Asset Forfeiture Law: Challenges of Private Property in Mexico

Changes in Mexico’s Asset Forfeiture Law have taken a turn that may potentially clash with individual freedoms central to a democratic republic, Ignacio Morales, former Attorney General and Public Notary, said at the Mexico Infrastructure and Sustainability Summit 2019, held at Mexico City’s Hotel Marquis on Wednesday. “The direction legislators are taking with respect to this law leaves individuals exposed to the arbitrariness of the state.”

Morales, who teaches law at the Free School of Law and was Ambassador of Mexico to France, gave a brief overview of the history and original intentions of the juridical figure known in Mexico as the Asset Forfeiture Law. Born at the Palermo Convention with the intention of fighting organized crime, the law says that if a person is found guilty of a crime, her assets can be confiscated by the state with no compensation. However, only high-impact crimes, directly related to organized crime, such as money laundering, were susceptible to asset forfeiture.

Mexico passed a law of this kind for the first time in 2009, after modifying article 22 of the Constitution. This initial incarnation of the law followed closely its original spirit. Very few, clearly defined crimes were included. Nevertheless, in 2018, the law was again modified, this time including 190 felonies, such as fiscal evasion or using fake invoices. Morales remarked: “This ampliation is excessive and represents a latent danger to the integrity of Mexican persons, physical and juridical, and of persons doing business in Mexico.” For instance, not only the material perpetrator of a crime, but also incidental accomplices to it, willing or not, can be affected by the Asset Forfeiture Law. “If an apartment is used for a kidnapping by the tenant,” Morales said, “the landlord can lose the property at the hands of the state, because it can be judged that he was an accomplice.”

More worrying, the state can confiscate the property of the accused without having proven his or her culpability. If the state judges that it is in its best interest to sell the property in question, it can do so. This innovation originated in Colombia. But there, the attorney general must authorize the sale of an accused person’s property while the trial is ongoing. In Mexico, no such protection exists.

Morales recommended the law again be changed for the greater protection of individuals. However, while the situation remains as it is today, citizens can take measures to guard themselves against possible arbitrary state actions. Morales said the best course of action is to demonstrate good faith. To this end, individuals have to be highly meticulous and keep all their documents in order. In the case of landlords, Morales explained: “First there must be a document evidencing that the title of property is authentic. Second, proof that all initial taxes have been paid must be available. Third, proof that all yearly property taxes are in order must be available if the need arises.”