HSE University Anti-Corruption Portal
Mexico Adopts an Asset Forfeiture Law

The law provides for the possibility to seize proceeds of crime.

Specifically, the new law adds corruption to the catalogue of crimes that may be subject to such liability as forfeiture of property, which means that the law enforcement agencies may now seize the proceeds of corruption of natural and legal persons. At the same time the law enforcement officials are granted the right to seize the income or other benefits derived from the proceeds of corruption or other crime unless their lawful origin is demonstrated.

The enacted law is also retroactive: its provisions cover all corruption offences committed before it entered into force. Moreover, according to the law there is no statute of limitations for the forfeiture of assets determined to have illegal origins. 

The law also provides for a new forfeiture mechanism: the illegal assets will be seized in the framework of civil proceedings, therefore the possibility to apply this measure of liability is independent of criminal conviction.

A Special Forfeiture Unit of the Mexican General Prosecutor’s Office, launched in late 2019, will investigate and bring the asset forfeiture cases. The lawsuits will be subsequently considered by specialized courts that are to be shortly established in the country. 

If a forfeiture action is upheld, a defendant’s title to assets is extinguished in favor of the government. Any party to the case may subsequently appeal against the decision of the court. The court may also decide that the assets should be disposed of, which provides for the possibility to sell them according to a regulation, put them at the disposal of a public entity or destroy, in the absence of other options. It should be highlighted that the provisions of the law have come under considerable public criticism insofar as they violate the right to property and fundamental principles such as the presumption of innocence.

As mentioned above, the new law provides for the decision on forfeiture to be adopted and implemented within the framework of civil proceedings even in the absence of criminal conviction. According to article 16, the assumption that the assets are obtained illegally will suffice for the decision on their forfeiture to be taken, meanwhile such an assumption may be based, in particular, on “any legal information containing useful data or evidence necessary for initiating the action of forfeiture of property”, which includes, in fact, any rumours, media reports, etc.

In this regard, the last paragraph of the article was criticised as well: it provides for the possibility for the persons who made a notable contribution to or effectively facilitated the obtaining of the evidence necessary for forfeiture of property to receive a reward of up to 5 percent of the value of the property disposed of. The provisions of this kind seem to pose additional risks of unfounded accusations.

The government may seize the assets and put them on sale six months prior to the initiation of criminal proceedings. In this case, if the property seized from an alleged criminal, for instance, an apartment, is disposed of, but in the subsequent criminal proceedings the accused is proven innocent, he/she will not be able to get his real property back: the government will only have to pay him damages according to the prior cost estimate of the property (which value is likely to be underestimated so as to shorten the terms of its sale).

Pursuant to a court decision the assets allegedly acquired from illegal activities may be seized four months prior to the proceedings for their whole duration. Taking into consideration the fact that the trail may be protracted, such an approach seems to infringe the rights of the persons whose guilt has not been proven yet but who are simultaneously deprived of the right to make use of their assets for a long time. 

Furthermore, the law provides for the possible termination of ownership in relation to the assets that might have been a means of crime but do not belong directly to the accused. Notably, no catalogue of such assets has been compiled. As a result, it is likely that a decision on forfeiture of the property of a criminal may cause the deprivation of the right to it of a third party titleholder who is not a party to corruption, for instance, in a situation when a corrupt individual rents an apartment from an honest citizen and the latter can be deprived of his property.

Thus, the current version of the law may constitute a means of repression in the hands of the government applied against not only the criminals but also the honest citizens.

*The amendments introduced by the Asset Forfeiture Law are aimed at aligning Mexico’s legal framework with the provisions of the UN Convention against Transnational Organized Crime, the UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances and the UN Convention against Corruption.

Asset recovery

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