On August 9th, 2019, a decree (the "Decree") where the new Asset Forfeiture National Law (the "Law") was published in the Federal Official Gazette (DOF, by its acronym in Spanish). The Decree also amends the Criminal Procedures National Code, the Federal Law for the Administration and Disposal of Assets of the Public Sector, the Bankruptcy Law and the Law of the Federal Public Administration. The Law and the referred legal provisions are of public order and social interest, as well as applicable throughout the national territory.
The Law abrogates the Federal Law of Asset Forfeiture, as well as the laws related to the asset forfeiture of the states of the federation, and derogates all legal, regulatory and administrative provisions that oppose said Law.
The Law is a result of the international commitments assumed by Mexico, and in accordance with the United Nations Convention against Transnational Organized Crime, Corruption, Illicit Traffic of Narcotic Drugs and Psychotropic Substances and other international instruments that regulate confiscation, and which are binding for Mexico.
The asset forfeiture is the loss of rights suffered by a person (individuals or legal entities) over an asset, obtained illegally, in favor of the federal government or of any federative entity, declared by court ruling, without consideration or right to compensation to the owner, or for those who own or hold the property, whose legitimate origin could not be accredited.
The Law establishes the following facts or behaviors as susceptible of asset forfeiture:
- Activities considered organized crime, in terms of the 2nd article of the Federal Law against Organized Crime (including, between others, terrorism, arms stockpiling and trafficking, human traffics, organ traffic, and corruption of minor under the age of 18)
- Crimes related to hydrocarbons, petroleum and petrochemicals
- Crimes against health
- Trafficking in persons
- Crimes for acts of corruption
- Crimes committed by public officials (corruption, illicit exercise of public service, crimes against the administration of justice)
- Theft of vehicles
- Illegally sourced funds
The Law foresees two processes for the asset forfeiture action, one through a special civil basis and the other on a criminal basis.
The elements of the asset forfeiture action are: (i) the existence of an illicit act or conduct, (ii) the existence of a good from an illicit origin or destination, (iii) the causal link of the two previous elements, and (iv) the acknowledgment that the owner has or should have had of the good's destination to the illicit act or conduct, or that it is product of the illicit.
It is important to emphasize that the aforementioned knowledge, will not be considered fulfilled when it is proved that the holder was prevented from knowing it.
Depending on the circumstances of the case, and as long as it is accredited in accordance to the Law, the acquisition and destination of assets that would be subject to asset forfeiture are presumed in good faith.
The Law entered into force on August 10th, and the legislatures of the states shall harmonize their legislation in relation to the Law, within a period not exceeding 180 days from August 10th, 2019, and the Federal Judiciary will have a period that may not exceed February 10th, 2020, to create the competent courts in matters of domain extinction.
Originally published on the 29th August, 2019.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.