Legal considerations in Mexico: Asset Seizure -Part I

On August 9,2019, a Decree was issued in the Official Gazette of the Nation by which the first national asset seizure law is issued for the entire country (hereafter “LED” for its acronym in Spanish).

?

This law is regulated by article 22 of the Political Constitution of the United Mexican States, which regulates the general rules of the procedure that must follow the seizure of assets. As of today, most cases of assets seizure are lost by the state, therefore, this law emerges as a measure to have a real impact on crime finances.

?

Article 3 of the law defines the assets seizure as “the loss of the rights that a person has in relation to tangible or intangible assets, declared by sentence of the judicial authority, without consideration, or compensation for its owner or for those who hold or behave as such, or for those who, under any circumstances, own or hold the aforementioned Assets ”.[1]

?

The objective of the asset seizure is to have a real impact on the patrimony and finances of organized crime and corruption and will proceed over all assets of a monetary nature whose legitimate origin cannot be proven or that are the result or product of illicit acts. Some cases provided by this law are:

?

• Assets that come from illegal acts.
• Assets of legal origin used to hide goods of illicit origin.
• Assets that the holder does not prove their legal origin.
• Assets of lawful origin whose value is equivalent to any of the assets described in the previous sections, when their location, identification, seizure, assurance or material apprehension is not possible.
• Assets used for the commission of illegal acts by a third party, if the owner had knowledge of it and did not notify the authority or did anything to prevent it.
• Assets that constitute income, products, yields, fruits etc. of an illicit act.

?

Among the illegal acts provided for in this law are (i) acts of corruption,(ii) theft of hydrocarbons, (iii) organized crime, ?(iv) kidnapping, (v) crimes against health, (vi) human trafficking, (vii) aiding and abetting, (viii) crimes committed by public servants,(ix) theft of vehicles, (x) money laundering and extortion.

The elements of the asset seizure action are: (a) the existence of an illicit act, (b) the existence of any property of illicit origin or destination, (c) the causal link of the preceding paragraphs, and (d) the knowledge that the owner has or should have regarding the destination of the good to the illicit act or that is the product of the wrongful act, all the elements must be complied with - except for those exceptions provided in the LED - for the domain extinction action to proceed.

?

In order to be able to exercise the asset seizure action, a jurisdictional process of a civil and nature will be carried out and there must be a definitive sentence that validates it. One of the main innovations of this procedure is that it will be oral and public, with characteristics very similar to the oral judgments of the criminal system.

?

The exercise of said action corresponds to the Public Ministry and it may be withdrawn at any time, with proven cause, before the dictation of the sentence.

[1] Tangible assets should be understood as those that can touch and occupy a space, such as a computer, a chair, etc.; while intangible assets, are those that have a value but no physical presence, for example a brand.