Monday, 25 September 2017

Civil Forfeiture: A Preliminary Comment

Civil Forfeiture: A Preliminary Comment

Jersey is looking to introduce a new Civil Forfeiture law. This exists in other jurisdictions such as the USA and Australia, and has property, by legal process, deemed “tainted” where

Civil forfeiture laws allow the government to take cash, cars, homes and  other property "reasonably suspected" of being involved in criminal activity. Unlike  criminal forfeiture, with civil forfeiture, the property owner doesn’t have  to be charged with, let alone convicted of, a crime to permanently lose their property.

“Tainted property”, is defined in the proposed law as property

which is or, by the Attorney General or any officer on whom powers are conferred by this Law, is reasonably suspected to be or have been –
(a) used in, or intended to be used in, unlawful conduct; or
(b) obtained in the course of, from the proceeds of, or in connection with, unlawful conduct.

Authority to seize property

Sandra Thompson explains the kind of problems arising with this law which have happened in the USA since it was introduced:

“A forfeiture action can be premised on the use of property such as real estate or vehicles to ‘facilitate’ a drug offense. The authority to seize property that facilitates a drug offense means that an owner can lose property that was purchased with legitimately earned funds simply because it may have been used somehow in the course of an offense. The use of a car to transport drugs is the paradigmatic example, but the power to forfeit extends beyond that. The use of a house purchased with legitimately earned funds as a meeting place to discuss a drug deal that would take place at another time and place could also subject the house to forfeiture.”

It should also be noted that, as case law regarding civil forfeiture in another jurisdictions shows, that the designation of the action as “civil” also meant that the burden of proof need not be the "beyond a reasonable doubt" standard applied in criminal cases.


The USA reformed its law to take account of some issues that have arisen. One is the case of “hardship”, for which the proposed Jersey Law lacks any provision.

As Thompson notes the revision in the USA gives a more teeth to the notion of “hardship”, where another party is impacted by the forfeiture of “tainted property”

“The new law requires the immediate release of seized property if the seizure would cause substantial hardship. A claimant may prove substantial hardship by demonstrating, for example, that continued seizure of the property would prevent the functioning of a business, prevent an individual from working, or leave an individual homeless. This provision protects the government’s interest in the property by requiring that the claimant have sufficient ties to the community to assure that the property will be available at the time of trial and that the likely hardship from the continued possession by the government outweighs the risk that the property will be destroyed, damaged, or lost if it is returned to the claimant pending the outcome of the forfeiture action. The provision does not apply to illicit proceeds, however.”

So it is designed to safeguard use of a family home, where there may be a wife and children, rather than cash suspected of being proceeds of crime.

There is no such safeguard in the proposed Jersey legislation.

Disposal of Tainted Property

The Jersey law says that:

Property disposed of pursuant to an enactment shall cease to be tainted property if –
(a) the enactment is one which is prescribed for the purposes of this paragraph; and
(b) the property is of a class which is so prescribed.
(4) If –
(a) a person disposes of tainted property; and
(b) another person, who obtains the property on the disposal, does so –
(i) in good faith,
(ii) for value, and
(iii) without notice that it is tainted property,
the property shall cease to be tainted property.

Jersey law has no provision for a gift from one person to another, but only for value

In the USA, this has been amended to allow a provision in gift, but with caveats.The recipient of a gift can claim to be an “innocent owner”, in that they received the property as a gift in good faith and without notice that it is tainted property.

In the USA, as Thomson notes:

“In 92 Buena Vista Avenue, the Court held that the innocent owner defense could be asserted by an owner who had obtained her interest in the property by gift”.

But because this could potentially open  up a loophole, the law was tightened:

“With respect to owners who acquire their interests in the property after the commission
of the offense giving rise to forfeiture – “post-illegal act owners” - the statute now limits the applicability of the “innocent owner” defense to bona fide purchasers or sellers for value.”

This means that the innocent owner defence can only apply for a gift if given before the offense giving rise to forfeiture, and prevents the system being abused. After the offence has taken place, a transaction of value needs to take place.

The Jersey law has no provision for a gift and an innocent owner defence, and is thereby much less fair than the USA legislation.

Joint Ownership

The Jersey law states that: “If a person’s tainted property is mixed with other property (whether his or her property or another’s), the portion of the mixed property which is attributable to the tainted property is tainted property”

In the case of property in joint ownership, the standard procedure in the USA and Australia was to dispose of the asset, and provide either by statute or court discretion, monetary compensation.

This has also been improved to provide better options. Thomson comments that:

“Now a court can choose among three options: to order a severance of the property, a transfer of the property to the government with a provision that the government compensate the innocent owner to the extent of her ownership interest, or that the innocent owner retain the property subject to a lien in favor of the government to the extent of the forfeitable interest in the property.”

The reason for this was that the only line to be taken – to dispose of the property – was deemed to be unjust to innocent parties:

“In some cases, state laws required that the government seize property and compensate the innocent owner. In cases involving innocent wives who then received one-half of the value of the property in compensation, they were typically left in a worse position to provide shelter for themselves and their children than if the court had allowed her to use the property subject to a lien by the government.”

No such provisions exist in the Jersey law as statutory options, which is another case of the Jersey law being deficient.

In conclusion, the Jersey law needs substantial revision to enable it to address some of the issues which have arisen in other jurisdictions, and which have led to improvements in the laws.

Congressional Reform of Civil Forfeiture: Punishing Criminals Yet Protecting Property by Sandra Guerra Thompson, Federal Sentencing Reporter, Vol. 14, No. 2, Forfeiture: Recent Reform and Future Outlook 

1 comment:

James said...

If enactment of the same-sex marriage law can be deferred because of technical problems (not the least of them the fact that the current personal taxation system is not remotely fit for purpose), can not the promoters of the forfeiture law be told to wait their turn too? Much of the question of the division of assets lies in the failure of Jersey's tax office to allow people to be properly individually taxed.