Forfeiture of terrorist assets under the USA Patriot Act of 2001

Law and Policy in International Business, Fall 2002 by Cassella, Stefan D

The USA PATRIOT Act1 contains a number of provisions that may be used by federal law enforcement authorities to seize and forfeit the assets of terrorist organizations, assets that are derived from terrorist acts, and assets that are intended to be used to commit terrorist acts in the future. Some of the new provisions are specifically intended to be used in, and are limited to, the terrorism context. Others apply more generally, but will undoubtedly be used in terrorism cases.

I. 18 U.S.C. [sec] 981(A)(1)(G)

Title 18, section 981 of the United States Code is the general-purpose civil forfeiture statute applicable to most federal crimes. Among other things, it authorizes the forfeiture of property involved in money laundering cases,2 property derived from or used to commit certain foreign crimes,3 and the proceeds of any offense designated as a "specified unlawful activity."4

Section 806 of the Patriot Act added a new provision to [sec] 981 that is an obvious response to September 11. Section 981(a)(1)(G) authorizes forfeiture of all assets of anyone engaged in terrorism, any property affording any person a "source of influence" over a terrorist organization, and any property derived from or used to commit a terrorist act.

This language is extraordinarily broad. Unlike the money laundering statute, which authorizes the forfeiture only of property "involved" in the money laundering offense,5 or the drug statute, which authorizes forfeiture only of property derived from or used to commit the drug offense,6 [sec] 981(a)(1)(G) does not require any nexus between the property and any terrorism offense. To the contrary, once the Government establishes that a person, entity, or organization is engaged in terrorism against the United States, its citizens or residents, or their property, the Government can seize and ultimately mandate forfeiture of all assets, foreign or domestic, of the terrorist entity, whether those assets are connected to terrorism or not.

The only parallel in federal law is the Racketeer Influenced and Corrupt Organizations (RICO) statute, which permits the forfeiture of all interests a person has in a RICO enterprise, or any property affording that person a source of influence over the enterprise, whether or not the forfeited property was tainted in any way by the racketeering activity.7 In fact, the "source of influence" language that appears in the RICO statute is repeated in [sec] 981(a)(1)(G). Enactment of [sec] 981(a)(1)(G) was necessary because the law previously had no forfeiture provisions tailored to terrorism.

A. Civil Versus Criminal Forfeiture

Section 981(a)(1)(G) appears in the general purpose civil forfeiture statute, but it is really both a civil and criminal forfeiture provision. This is because federal law now provides that any civil forfeiture may also be classified as a criminal forfeiture.8 Thus, if the United States apprehends and prosecutes a terrorist, the Government can seek forfeiture of all of his assets in the criminal case under the new statute, provided that the act giving rise to the forfeiture occurred after October 21, 2001, when the new law took effect. Nonetheless, the true utility of [sec] 981(a)(1)(G) is likely to be in the civil forfeiture context, because in civil forfeiture cases, the Government can proceed against the assets even if it does not apprehend the defendant because he is dead or because he remains a fugitive from justice.

B. Procedure for Civil Forfeiture

In most respects, a forfeiture under [sec] 981(a)(1)(G) will work just like any other civil forfeiture action under federal law. The Government can seize property based on probable cause. Generally, the seizure must be pursuant to a warrant, but warrantless seizures are authorized under certain circumstances.9 The seizure of the property is, however, only the beginning of the process. Seized property may be under Government control, but it still belongs to the property owner.10 To convert a seizure into a forfeiture-that is, to take title to the property permanently away from the property owner and transfer it to the Government-the Government must commence a formal forfeiture action.

The provisions of the Civil Asset Forfeiture Act of 2001 (CAFRA) set forth the procedure for converting a seizure into a forfeiture.11 In short, the Government has sixty days from the date of the seizure to send notice of the forfeiture action to all interested parties.12 If no one files a claim challenging the forfeiture within thirty days,13 the Government can declare the property forfeited by default.14 If someone does challenge the forfeiture, however, the Government has ninety days to return the property or to commence either a civil or criminal forfeiture action in federal court.15

All of that is standard civil forfeiture law. It would work the same way in a terrorism case as in any other case. In other words, if the United States seizes a terrorist's assets under [sec] 981(a)(1)(G), the Government could be in federal court, trying the case to a jury, in less than six months. The only concession Congress has made to the unique nature of terrorism cases concerns the procedure at trial. Under section 316 of the Patriot Act, if the case goes to trial under [sec] 981(a)(1)(G), and the property involves the assets of "suspected international terrorists," the normal burden of proof is reversed: once the Government makes its initial showing of probable cause, the claimant has the burden of proving, by a preponderance of the evidence, that his property is not subject to confiscation.16 In almost all other forfeiture cases, of course, the Government has the burden of proving the forfeitability of the property.17 Moreover, in the forfeiture trial, hearsay is admissible if the evidence is reliable and compliance with the normal Rules of Evidence might "jeopardize the national security interests of the United States."18