there is 
reason to believe that notice may have an adverse result, including: 
Endangering the life or physical safety of an individual; flight from 
prosecution; destruction of or tampering with evidence; intimidation of 
potential witnesses; or otherwise seriously jeopardizing an 
investigation or unduly delaying a trial.
    (8) Certification. The appropriate official of the seizing agency 
shall provide the written certification required under 18 U.S.C. 
983(a)(1)(C) when the Government requests it and the conditions 
described in section 983(a)(1)(D) are present.


Sec.  8.10  Claims.

    (a) Filing. In order to contest the forfeiture of seized property 
in federal court, any person asserting an interest in seized property 
subject to an administrative forfeiture proceeding under the 
regulations in this part must file a claim with the appropriate 
official, after the commencement of the administrative forfeiture 
proceeding as defined in Sec.  8.8, and not later than the deadline set 
forth in a personal notice letter sent pursuant to Sec.  8.9(b). If 
personal written notice is sent but not received, then the intended 
recipient must file a claim with the appropriate official not later 
than 30 days after the date of the final publication of the notice of 
seizure.
    (b) Contents of claim. A claim shall:
    (1) Identify the specific property being claimed;
    (2) Identify the claimant and state the claimant's interest in the 
property; and
    (3) Be made under oath by the claimant, not counsel for the 
claimant, and recite that it is made under penalty of perjury, 
consistent with the requirements of 28 U.S.C. 1746. An acknowledgment, 
attestation, or certification by a notary public alone is insufficient.
    (c) Availability of claim forms. The claim need not be made in any 
particular form. However, each seizing agency conducting forfeitures 
under the regulations in this part must make claim forms generally 
available on request. Such forms shall be written in easily 
understandable language. A request for a claim form does not extend the 
deadline for filing a claim. Any person may obtain a claim form by 
requesting one in writing from the appropriate official.
    (d) Cost bond not required. Any person may file a claim under Sec.  
8.10(a) without posting bond, except in forfeitures under statutes 
listed in 18 U.S.C. 983(i).
    (e) Referral of claim. Upon receipt of a claim that meets the 
requirements of Sec. Sec.  8.10(a) and (b), the seizing agency shall 
return the property or shall suspend the administrative forfeiture 
proceeding and promptly transmit the claim, together with a description 
of the property and a complete statement of the facts and circumstances 
surrounding the seizure, to the appropriate U.S. Attorney for 
commencement of judicial forfeiture proceedings. Upon making the 
determination that the seized property will be released, the agency 
shall promptly notify the person with a right to immediate possession 
of the property, informing that person to contact the property 
custodian within a specified period for release of the property, and 
further informing that person that failure to contact the property 
custodian within the specified period for release of the property will 
result in abandonment of the property pursuant to applicable 
regulations. The seizing agency shall notify the property custodian of 
the identity of the person to whom the property should be released. The 
property custodian shall have the right to require presentation of 
proper identification or to take other steps to verify the identity of 
the person who seeks the release of property, or both.
    (f) Premature filing. If a claim is filed with the appropriate 
official after the seizure of property, but before the commencement of 
the administrative forfeiture proceeding as defined in Sec.  8.8, the 
claim shall be deemed filed on the 30th day after the commencement of 
the administrative forfeiture proceeding. If such claim meets the 
requirements of Sec.  8.10(b), the seizing agency shall suspend the 
administrative forfeiture proceedings and promptly transmit the claim, 
together with a description of the property and a complete statement of 
the facts and circumstances surrounding the seizure to the appropriate 
U.S. Attorney for commencement of judicial forfeiture proceedings.
    (g) Defective claims. If the seizing agency determines that an 
otherwise timely claim does not meet the requirements of Sec.  8.10(b), 
the seizing agency may notify the claimant of this determination and 
allow the claimant a reasonable time to cure the defect(s) in the 
claim. If, within the time allowed by the seizing agency, the 
requirements of Sec.  8.10(b) are not met, the claim shall be void and 
the forfeiture proceedings shall proceed as if no claim had been 
submitted. If the claimant timely cures the deficiency, then the claim 
shall be deemed filed on the date when the appropriate official 
receives the cured claim.


Sec.  8.11  Interplay of administrative and criminal judicial 
forfeiture proceedings.

    An administrative forfeiture proceeding pending against seized or 
restrained property does not bar the Government from alleging that the 
same property is forfeitable in a criminal case. Notwithstanding the 
fact that an allegation of forfeiture has been included in a criminal 
indictment or information, the property may be administratively 
forfeited in a parallel proceeding.


Sec.  8.12  Declaration of administrative forfeiture.

    If the seizing agency commences a timely proceeding against 
property subject to administrative forfeiture, and no valid and timely 
claim is filed, the appropriate official of the seizing agency shall 
declare the property forfeited. The declaration of forfeiture shall 
have the same force and effect as a final decree and order of 
forfeiture in a federal judicial forfeiture proceeding.


Sec.  8.13  Return of property pursuant to 18 U.S.C. 983(a)(3)(B).

    (a) If, under 18 U.S.C. 983(a)(3), the United States is required to 
return seized property, the U.S. Attorney in charge of the matter shall 
immediately notify the appropriate seizing agency

[[Page 56105]]

that the 90-day deadline was not met. Under this subsection, the United 
States is not required to return property for which it has an 
independent basis for continued custody, including but not limited to 
contraband or evidence of a violation of law.
    (b) Upon becoming aware that the seized property must be released, 
the agency shall promptly notify the person with a right to immediate 
possession of the property, informing that person to contact the 
property custodian within a specified period for release of the 
property, and further informing that person that failure to contact the 
property custodian within the specified period for release of the 
property may result in initiation of abandonment proceedings against 
the property pursuant to 41 CFR part 128-48. The seizing agency shall 
notify the property custodian of the identity of the person to whom the 
property should be released.
    (c) The property custodian shall have the right to require 
presentation of proper identification and to verify the identity of the 
person who seeks the release of property.


Sec.  8.14  Disposition of property before forfeiture.

    (a) Whenever it appears to the seizing agency that any seized 
property is liable to perish or to waste, or to be greatly reduced in 
value during its detention for forfeiture, or that the expense of 
keeping the property is or will be disproportionate to its value, the 
appropriate official of the seizing agency may order destruction, sale, 
or other disposition of such property prior to forfeiture. In addition, 
the owner may obtain release of the property by posting a substitute 
monetary amount with the seizing agency to be held subject to 
forfeiture proceedings in place of the seized property to be released. 
Upon approval by the appropriate official of the seizing agency, the 
property will be released to the owner after the payment of an amount 
equal to the Government appraised value of the property if the property 
is not evidence of a violation of law, is not contraband, and has no 
design or other characteristics that particularly suit it for use in 
illegal activities. This payment must be in the form of a money order, 
an official bank check, or a cashier's check made payable to the United 
States Marshals Service. A bond in the form of a cashier's check or 
official bank check will be considered as paid once the check has been 
accepted for payment by the financial institution that issued the 
check. If a substitute amount is posted and the property is 
administratively forfeited, the seizing agency will forfeit the 
substitute amount in lieu of the property. The pre-forfeiture 
destruction, sale, or other disposition of seized property pursuant to 
this section shall not extinguish any person's rights to the value of 
the property under applicable law. The authority vested in the 
appropriate official under this subsection may not be delegated.
    (b) The seizing agency shall commence forfeiture proceedings, 
regardless of the disposition of the property under Sec.  8.14(a). A 
person with an interest in the property that was destroyed or otherwise 
disposed of under Sec.  8.14(a) may file a claim to contest the 
forfeiture of the property or a petition for remission or mitigation of 
the forfeiture. No government agent or employee shall be liable for the 
destruction or other disposition of property made pursuant to Sec.  
8.14(a). The destruction or other disposition of the property pursuant 
to this section does not impair in rem jurisdiction.


Sec.  8.15  Requests for hardship release of seized property.

    (a) Under certain circumstances a claimant may be entitled to 
immediate release of seized property on the basis of hardship.
    (b) Any person filing a request for hardship release must also file 
a claim to the seized property pursuant to Sec.  8.10 and as defined in 
18 U.S.C. 983(a).
    (c) The timely filing of a valid claim pursuant to Sec.  8.10 does 
not entitle claimant to possession of the seized property, but a 
claimant may request immediate release of the property while the 
forfeiture is pending, based on hardship.
    (d) A claimant seeking hardship release of property under 18 U.S.C. 
983(f) and the regulations in this part must file a written request 
with the appropriate official. The request must establish that:
    (1) The claimant has a possessory interest in the property;
    (2) The claimant has sufficient ties to the community to provide 
assurance that the property will be available at the time of trial;
    (3) The continued possession by the Government pending the final 
disposition of forfeiture proceedings will cause substantial hardship 
to the claimant, such as preventing the functioning of a business, 
preventing an individual from working, or leaving an individual 
homeless;
    (4) The claimant's likely hardship from the continued possession by 
the Government of the seized property outweighs the risk that the 
property will be destroyed, damaged, lost, concealed, or transferred if 
it is returned to the claimant during the pendency of the proceeding; 
and
    (5) The seized property is not:
    (i) Contraband;
    (ii) Any property, the possession of which by the claimant, 
petitioner, or the person from whom it was seized is prohibited by 
state or federal law;
    (iii) 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 that has been seized;
    (iv) Intended to be used as evidence of a violation of law;
    (v) By reason of design or other characteristic, particularly 
suited for use in illegal activities; or
    (vi) Likely to be used to commit additional criminal acts if 
returned to the claimant.
    (e) A hardship release request pursuant to this section shall be 
deemed to have been made on the date when it is received by the 
appropriate official as defined in Sec.  8.2(c) or the date the claim 
was deemed filed under Sec.  8.10(f). If the request is ruled on and 
denied by the appropriate official or the property has not been 
released within the 15-day time period, the claimant may file a 
petition in federal district court pursuant to 18 U.S.C. 983(f)(3). If 
a petition is filed in federal district court, the claimant must send a 
copy of the petition to the agency to which the hardship petition was 
originally submitted and to the U.S. Attorney in the judicial district 
in which the judicial petition was filed.
    (f) If a civil forfeiture complaint is filed on the property and 
the claimant files a claim with the court pursuant to 18 U.S.C. 
983(a)(4)(A) and Rule G(5) of the Supplemental Rules for Certain 
Admiralty and Maritime Claims, a hardship petition may be submitted to 
the individual identified in the public or personal notice of the civil 
judicial forfeiture action.


Sec.  8.16  Attorney fees and costs.

    The United States is not liable for attorney fees or costs in any 
administrative forfeiture proceeding, including such proceedings in 
which a claim is filed, even if the matter is referred to the U.S. 
Attorney, and the U.S. Attorney declines to commence judicial 
forfeiture proceedings.

[[Page 56106]]

Subpart B--Expedited Forfeiture Proceedings for Property Seizures 
Based on Violations Involving the Possession of Personal Use 
Quantities of a Controlled Substance


Sec.  8.17  Purpose and scope.

    (a) The following definitions, regulations, and criteria in this 
subpart are designed to establish and implement procedures required by 
section 6079 of the Anti-Drug Abuse Act of 1988, Public Law 100-690, 
102 Stat. 4181. They are intended to supplement existing law and 
procedures relative to the forfeiture of property under the identified 
statutory authority. These regulations do not affect the existing legal 
and equitable rights and remedies of those with an interest in property 
seized for forfeiture, nor do these provisions relieve interested 
parties from their existing obligations and responsibilities in 
pursuing their interests through such courses of action. These 
regulations are intended to reflect the intent of Congress to minimize 
the adverse impact on those entitled to legal or equitable relief 
occasioned by the prolonged detention of property subject to forfeiture 
due to violations of law involving personal use quantities of 
controlled substances. The definition of personal use quantities of a 
controlled substance as contained herein is intended to distinguish 
between those small quantities that are generally considered to be 
possessed for personal consumption and not for further distribution, 
and those larger quantities generally considered to be intended for 
further distribution.
    (b) In this regard, for violations involving the possession of 
personal use quantities of a controlled substance, section 6079(b)(2) 
requires either that administrative forfeiture be completed within 21 
days of the seizure of the property, or alternatively, that procedures 
be established that provide a means by which an individual entitled to 
relief may initiate an expedited administrative review of the legal and 
factual basis of the seizure for forfeiture. Should an individual 
request relief pursuant to these regulations and be entitled to the 
return of the seized property, such property shall be returned 
immediately following that determination, and in no event later than 20 
days after the filing of a petition for expedited release by an owner, 
and the administrative forfeiture process shall cease. Should the 
individual not be entitled to the return of the seized property, 
however, the administrative forfeiture of that property shall proceed. 
The owner may, in any event, obtain release of property pending the 
administrative forfeiture by submitting to the agency making the 
determination property sufficient to preserve the Government's vested 
interest for purposes of the administrative forfeiture.


Sec.  8.18  Definitions.

    As used in this subpart, the following terms shall have the 
meanings specified: Commercial fishing industry vessel means a vessel 
that:
    (1) Commercially engages in the catching, taking, or harvesting of 
fish or an activity that can reasonably be expected to result in the 
catching, taking, or harvesting of fish;
    (2) Commercially prepares fish or fish products other than by 
gutting, decapitating, gilling, skinning, shucking, icing, freezing, or 
brine chilling; or
    (3) Commercially supplies, stores, refrigerates, or transports 
fish, fish products, or materials directly related to fishing or the 
preparation of fish to or from a fishing, fish processing, or fish 
tender vessel or fish processing facility.
    Controlled substance has the meaning given in 21 U.S.C. 802(6).
    Normal and customary manner means that inquiry suggested by 
particular facts and circumstances that would customarily be undertaken 
by a reasonably prudent individual in a like or similar situation. 
Actual knowledge of such facts and circumstances is unnecessary, and 
implied, imputed, or constructive knowledge is sufficient. An 
established norm, standard, or custom is persuasive but not conclusive 
or controlling in determining whether an owner acted in a normal and 
customary manner to ascertain how property would be used by another 
legally in possession of the property. The failure to act in a normal 
and customary manner as defined herein will result in the denial of a 
petition for expedited release of the property and is intended to have 
the desirable effect of inducing owners of the property to exercise 
greater care in transferring possession of their property.
    Owner means one having a legal and possessory interest in the 
property seized for forfeiture. Even though one may hold primary and 
direct title to the property seized, such person may not have 
sufficient actual beneficial interest in the property to support a 
petition as owner if the facts indicate that another person had 
dominion and control over the property.
    Personal use quantities means those amounts of controlled 
substances in possession in circumstances where there is no other 
evidence of an intent to distribute, or to facilitate the 
manufacturing, compounding, processing, delivering, importing, or 
exporting of any controlled substance.
    (1) Evidence that possession of quantities of a controlled 
substance is for other than personal use may include, for example:
    (i) Evidence, such as drug scales, drug distribution paraphernalia, 
drug records, drug packaging material, method of drug packaging, drug 
``cutting'' agents and other equipment, that indicates an intent to 
process, package or distribute a controlled substance;
    (ii) Information from reliable sources indicating possession of a 
controlled substance with intent to distribute;
    (iii) The arrest or conviction record of the person or persons in 
actual or constructive possession of the controlled substance for 
offenses under federal, state or local law that indicates an intent to 
distribute a controlled substance;
    (iv) Circumstances or reliable information indicating that the 
controlled substance is related to large amounts of cash or any amount 
of prerecorded government funds;
    (v) Circumstances or reliable information indicating that the 
controlled substance is a sample intended for distribution in 
anticipation of a transaction involving large quantities, or is part of 
a larger delivery;
    (vi) Statements by the possessor, or otherwise attributable to the 
possessor, including statements of conspirators, that indicate 
possession with intent to distribute; or
    (vii) The fact that the controlled substance was recovered from 
sweepings.
    (2) Possession of a controlled substance shall be presumed to be 
for personal use when there are no indicia of illicit drug trafficking 
or distribution--such as, but not limited to, the factors listed 
above--and the amounts do not exceed the following quantities:
    (i) One gram of a mixture or substance containing a detectable 
amount of heroin;
    (ii) One gram of a mixture or substance containing a detectable 
amount of--
    (A) Coca leaves, except coca leaves and extracts of coca leaves 
from which cocaine, ecgonine, and derivations of ecgonine or their 
salts have been removed;
    (B) Cocaine, its salts, optical and geometric isomers, and salts of 
isomers;
    (C) Ecgonine, its derivatives, their salts, isomers, and salts of 
isomers; or
    (D) Any compound, mixture, or preparation that contains any 
quantity

[[Page 56107]]

of any of the substances referred to in paragraphs (2)(ii)(A) through 
(2)(ii)(C) of this definition;
    (iii) 1/10th gram of a mixture or substance described in paragraph 
(e)(2)(ii) of this section which contains cocaine base;
    (iv) 1/10th gram of a mixture or substance containing a detectable 
amount of phencyclidine (PCP);
    (v) 500 micrograms of lysergic acid diethylamide (LSD);
    (vi) One ounce of a mixture or substance containing a detectable 
amount of marihuana;
    (vii) One gram of methamphetamine, its salts, isomers, and salts of 
its isomers, or one gram of a mixture or substance containing a 
detectable amount of methamphetamine, its salts, isomers, or salts of 
its isomers.
    (3) The possession of a narcotic, a depressant, a stimulant, a 
hallucinogen, or a cannabis-controlled substance will be considered in 
excess of personal use quantities if the dosage unit amount possessed 
provides the same or greater equivalent efficacy as the quantities 
described in paragraph (e)(2) of this section.
    Property means property subject to forfeiture under 21 U.S.C. 
881(a) (4), (6), and (7); 19 U.S.C. 1595a; and 49 U.S.C. 80303.
    Seizing agency means the federal agency that has seized the 
property or adopted the seizure of another agency and has the 
responsibility for administratively forfeiting the property;
    Statutory rights or defenses to the forfeiture means all legal and 
equitable rights and remedies available to a claimant of property 
seized for forfeiture.


Sec.  8.19  Petition for expedited release in an administrative 
forfeiture proceeding.

    (a) Where property is seized for administrative forfeiture 
involving controlled substances in personal use quantities the owner 
may petition the seizing agency for expedited release of the property.
    (b) Where property described in Sec.  8.19(a) is a commercial 
fishing industry vessel proceeding to or from a fishing area or 
intermediate port of call or actually engaged in fishing operations, 
which would be subject to seizure for administrative forfeiture for a 
violation of law involving controlled substances in personal use 
quantities, a summons to appear shall be issued in lieu of a physical 
seizure. The vessel shall report to the port designated in the summons. 
The seizing agency shall be authorized to effect administrative 
forfeiture as if the vessel had been physically seized. Upon answering 
the summons to appear on or prior to the last reporting date specified 
in the summons, the owner of the vessel may file a petition for 
expedited release pursuant to Sec.  8.19(a), and the provisions of 
Sec.  8.19(a) and other provisions in this section pertaining to a 
petition for expedited release shall apply as if the vessel had been 
physically seized.
    (c) The owner filing the petition for expedited release shall 
establish the following:
    (1) The owner has a valid, good faith interest in the seized 
property as owner or otherwise;
    (2) The owner reasonably attempted to ascertain the use of the 
property in a normal and customary manner; and
    (3) The owner did not know of or consent to the illegal use of the 
property, or in the event that the owner knew or should have known of 
the illegal use, the owner did what reasonably could be expected to 
prevent the violation.
    (d) In addition to those factors listed in Sec.  8.19(c), if an 
owner can demonstrate that the owner has other statutory rights or 
defenses that would cause the owner to prevail on the issue of 
forfeiture, such factors shall also be considered in ruling on the 
petition for expedited release.
    (e) A petition for expedited release must be received by the 
appropriate seizing agency within 20 days from the date of the first 
publication of the notice of seizure in order to be considered by the 
seizing agency. The petition must be executed and sworn to by the owner 
and both the envelope and the request must be clearly marked ``PETITION 
FOR EXPEDITED RELEASE.'' Such petition shall be filed with the 
appropriate office or official identified in the personal written 
notice and the publication notice.
    (f) The petition shall include the following:
    (1) A complete description of the property, including 
identification numbers, if any, and the date and place of seizure;
    (2) The petitioner's interest in the property, which shall be 
supported by title documentation, bills of sale, contracts, mortgages, 
or other satisfactory documentary evidence; and
    (3) A statement of the facts and circumstances, to be established 
by satisfactory proof, relied upon by the petitioner to justify 
expedited release of the seized property.


Sec.  8.20  Ruling on petition for expedited release in an 
administrative forfeiture proceeding.

    (a) If a final administrative determination of the case, without 
regard to the provisions of this section, is made within 21 days of the 
seizure, the seizing agency need take no further action under this 
section on a petition for expedited release received pursuant to Sec.  
8.19(a).
    (b) If no such final administrative determination is made within 21 
days of the seizure, the following procedure shall apply. The seizing 
agency shall, within 20 days after the receipt of the petition for 
expedited release, determine whether the petition filed by the owner 
has established the factors listed in Sec.  8.19(c) and:
    (1) If the seizing agency determines that those factors have been 
established, it shall terminate the administrative proceedings and 
return the property to the owner (or in the case of a commercial 
fishing industry vessel for which a summons has been issued shall 
dismiss the summons), except where it is evidence of a violation of 
law; or
    (2) If the seizing agency determines that those factors have not 
been established, the agency shall proceed with the administrative 
forfeiture.


Sec.  8.21  Posting of substitute monetary amount in an administrative 
forfeiture proceeding.

    (a) Where property is seized for administrative forfeiture 
involving controlled substances in personal use quantities, the owner 
may obtain release of the property by posting a substitute monetary 
amount with the seizing agency to be held subject to forfeiture 
proceedings in place of the seized property to be released. The 
property will be released to the owner upon the payment of an amount 
equal to the government appraised value of the property if the property 
is not evidence of a violation of law and has no design or other 
characteristics that particularly suit it for use in illegal 
activities. This payment must be in the form of a traveler's check, a 
money order, a cashier's check, or an irrevocable letter of credit made 
payable to the seizing agency. A bond in the form of a cashier's check 
will be considered as paid once the check has been accepted for payment 
by the financial institution which issued the check.
    (b) If a substitute amount is posted and the property is 
administratively forfeited, the seizing agency will forfeit the 
substitute amount in lieu of the property.


Sec.  8.22  Special notice provision.

    At the time of seizure of property defined in Sec.  8.18 for 
violations involving the possession of personal use quantities of a 
controlled substance, the seizing agency must provide written notice to 
the possessor of the property

[[Page 56108]]

specifying the procedures for the filing of a petition for expedited 
release and for the posting of a substitute monetary bond as set forth 
in section 6079 of the Anti-Drug Abuse Act of 1988 and implementing 
regulations.

Subpart C--Other Applicable Provisions


Sec.  8.23  Redelegation of authority.

    (a) Redelegation of authority permitted.
    (1) The powers and responsibilities delegated to the DEA Forfeiture 
Counsel by the regulations in this part may be redelegated to attorneys 
working under the direct supervision of the DEA Forfeiture Counsel.
    (2) The powers and responsibilities delegated to the FBI Unit 
Chief, Legal Forfeiture Unit, by the regulations in this part may be 
redelegated to the attorneys working under the direct supervision of 
the FBI Unit Chief, Legal Forfeiture Unit.
    (3) The powers and responsibilities delegated to the Associate 
Chief Counsel, Office of Chief Counsel, ATF may be redelegated to the 
attorneys working under the direct supervision of the Associate Chief 
Counsel, Office of Chief Counsel, ATF.
    (b) Redelegation of authority not permitted.
    (1) The powers and responsibilities delegated to the DEA Forfeiture 
Counsel, the FBI Unit Chief, Legal Forfeiture Unit, and the ATF 
Associate Chief Counsel, Office of Chief Counsel to make decisions 
regarding the disposition of property before forfeiture pursuant to 
Sec.  8.14 may not be redelegated.
    (2) The powers and responsibilities delegated to the DEA Forfeiture 
Counsel, the FBI Unit Chief, Legal Forfeiture Unit, and the ATF 
Associate Chief Counsel, Office of Chief Counsel to make decisions 
regarding the delay of notice of forfeiture pursuant to Sec. Sec.  
8.9(c)(7) and (8) and 18 U.S.C. 983(a)(1)(B) and (C) may not be 
redelegated.

0
3. Revise part 9 to read as follows:

PART 9--REGULATIONS GOVERNING THE REMISSION OR MITIGATION OF 
ADMINISTRATIVE, CIVIL, AND CRIMINAL FORFEITURES

Sec.
9.1 Purpose, authority, and scope.
9.2 Definitions.
9.3 Petitions in administrative forfeiture cases.
9.4 Petitions in judicial forfeiture cases.
9.5 Criteria governing administrative and judicial remission and 
mitigation.
9.6 Special rules for specific petitioners.
9.7 Terms and conditions of remission and mitigation.
9.8 Remission procedures for victims.
9.9 Miscellaneous provisions.

    Authority:  5 U.S.C. 301; 8 U.S.C. 1103, 1324(b); 18 U.S.C. 981, 
983, 3051; 19 U.S.C. 1606, 1607, 1608, 1610, 1612(b), 1613, 1618; 21 
U.S.C. 822, 871, 872, 880, 881, 883, 958, 965; 28 U.S.C. 509, 510; 
Pub. L. 100-690, sec. 6079.


Sec.  9.1  Purpose, authority, and scope.

    (a) Purpose. This part sets forth the procedures for agency 
officials to follow when considering remission or mitigation of 
administrative forfeitures under the jurisdiction of the agency, and 
civil judicial and criminal judicial forfeitures under the jurisdiction 
of the Department of Justice's Criminal Division. The purpose of this 
part is to provide a basis for the partial or total remission of 
forfeiture for individuals who have an interest in the forfeited 
property but who did not participate in, or have knowledge of, the 
conduct that resulted in the property being subject to forfeiture and, 
where required, took all reasonable steps under the circumstances to 
ensure that such property would not be used, acquired, or disposed of 
contrary to law. Additionally, the regulations provide for partial or 
total mitigation of the forfeiture and imposition of alternative 
conditions in appropriate circumstances.
    (b) Authority to grant remission and mitigation.
    (1) Remission and mitigation functions in administrative 
forfeitures are performed by the agency seizing the property. Within 
the Federal Bureau of Investigation (FBI), authority to grant remission 
and mitigation is delegated to the Forfeiture Counsel, who is the Unit 
Chief, Legal Forfeiture Unit, Office of the General Counsel; within the 
Drug Enforcement Administration (DEA), authority to grant remission and 
mitigation is delegated to the Forfeiture Counsel, Office of Chief 
Counsel; and within the Bureau of Alcohol, Tobacco, Firearms, and 
Explosives (ATF), authority to grant remission and mitigation is 
delegated to the Associate Chief Counsel, Office of Chief Counsel.
    (2) Remission and mitigation functions in judicial cases are 
performed by the Criminal Division of the Department of Justice. Within 
the Criminal Division, authority to grant remission and mitigation is 
delegated to the Chief, Asset Forfeiture and Money Laundering Section.
    (3) The powers and responsibilities delegated by this part may be 
redelegated to attorneys or managers working under the supervision of 
the designated officials.
    (c) Scope. This part governs any petition for remission filed with 
the Attorney General and supersedes any Department of Justice 
regulation governing petitions for remission, to the extent such 
regulation is inconsistent with this part.
    (d) The time periods and internal requirements established in this 
part are designed to guide the orderly administration of the remission 
and mitigation process and are not intended to create rights or 
entitlements in favor of individuals seeking remission or mitigation. 
This part applies to all forfeiture actions commenced on or after 
October 12, 2012.


Sec.  9.2  Definitions.

    As used in this part:
    Administrative forfeiture means the process by which property may 
be forfeited by a seizing agency rather than through judicial 
proceedings. Administrative forfeiture has the same meaning as 
nonjudicial forfeiture, as that term is used in 18 U.S.C. 983.
    Appraised value means the estimated market value of property at the 
time and place of seizure if such or similar property were freely 
offered for sale between a willing seller and a willing buyer.
    Assets Forfeiture Fund means the Department of Justice Assets 
Forfeiture Fund or Department of the Treasury Forfeiture Fund, 
depending upon the identity of the seizing agency.
    Attorney General means the Attorney General of the United States or 
his or her designee.
    Beneficial owner means a person with actual use of, as well as an 
interest in, the property subject to forfeiture.
    Chief, Asset Forfeiture and Money Laundering Section, and Chief, 
refer to the Chief of the Asset Forfeiture and Money Laundering 
Section, Criminal Division, United States Department of Justice.
    General creditor means one whose claim or debt is not secured by a 
specific right to obtain satisfaction against the particular property 
subject to forfeiture.
    Judgment creditor means one who has obtained a judgment against the 
debtor but has not yet received full satisfaction of the judgment.
    Judicial forfeiture means either a civil or a criminal proceeding 
in a United States District Court that may result in a final judgment 
and order of forfeiture.
    Lienholder means a creditor whose claim or debt is secured by a 
specific right to obtain satisfaction against the particular property 
subject to forfeiture. A lien creditor qualifies as a lienholder if the 
lien:

[[Page 56109]]

    (1) Was established by operation of law or contract;
    (2) Was created as a result of an exchange of money, goods, or 
services; and
    (3) Is perfected against the specific property forfeited for which 
remission or mitigation is sought (e.g., a real estate mortgage; a 
mechanic's lien).
    Net equity means the amount of a lienholder's monetary interest in 
property subject to forfeiture. Net equity shall be computed by 
determining the amount of unpaid principal and unpaid interest at the 
time of seizure and by adding to that sum unpaid interest calculated 
from the date of seizure through the last full month prior to the date 
of the decision on the petition. Where a rate of interest is set forth 
in a security agreement, the rate of interest to be used in this 
computation will be the annual percentage rate so specified in the 
security agreement that is the basis of the lienholder's interest. In 
this computation, however, there shall be no allowances for attorney 
fees, accelerated or enhanced interest charges, amounts set by contract 
as damages, unearned extended warranty fees, insurance, service 
contract charges incurred after the date of seizure, allowances for 
dealer's reserve, or any other similar charges.
    Nonjudicial forfeiture has the same meaning as administrative 
forfeiture as defined in this section.
    Owner means the person in whom primary title is vested or whose 
interest is manifested by the actual and beneficial use of the 
property, even though the title is vested in another. A victim of an 
offense, as defined in this section, may also be an owner if he or she 
has a present legally cognizable ownership interest in the property 
forfeited. A nominal owner of property will not be treated as its true 
owner if he or she is not its beneficial owner.
    Person means an individual, partnership, corporation, joint 
business enterprise, estate, or other legal entity capable of owning 
property.
    Petition means a petition for remission or mitigation of forfeiture 
under the regulations in this part. This definition includes a petition 
for restoration of the proceeds of sale of forfeited property and a 
petition for the value of forfeited property placed into official use.
    Petitioner means the person applying for remission, mitigation, or 
restoration of the proceeds of sale, or for the appraised value of 
forfeited property, under this part. A petitioner may be an owner as 
defined in this section, a lienholder as defined in this section, or a 
victim as defined in this section, subject to the limitations of Sec.  
9.8.
    Property means real or personal property of any kind capable of 
being owned or possessed.
    Record means two or more arrests for related crimes, unless the 
arrestee was acquitted or the charges were dismissed for lack of 
evidence, a conviction for a related crime or completion of sentence 
within ten years of the acquisition of the property subject to 
forfeiture, or two convictions for a related crime at any time in the 
past.
    Related crime as used in this section and Sec.  9.6(e) means any 
crime similar in nature to that which gives rise to the seizure of 
property for forfeiture. For example, where property is seized for a 
violation of the federal laws relating to drugs, a related crime would 
be any offense involving a violation of the federal laws relating to 
drugs or the laws of any state or political subdivision thereof 
relating to drugs.
    Related offense as used in Sec.  9.8 means:
    (1) Any predicate offense charged in a federal Racketeer Influenced 
and Corrupt Organizations Act (RICO) count for which forfeiture was 
ordered; or
    (2) An offense committed as part of the same scheme or design, or 
pursuant to the same conspiracy, as was involved in the offense for 
which forfeiture was ordered.
    Ruling official means any official to whom decision-making 
authority has been delegated pursuant to Sec.  9.1(b).
    Seizing agency means the federal agency that seized the property or 
adopted the seizure of another agency for federal forfeiture.
    Victim means a person who has incurred a pecuniary loss as a direct 
result of the commission of the offense underlying a forfeiture. A drug 
user is not considered a victim of a drug trafficking offense under 
this definition. A victim does not include one who acquires a right to 
sue the perpetrator of the criminal offense for any loss by assignment, 
subrogation, inheritance, or otherwise from the actual victim, unless 
that person has acquired an actual ownership interest in the forfeited 
property; provided however, that if a victim has received compensation 
from insurance or any other source with respect to a pecuniary loss, 
remission may be granted to the third party who provided the 
compensation, up to the amount of the victim's pecuniary loss as 
defined in Sec.  9.8(c).
    Violator means the person whose use or acquisition of the property 
in violation of the law subjected such property to seizure for 
forfeiture.


Sec.  9.3  Petitions in administrative forfeiture cases.

    (a) Notice of seizure. The notice of seizure and intent to forfeit 
the property shall advise any persons who may have a present ownership 
interest in the property to submit their petitions for remission or 
mitigation within 30 days of the date they receive the notice in order 
to facilitate processing. Petitions shall be considered any time after 
notice until the property has been forfeited, except in cases involving 
petitions to restore the proceeds from the sale of forfeited property. 
A notice of seizure shall include the title of the seizing agency, the 
ruling official, the mailing and street address of the official to whom 
petitions should be sent, and an asset identifier number.
    (b) Persons who may file.
    (1) A petition for remission or mitigation must be filed by a 
petitioner as defined in Sec.  9.2 or as prescribed in Sec.  9.9(g) and 
(h). A person or person on their behalf may not file a petition if, 
after notice or knowledge of the fact that a warrant or process has 
been issued for his apprehension, in order to avoid criminal 
prosecution, the person:
    (i) Purposely leaves the jurisdiction of the United States;
    (ii) Declines to enter or reenter the United States to submit to 
its jurisdiction; or
    (iii) Otherwise evades the jurisdiction of the court in which a 
criminal matter is pending against the person.
    (2) Paragraph (b)(1) of this section applies to a petition filed by 
a corporation if any majority shareholder, or individual filing the 
claim on behalf of the corporation:
    (i) Purposely leaves the jurisdiction of the United States;
    (ii) Declines to enter or reenter the United States to submit to 
its jurisdiction; or
    (iii) Otherwise evades the jurisdiction of the court in which a 
criminal matter is pending against the person.
    (c) Contents of petition.
    (1) All petitions must include the following information in clear 
and concise terms:
    (i) The name, address, and social security or other taxpayer 
identification number of the person claiming an interest in the seized 
property who is seeking remission or mitigation;
    (ii) The name of the seizing agency, the asset identifier number, 
and the date and place of seizure;
    (iii) A complete description of the property, including make, 
model, and serial numbers, if any; and
    (iv) A description of the petitioner's interest in the property as 
owner, lienholder, or otherwise, supported by

[[Page 56110]]

original or certified bills of sale, contracts, deeds, mortgages, or 
other documentary evidence. Such documentation includes evidence 
establishing the source of funds for seized currency or the source of 
funds used to purchase the seized asset.
    (2) Any factual recitation or documentation of any type in a 
petition must be supported by a declaration under penalty of perjury 
that meets the requirements of 28 U.S.C. 1746.
    (d) Releases. In addition to the contents of the petition for 
remission or mitigation set forth in paragraph (c) of this section, 
upon request of the agency, the petitioner shall also furnish the 
agency with an instrument executed by the titled or registered owner 
and any other known claimant of an interest in the property releasing 
interest in such property.
    (e) Filing petition with agency.
    (1) A petition for remission or mitigation subject to 
administrative forfeiture is to be sent to the official address 
provided in the notice of seizure and shall be sworn to by the 
petitioner or by the petitioner's attorney upon information and belief, 
supported by the client's sworn notice of representation pursuant to 28 
U.S.C. 1746, as set out in Sec.  9.9(g).
    (2) If the notice of seizure does not provide an official address, 
the petition shall be addressed to the appropriate federal agency as 
follows:
    (i)(A) DEA: All submissions must be filed with the Forfeiture 
Counsel, Asset Forfeiture Section, Office of Chief Counsel, Drug 
Enforcement Administration, HQS Forfeiture Response, P.O. Box 1475, 
Quantico, Virginia 22134-1475.
    (B) Correspondence via private delivery must be filed with The 
Forfeiture Counsel, Asset Forfeiture Section (CCF), Office of Chief 
Counsel, Drug Enforcement Administration, 8701 Morrissette Drive, 
Springfield, Virginia 22152.
    (C) Submission by facsimile or other electronic means will not be 
accepted.
    (ii)(A) FBI: All submissions must be filed with the FBI Special 
Agent in Charge at the Field Office that seized the property.
    (B) Submission by facsimile or other electronic means will not be 
accepted.
    (iii)(A) ATF: All submissions must be filed with the Office of 
Chief Counsel, Attention: Forfeiture Counsel, 99 New York Avenue NE., 
Washington, DC 20226.
    (B) Submission by facsimile or other electronic means will not be 
accepted.
    (f) Agency investigation. Upon receipt of a petition, the seizing 
agency shall investigate the merits of the petition and may prepare a 
written report containing the results of that investigation. This 
report shall be submitted to the ruling official for review and 
consideration.
    (g) Ruling. Upon receipt of the petition and the agency report, the 
ruling official for the seizing agency shall review the petition and 
the report, if any, and shall rule on the merits of the petition. No 
hearing shall be held.
    (h) Petitions granted. If the ruling official grants a remission or 
mitigation of the forfeiture, a copy of the decision shall be mailed to 
the petitioner or, if represented by an attorney, to the petitioner's 
attorney. A copy shall also be sent to the United States Marshals 
Service (USMS) or other property custodian. The written decision shall 
include the terms and conditions, if any, upon which the remission or 
mitigation is granted and the procedures the petitioner must follow to 
obtain release of the property or the monetary interest therein.
    (i) Petitions denied. If the ruling official denies a petition, a 
copy of the decision shall be mailed to the petitioner or, if 
represented by an attorney, to the petitioner's attorney of record. A 
copy of the decision shall also be sent to the USMS or other property 
custodian. The decision shall specify the reason that the petition was 
denied. The decision shall advise the petitioner that a request for 
reconsideration of the denial of the petition may be submitted to the 
ruling official in accordance with paragraph (j) of this section.
    (j) Request for reconsideration.
    (1) A request for reconsideration of the denial of the petition 
shall be considered if:
    (i) It is postmarked or received by the office of the ruling 
official within 10 days from the receipt of the notice of denial of the 
petition by the petitioner; and
    (ii) The request is based on information or evidence not previously 
considered that is material to the basis for the denial or presents a 
basis clearly demonstrating that the denial was erroneous.
    (2) In no event shall a request for reconsideration be decided by 
the same ruling official who ruled on the original petition.
    (3) Only one request for reconsideration of a denial of a petition 
shall be considered.
    (k) Restoration of proceeds from sale.
    (1) A petition for restoration of the proceeds from the sale of 
forfeited property, or for the appraised value of forfeited property 
when the forfeited property has been retained by or delivered to a 
government agency for official use, may be submitted by an owner or 
lienholder in cases in which the petitioner:
    (i) Did not know of the seizure prior to the entry of a declaration 
of forfeiture; and
    (ii) Could not reasonably have known of the seizure prior to the 
entry of a declaration of forfeiture.
    (2) Such a petition shall be submitted pursuant to paragraphs (b) 
through (e) of this section within 90 days of the date the property is 
sold or otherwise disposed of.


Sec.  9.4  Petitions in judicial forfeiture cases.

    (a) Notice of seizure. The notice of seizure and intent to forfeit 
the property shall advise any persons who may have a present ownership 
interest in the property to submit their petitions for remission or 
mitigation within 30 days of the date they receive the notice in order 
to facilitate processing. Petitions shall be considered any time after 
notice until such time as the forfeited property is placed in official 
use, sold, or otherwise disposed of according to law, except in cases 
involving petitions to restore property. A notice of seizure shall 
include the title of the ruling official and the mailing and street 
address of the official to whom petitions should be sent, the name of 
the agency seizing the property, an asset identifier number, and the 
district court docket number.
    (b) Persons who may file. A petition for remission or mitigation 
must be filed by a petitioner as defined in Sec.  9.2 or as prescribed 
in Sec.  9.9(g) and (h).
    (c) Contents of petition.
    (1) All petitions must include the following information in clear 
and concise terms:
    (i) The name, address, and social security or other taxpayer 
identification number of the person claiming an interest in the seized 
property who is seeking remission or mitigation;
    (ii) The name of the seizing agency, the asset identifier number, 
and the date and place of seizure;
    (iii) The district court docket number;
    (iv) A complete description of the property, including the address 
or legal description of real property, and make, model, and serial 
numbers of personal property, if any; and
    (v) A description of the petitioner's interest in the property as 
owner, lienholder, or otherwise, supported by original or certified 
bills of sale, contracts, mortgages, deeds, or other documentary 
evidence.
    (2) Any factual recitation or documentation of any type in a 
petition must be supported by a declaration under penalty of perjury 
that meets the requirements of 28 U.S.C. 1746.

[[Page 56111]]

    (d) Releases. In addition to the content of the petition for 
remission or mitigation set forth in paragraph (c) 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.
    (e) Filing petition with Department of Justice. A petition for 
remission or mitigation of a judicial forfeiture shall be addressed to 
the Attorney General; shall be sworn to by the petitioner or by the 
petitioner's attorney upon information and belief, supported by the 
client's sworn notice of representation pursuant to 28 U.S.C. 1746, as 
set forth in Sec.  9.9(g); and shall be submitted to the U.S. Attorney 
for the district in which the judicial forfeiture proceedings are 
brought.
    (f) Agency investigation and recommendation; U.S. Attorney's 
recommendation. Upon receipt of a petition, the U.S. Attorney shall 
direct the seizing agency to investigate the merits of the petition 
based on the information provided by the petitioner and the totality of 
the agency's investigation of the underlying basis for forfeiture. The 
agency shall submit to the U.S. Attorney a report of its investigation 
and its recommendation on whether the petition should be granted or 
denied. Upon receipt of the agency's report and recommendation, the 
U.S. Attorney shall forward to the Chief, Asset Forfeiture and Money 
Laundering Section, the petition, the seizing agency's report and 
recommendation, and the U.S. Attorney's recommendation on whether the 
petition should be granted or denied.
    (g) Ruling. The Chief shall rule on the petition. No hearing shall 
be held. The Chief shall not rule on any petition for remission if such 
remission was previously denied by the agency pursuant to Sec.  9.3.
    (h) Petitions under Internal Revenue Service liquor laws. The Chief 
shall accept and consider petitions submitted in judicial forfeiture 
proceedings under the Internal Revenue Service liquor laws only prior 
to the time a decree of forfeiture is entered. Thereafter, the district 
court has exclusive jurisdiction.
    (i) Petitions granted. If the Chief grants a remission or mitigates 
the forfeiture, the Chief shall mail a copy of the decision to the 
petitioner (or, if represented by an attorney, to the petitioner's 
attorney) and shall mail or transmit electronically a copy of the 
decision to the appropriate U.S. Attorney, the USMS or other property 
custodian, and the seizing agency. The written decision shall include 
the terms and conditions, if any, upon which the remission or 
mitigation is granted and the procedures the petitioner must follow to 
obtain release of the property or the monetary interest therein. The 
Chief shall advise the petitioner or the petitioner's attorney to 
consult with the U.S. Attorney as to such terms and conditions. The 
U.S. Attorney shall confer with the seizing agency regarding the 
release and shall coordinate disposition of the property with that 
office and the USMS or other property custodian.
    (j) Petitions denied. If the Chief denies a petition, a copy of 
that decision shall be mailed to the petitioner (or, if represented by 
an attorney, to the petitioner's attorney of record) and mailed or 
transmitted electronically to the appropriate U.S. Attorney, the USMS 
or other property custodian, and to the seizing agency. The decision 
shall specify the reason that the petition was denied. The decision 
shall advise the petitioner that a request for reconsideration of the 
denial of the petition may be submitted to the Chief at the address 
provided in the decision, in accordance with paragraph (k) of this 
section.
    (k) Request for reconsideration.
    (1) A request for reconsideration of the denial shall be considered 
if:
    (i) It is postmarked or received by the Asset Forfeiture and Money 
Laundering Section at the address contained in the decision denying the 
petition within 10 days from the receipt of the notice of denial of the 
petition by the petitioner;
    (ii) A copy of the request is also received by the appropriate U.S. 
Attorney within 10 days of the receipt of the denial by the petitioner; 
and
    (iii) The request is based on information or evidence not 
previously considered that is material to the basis for the denial or 
presents a basis clearly demonstrating that the denial was erroneous.
    (2) In no event shall a request for reconsideration be decided by 
the ruling official who ruled on the original petition.
    (3) Only one request for reconsideration of a denial of a petition 
shall be considered.
    (4) Upon receipt of the request for reconsideration of the denial 
of a petition, disposition of the property will be delayed pending 
notice of the decision at the request of the Chief. If the request for 
reconsideration is not received within the prescribed period, the USMS 
or other property custodian may dispose of the property.
    (l) Restoration of proceeds from sale.
    (1) A petition for restoration of the proceeds from the sale of 
forfeited property, or for the appraised value of forfeited property 
when the forfeited property has been retained by or delivered to a 
government agency for official use, may be submitted by an owner or 
lienholder in cases in which the petitioner:
    (i) Did not know of the seizure prior to the entry of a final order 
of forfeiture; and
    (ii) Could not reasonably have known of the seizure prior to the 
entry of a final order of forfeiture.
    (2) Such a petition must be submitted pursuant to paragraphs (b) 
through (e) of this section within 90 days of the date the property was 
sold or otherwise disposed of.


Sec.  9.5  Criteria governing administrative and judicial remission and 
mitigation.

    (a) Remission.
    (1) The ruling official shall not grant remission of a forfeiture 
unless the petitioner establishes that the petitioner has a valid, good 
faith, and legally cognizable interest in the seized property as owner 
or lienholder as defined in this part and is an innocent owner within 
the meaning of 18 U.S.C. 983(d)(2)(A) or 983(d)(3)(A).
    (2) For purposes of paragraph (a)(1) of this section, the knowledge 
and responsibilities of a petitioner's representative, agent, or 
employee are imputed to the petitioner where the representative, agent, 
or employee was acting in the course of his or her employment and in 
furtherance of the petitioner's business.
    (3) The petitioner has the burden of establishing the basis for 
granting a petition for remission or mitigation of forfeited property, 
a restoration of proceeds of sale or appraised value of forfeited 
property, or a reconsideration of a denial of such a petition. Failure 
to provide information or documents and to submit to interviews, as 
requested, may result in a denial of the petition.
    (4) The ruling official shall presume a valid forfeiture and shall 
not consider whether the evidence is sufficient to support the 
forfeiture.
    (5) Willful, materially false statements or information made or 
furnished by the petitioner in support of a petition for remission or 
mitigation of forfeited property, the restoration of proceeds or 
appraised value of forfeited property, or the reconsideration of a 
denial of any such petition, shall be grounds for denial of such 
petition and possible prosecution for the filing of false statements.
    (b) Mitigation.

[[Page 56112]]

    (1) The ruling official may grant mitigation to a party not 
involved in the commission of the offense underlying forfeiture:
    (i) Where the petitioner has not met the minimum conditions for 
remission, but the ruling official finds that some relief should be 
granted to avoid extreme hardship, and that return of the property 
combined with imposition of monetary or other conditions of mitigation 
in lieu of a complete forfeiture will promote the interest of justice 
and will not diminish the deterrent effect of the law. Extenuating 
circumstances justifying such a finding include those circumstances 
that reduce the responsibility of the petitioner for knowledge of the 
illegal activity, knowledge of the criminal record of a user of the 
property, or failure to take reasonable steps to prevent the illegal 
use or acquisition by another for some reason, such as a reasonable 
fear of reprisal; or
    (ii) Where the minimum standards for remission have been satisfied 
but the overall circumstances are such that, in the opinion of the 
ruling official, complete relief is not warranted.
    (2) The ruling official may in his or her discretion grant 
mitigation to a party involved in the commission of the offense 
underlying the forfeiture where certain mitigating factors exist, 
including, but not limited to: the lack of a prior record or evidence 
of similar criminal conduct; if the violation does not include drug 
distribution, manufacturing, or importation, the fact that the violator 
has taken steps, such as drug treatment, to prevent further criminal 
conduct; the fact that the violation was minimal and was not part of a 
larger criminal scheme; the fact that the violator has cooperated with 
federal, state, or local investigations relating to the criminal 
conduct underlying the forfeiture; or the fact that complete forfeiture 
of an asset is not necessary to achieve the legitimate purposes of 
forfeiture.
    (3) Mitigation may take the form of a monetary condition or the 
imposition of other conditions relating to the continued use of the 
property, and the return of the property, in addition to the imposition 
of any other costs that would be chargeable as a condition to 
remission. This monetary condition is considered as an item of cost 
payable by the petitioner, and shall be deposited into the Assets 
Forfeiture Fund as an amount realized from forfeiture in accordance 
with the applicable statute. If the petitioner fails to accept the 
ruling official's mitigation decision or any of its conditions, or 
fails to pay the monetary amount within 20 days of the receipt of the 
decision, the property shall be sold, and the monetary amount imposed 
and other costs chargeable as a condition to mitigation shall be 
subtracted from the proceeds of the sale before transmitting the 
remainder to the petitioner.


Sec.  9.6  Special rules for specific petitioners.

    (a) General creditors. A general creditor may not be granted 
remission or mitigation of forfeiture unless he or she otherwise 
qualifies as petitioner under this part.
    (b) Rival claimants. If the beneficial owner of the forfeited 
property and the owner of a security interest in the same property each 
file a petition, and if both petitions are found to be meritorious, the 
claims of the beneficial owner shall take precedence.
    (c) Voluntary bailments. A petitioner who allows another to use his 
or her property without cost, and who is not in the business of lending 
money secured by property or of leasing or renting property for profit, 
shall be granted remission or mitigation of forfeiture in accordance 
with the provisions of Sec.  9.5.
    (d) Lessors. A person engaged in the business of leasing or renting 
real or personal property on a long-term basis with the right to 
sublease shall not be entitled to remission or mitigation of a 
forfeiture of such property unless the lessor can demonstrate 
compliance with all the requirements of Sec.  9.5.
    (e) Straw owners. A petition by any person who has acquired a 
property interest recognizable under this part, and who knew or had 
reason to believe that the interest was conveyed by the previous owner 
for the purpose of circumventing seizure, forfeiture, or the 
regulations in this part, shall be denied. A petition by a person who 
purchases or owns property for another who has a record for related 
crimes as defined in Sec.  9.2, or a petition by a lienholder who knows 
or has reason to believe that the purchaser or owner of record is not 
the real purchaser or owner, shall be denied unless both the purchaser 
of record and the real purchaser or owner meet the requirements of 
Sec.  9.5.
    (f) Judgment creditors.
    (1) A judgment creditor will be recognized as a lienholder if:
    (i) The judgment was duly recorded before the seizure of the 
property for forfeiture;
    (ii) Under applicable state or local law, the judgment constitutes 
a valid lien on the property that attached to it before the seizure of 
the property for forfeiture; and
    (iii) The petitioner had no knowledge of the commission of any act 
or acts giving rise to the forfeiture at the time the judgment became a 
lien on the forfeited property.
    (2) A judgment creditor will not be recognized as a lienholder if 
the property in question is not property of which the judgment debtor 
is entitled to claim ownership under applicable state or local law 
(e.g., stolen property). A judgment creditor is entitled under this 
part to no more than the amount of the judgment, exclusive of any 
interest, costs, or other fees including attorney fees associated with 
the action that led to the judgment or its collection.
    (3) A judgment creditor's lien must be registered in the district 
where the property is located if the judgment was obtained outside the 
district.


Sec.  9.7  Terms and conditions of remission and mitigation.

    (a) Owners.
    (1) An owner's interest in property that has been forfeited is 
represented by the property itself or by a monetary interest equivalent 
to that interest at the time of seizure. Whether the property or a 
monetary equivalent will be remitted to an owner shall be determined at 
the discretion of the ruling official.
    (2) If a civil judicial forfeiture action against the property is 
pending, release of the property must await an appropriate court order.
    (3) Where the Government sells or disposes of the property prior to 
the grant of the remission, the owner shall receive the proceeds of 
that sale, less any costs incurred by the Government in the sale. The 
ruling official, at his or her discretion, may waive the deduction of 
costs and expenses incident to the forfeiture.
    (4) Where the owner does not comply with the conditions imposed 
upon release of the property by the ruling official, the property shall 
be sold. Following the sale, the proceeds shall be used to pay all 
costs of the forfeiture and disposition of the property, in addition to 
any monetary conditions imposed. The remaining balance shall be paid to 
the owner.
    (b) Lienholders.
    (1) When the forfeited property is to be retained for official use 
or transferred to a state or local law enforcement agency or foreign 
government pursuant to law, and remission or mitigation has been 
granted to a lienholder, the recipient of the property shall assure 
that:
    (i) In the case of remission, the lien is satisfied as determined 
through the petition process; or
    (ii) In the case of mitigation, an amount equal to the net equity, 
less any monetary conditions imposed, is paid to the lienholder prior 
to the release of the

[[Page 56113]]

property to the recipient agency or foreign government.
    (2) When the forfeited property is not retained for official use or 
transferred to another agency or foreign government pursuant to law, 
the lienholder shall be notified by the ruling official of the right to 
select either of the following alternatives:
    (i) Return of property. The lienholder may obtain possession of the 
property after paying the United States, through the ruling official, 
the costs and expenses incident to the forfeiture, the amount, if any, 
by which the appraised value of the property exceeds the lienholder's 
net equity in the property, and any amount specified in the ruling 
official's decision as a condition to remit the property. The ruling 
official, at his or her discretion, may waive costs and expenses 
incident to the forfeiture. The ruling official shall forward a copy of 
the decision, a memorandum of disposition, and the original releases to 
the USMS or other property custodian who shall thereafter release the 
property to the lienholder; or
    (ii) Sale of property and payment to lienholder. Subject to Sec.  
9.9(a), upon sale of the property, the lienholder may receive the 
payment of a monetary amount up to the sum of the lienholder's net 
equity, less the expenses and costs incident to the forfeiture and sale 
of the property, and any other monetary conditions imposed. The ruling 
official, at his or her discretion, may waive costs and expenses 
incident to the forfeiture.
    (3) If the lienholder does not notify the ruling official of the 
selection of one of the two options set forth in paragraph (b)(2) of 
this section within 20 days of the receipt of notification, the ruling 
official shall direct the USMS or other property custodian to sell the 
property and pay the lienholder an amount up to the net equity, less 
the costs and expenses incurred incident to the forfeiture and sale, 
and any monetary conditions imposed. In the event a lienholder 
subsequently receives a payment of any kind on the debt owed for which 
he or she received payment as a result of the granting of remission or 
mitigation, the lienholder shall reimburse the Assets Forfeiture Fund 
to the extent of the payment received.
    (4) Where the lienholder does not comply with the conditions 
imposed upon the release of the property, the property shall be sold 
after forfeiture. From the proceeds of the sale, all costs incident to 
the forfeiture and sale shall first be deducted, and the balance up to 
the net equity, less any monetary conditions, shall be paid to the 
lienholder.


Sec.  9.8  Remission procedures for victims.

    This section applies to victims of an offense underlying the 
forfeiture of property, or of a related offense, who do not have a 
present ownership interest in the forfeited property (or, in the case 
of multiple victims of an offense, who do not have a present ownership 
interest in the forfeited property that is clearly superior to that of 
other petitioner victims). This section applies only with respect to 
property forfeited pursuant to statutes that explicitly authorize 
restoration or remission of forfeited property to victims. A victim 
requesting remission under this section may concurrently request 
remission as an owner, pursuant to the regulations set forth in 
Sec. Sec.  9.3, 9.4, and 9.7. The claims of victims granted remission 
as both an owner and victim shall, like claims of other owners, have 
priority over the claims of any non-owner victims whose claims are 
recognized under this section.
    (a) Remission procedure for victims.
    (1) Where to file. Persons seeking remission as victims shall file 
petitions for remission with the appropriate deciding official as 
described in Sec. Sec.  9.3(e) (administrative forfeiture) or 9.4(e) 
(judicial forfeiture).
    (2) Time of decision. The deciding official or his designee as 
described in Sec.  9.1(b) may consider petitions filed by persons 
claiming eligibility for remission as victims at any time prior to the 
disposal of the forfeited property in accordance with law.
    (3) Request for reconsideration. Persons denied remission under 
this section may request reconsideration of the denial, in accordance 
with Sec. Sec.  9.3(j) (administrative forfeiture) or 9.4(k) (judicial 
forfeiture).
    (b) Qualification to file. A victim, as defined in Sec.  9.2, may 
be granted remission, if in addition to complying with the other 
applicable provisions of Sec.  9.8, the victim satisfactorily 
demonstrates that:
    (1) A pecuniary loss of a specific amount has been directly caused 
by the criminal offense, or related offense, that was the underlying 
basis for the forfeiture, and that the loss is supported by documentary 
evidence including invoices and receipts;
    (2) The pecuniary loss is the direct result of the illegal acts and 
is not the result of otherwise lawful acts that were committed in the 
course of a criminal offense;
    (3) The victim did not knowingly contribute to, participate in, 
benefit from, or act in a willfully blind manner towards the commission 
of the offense, or related offense, that was the underlying basis of 
the forfeiture;
    (4) The victim has not in fact been compensated for the wrongful 
loss of the property by the perpetrator or others; and
    (5) The victim does not have recourse reasonably available to other 
assets from which to obtain compensation for the wrongful loss of the 
property.
    (c) Pecuniary loss. The amount of the pecuniary loss suffered by a 
victim for which remission may be granted is limited to the fair market 
value of the property of which the victim was deprived as of the date 
of the occurrence of the loss. No allowance shall be made for interest 
forgone or for collateral expenses incurred to recover lost property or 
to seek other recompense.
    (d) Torts. A tort associated with illegal activity that formed the 
basis for the forfeiture shall not be a basis for remission, unless it 
constitutes the illegal activity itself, nor shall remission be granted 
for physical injuries to a petitioner or for damage to a petitioner's 
property.
    (e) Denial of petition. In the exercise of his or her discretion, 
the ruling official may decline to grant remission where:
    (1) There is substantial difficulty in calculating the pecuniary 
loss incurred by the victim or victims;
    (2) The amount of the remission, if granted, would be small 
compared with the amount of expenses incurred by the Government in 
determining whether to grant remission; or
    (3) The total number of victims is large and the monetary amount of 
the remission so small as to make its granting impractical.
    (f) Pro rata basis. In granting remission to multiple victims 
pursuant to this section, the ruling official should generally grant 
remission on a pro rata basis to recognized victims when petitions 
cannot be granted in full due to the limited value of the forfeited 
property. However, the ruling official may consider the following 
factors, among others, in establishing appropriate priorities in 
individual cases:
    (1) The specificity and reliability of the evidence establishing a 
loss;
    (2) The fact that a particular victim is suffering an extreme 
financial hardship;
    (3) The fact that a particular victim has cooperated with the 
Government in the investigation related to the forfeiture or to a 
related prosecution or civil action; and
    (4) In the case of petitions filed by multiple victims of related 
offenses, the fact that a particular victim is a victim of the offense 
underlying the forfeiture.
    (g) Reimbursement. Any petitioner granted remission pursuant to 
this part

[[Page 56114]]

shall reimburse the Assets Forfeiture Fund for the amount received to 
the extent the individual later receives compensation for the loss of 
the property from any other source. The petitioner shall surrender the 
reimbursement upon payment from any secondary source.
    (h) Claims of financial institution regulatory agencies. In cases 
involving property forfeitable under 18 U.S.C. 981(a)(1)(C) or 
(a)(1)(D), the ruling official may decline to grant a petition filed by 
a petitioner in whole or in part due to the lack of sufficient 
forfeitable funds to satisfy both the petition and claims of the 
financial institution regulatory agencies pursuant to 18 U.S.C. 
981(e)(3) or (7). Generally, claims of financial institution regulatory 
agencies pursuant to 18 U.S.C. 981(e)(3) or (7) shall take priority 
over claims of victims.
    (i) Amount of remission. Consistent with the Assets Forfeiture Fund 
statute (28 U.S.C. 524(c)), the amount of remission shall not exceed 
the victim's share of the net proceeds of the forfeitures associated 
with the activity that caused the victim's loss. The calculation of net 
proceeds includes, but is not limited to, the deduction of allowable 
government expenses and valid third-party claims.


Sec.  9.9  Miscellaneous provisions.

    (a) Priority of payment. Except where otherwise provided in this 
part, costs incurred by the USMS and other agencies participating in 
the forfeiture that were incident to the forfeiture, sale, or other 
disposition of the property shall be deducted from the amount available 
for remission or mitigation. Such costs include, but are not limited 
to, court costs, storage costs, brokerage and other sales-related 
costs, the amount of any liens and associated costs paid by the 
Government on the property, costs incurred in paying the ordinary and 
necessary expenses of a business seized for forfeiture, awards for 
information as authorized by statute, expenses of trustees or other 
assistants pursuant to paragraph (c) of this section, investigative or 
prosecutive costs specially incurred incident to the particular 
forfeiture, and costs incurred incident to the processing of the 
petition(s) for remission or mitigation. The remaining balance shall be 
available for remission or mitigation. The ruling official shall direct 
the distribution of the remaining balance in the following order of 
priority, except that the ruling official may exercise discretion in 
determining the priority between petitioners belonging to classes 
described in paragraphs (a)(3) and (4) of this section in exceptional 
circumstances:
    (1) Owners;
    (2) Lienholders;
    (3) Federal financial institution regulatory agencies (pursuant to 
paragraph (e) of this section), not constituting owners or lienholders; 
and
    (4) Victims not constituting owners or lienholders (pursuant to 
Sec.  9.8).
    (b) Sale or disposition of property prior to ruling. If forfeited 
property has been sold or otherwise disposed of prior to a ruling, the 
ruling official may grant relief in the form of a monetary amount. The 
amount realized by the sale of the property is presumed to be the value 
of the property. Monetary relief shall not be greater than the 
appraised value of the property at the time of seizure and shall not 
exceed the amount realized from the sale or other disposition. The 
proceeds of the sale shall be distributed as follows:
    (1) Payment of the Government's expenses incurred incident to the 
forfeiture and sale, including court costs and storage charges, if any;
    (2) Payment to the petitioner of an amount up to his or her 
interest in the property;
    (3) Payment to the Assets Forfeiture Fund of all other costs and 
expenses incident to the forfeiture;
    (4) In the case of victims, payment of any amount up to the amount 
of his or her loss; and
    (5) Payment of the balance remaining, if any, to the Assets 
Forfeiture Fund.
    (c) Trustees and other assistants. In the exercise of his or her 
discretion, the ruling official, with the approval of the Asset 
Forfeiture and Money Laundering Section, may use the services of a 
trustee, other government official, or appointed contractors to notify 
potential petitioners, process petitions, and make recommendations to 
the ruling official on the distribution of property to petitioners. The 
expense for such assistance shall be paid out of the forfeited funds.
    (d) Other agencies of the United States. Where another agency of 
the United States is entitled to remission or mitigation of forfeited 
assets because of an interest that is recognizable under this part or 
is eligible for such transfer pursuant to 18 U.S.C. 981(e)(6), such 
agency shall request the transfer in writing, in addition to complying 
with any applicable provisions of Sec. Sec.  9.3 through 9.5. The 
decision to make such transfer shall be made in writing by the ruling 
official.
    (e) Financial institution regulatory agencies. A ruling official 
may direct the transfer of property under 18 U.S.C. 981(e) to certain 
federal financial institution regulatory agencies or an entity acting 
on their behalf, upon receipt of a written request, in lieu of ruling 
on a petition for remission or mitigation.
    (f) Transfers to foreign governments. A ruling official may decline 
to grant remission to any petitioner other than an owner or lienholder 
so that forfeited assets may be transferred to a foreign government 
pursuant to 18 U.S.C. 981(i)(1), 19 U.S.C. 1616a(c)(2), or 21 U.S.C. 
881(e)(1)(E).
    (g) Filing by attorneys.
    (1) A petition for remission or mitigation may be filed by a 
petitioner or by his or her attorney or legal guardian. If an attorney 
files on behalf of the petitioner, the petition must include a signed 
and sworn statement by the client-petitioner stating that:
    (i) The attorney has the authority to represent the petitioner in 
this proceeding;
    (ii) The petitioner has fully reviewed the petition; and
    (iii) The petition is truthful and accurate in every respect.
    (2) Verbal notification of representation is not acceptable. 
Responses and notification of rulings shall not be sent to an attorney 
claiming to represent a petitioner unless a written notice of 
representation is filed. No extensions of time shall be granted due to 
delays in submission of the notice of representation.
    (h) Consolidated petitions. At the discretion of the ruling 
official in individual cases, a petition may be filed by one petitioner 
on behalf of other petitioners, provided the petitions are based on 
similar underlying facts, and the petitioner who files the petition has 
written authority to do so on behalf of the other petitioners. This 
authority must be either expressed in documents giving the petitioner 
the authority to file petitions for remission, or reasonably implied 
from documents giving the petitioner express authority to file claims 
or lawsuits related to the course of conduct in question on behalf of 
these petitioners. An insurer or an administrator of an employee 
benefit plan, for example, which itself has standing to file a petition 
as a ``victim'' within the meaning of Sec.  9.2, may also file a 
petition on behalf of its insured or plan beneficiaries for any claims 
they may have based on co-payments made to the perpetrator of the 
offense underlying the forfeiture or the perpetrator of a ``related 
offense'' within the meaning of Sec.  9.2, if the authority to file 
claims or lawsuits is contained in the document or documents 
establishing the plan. Where such a petition is filed, any amounts 
granted as a remission

[[Page 56115]]

must be transferred to the other petitioners, not the party filing the 
petition; although, in his or her discretion, the ruling official may 
use the actual petitioner as an intermediary for transferring the 
amounts authorized as a remission to the other petitioners.

    Dated: August 23, 2012.
Eric H. Holder, Jr.,
Attorney General.
[FR Doc. 2012-21943 Filed 9-11-12; 8:45 am]
BILLING CODE 4410-09- 4410-02; 4410-FY; 4410-14; P