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Round table: Draft Law on Forfeiture to the State of Any Property Acquired by Criminal Activity
A round table discussion on the Draft Law on Forfeiture to the State of Any Property Acquired by Criminal Activity was held at the Center for the Study of Democracy on October 1, 2002. Ms. Karen Kramer, Resident Legal Advisor at the Embassy of the USA, provided opening remarks followed by a presentation by Ms. Susan Smith, Senior Trial Attorney at the Asset Forfeiture and Money Laundering Section in the Criminal Division of the U.S. Department of Justice.

Ms. Smith made a review of the history of asset forfeiture in the United States and its development, and described the rather complex legislation in this area. Below are excerpts of Ms. Smith's speech.

Forfeiture has been a part of the United States jurisprudence since the beginning of the Republic. The first forfeiture laws were passed by the Congress in 1789. Basically they were civil forfeiture laws based on violations of U.S. customs laws and tax laws.

Early in the 1970s when crime became huge problem for the United States, in particular drug trafficking, the Congress began looking at the use of forfeiture laws as a means of combating those types of offences. It was the first time when the US Government started using criminal forfeiture to attack all those criminal activities and their assets. In their experience the best way to effectively fight against criminal organizations, money laundering and drug trafficking, is to take the profit out of the crime, and the way to do that is to forfeit the assets of the criminals that they have derived from their crimes.

During the last 250 years three types of forfeiture actions were established in the USA: administrative procedure, civil forfeiture and criminal forfeiture.

The administrative forfeiture procedure is basically used for money laundering and drugs. It is a procedure without any kind of judicial oversight. The administrative forfeiture allows the law enforcement institutions when they have a probable cause to believe that a crime has occurred or that the asset was used in that crime to seize the asset by themselves without a judicial order. The judicial type forfeitures are both civil and criminal forfeiture. Civil forfeiture is essentially a case against the property itself with no concern about the guilt or innocence of its owner. The case is against the property and its relationship to the crime, which generated it. In 2000, the Department of Justice came to agreement with Congress to raise the burden of proof in a civil forfeiture case, so that now it is entirely the burden of the prosecution to prove the case against the property. In a criminal case the much higher standard of "beyond a reasonable doubt" should be met.

Within the United States the money that's been forfeited are distributed into two separate Asset Forfeiture Funds. The first one belongs to the Department of Justice and the other to the Department of Treasury. The money, which is put into those funds, is limited into what they can be used for. The primary objective is to manage the assets and to pay for their management, so that the value of the assets is maintained.

In the discussion that followed, representatives of the Bulgarian judiciary raised issues such as the procedures on the part of the innocent owners when they have to protect themselves against the state and the need for a legal definition of the term "criminal activity". In respect to the value of the assets that should be subject to prosecution, Ms. Smith said: "30 000 lv. might not be too high a profit, but why let anybody benefit from crime activity".

Ministry of Interior's experts, who took part in the elaboration of the law, asked for expert advice on certain problems that the law might cause.

Ms. Smith expressed her general approval of the concept of the draft law, stressing that it was a strong move forward toward the ability to seize and freeze assets, acquired by criminal activity.

Biographical data for Ms. Susan Smith
First round table on the Draft Law on Forfeiture to the State of Any Property Acquired by Criminal Activity

Available in Bulgarian
Draft Law on Forfeiture to the State of Any Property Acquired by Criminal Activity (PDF 196 kb)
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