Forfeiture is a common practice wherein local police or government bodies seize property or money in connection with a civil violation.[1] Most Western countries have similar legislation to freeze and seize assets.[2] The practice has been criticized by legal scholars and civil rights advocates as cruel, unusually harsh, and prejudicial.[3] Just two days after the Russian invasion of Ukraine, on February 26, 2022, President Joe Biden posted on the social media platform X, formerly Twitter, “[t]his coming week, we will launch a multilateral Transatlantic task force to identify, hunt down, and freeze the assets of sanctioned Russian companies and oligarchs.”[4] Over the last year and a half, as the war continues to rage on, governments around the world have seized, frozen and sanctioned roughly $1.46 trillion in Russian assets.[5] Civil asset forfeiture, as the practice is employed today, is a gross violation of basic human rights and property rights principles. The seizure of assets, for United States citizens and foreign nationals alike, should only be justified during extreme circumstances. Extreme circumstances may include when the seizure is permitted under customary international law, when a nation is engaged in armed conflict, or when the seized property is substantially involved in criminal activity.
Asset Forfeiture as a Human Rights Violation
Civil forfeiture has roots that go as far back as the Bible, though the practice as it is known today evolved in Medieval England.[6] In the eighteenth and nineteenth centuries, citizens of the British Empire were legally required to surrender any object that caused the death of a king’s subject.[7] These forfeiture laws were a major source of revenue for the Crown.[8] Such forfeiture laws were also a major source of contention between the American colonies and the Crown, and contributed to the American Revolution.[9] American animosity towards forfeiture laws during the eighteenth century explains why the U.S. Constitution Article III explicitly bans forfeiture of estate.[10] Early uses of statutory forfeiture in the U.S. were limited to enforcing admiralty jurisdiction.[11] Nonetheless, the cases laid the legal foundation for civil forfeiture as we see it today; however, it remained largely dormant until the late twentieth century and the war on drugs.[12]
In principle, civil forfeiture may sound appealing: “[i]t enables authorities to confiscate cash or property obtained through illicit means, and, in many states, funnel the proceeds directly into the fight against crime.”[13] Property seizure, though, does not require an owner’s guilty sentence or even a charge before the assets may be claimed by law enforcement.[14] Civil forfeiture merely requires probable cause that an asset in one’s possession was involved in illicit activity, “regardless of its owner’s guilt or innocence.”[15] There is an important distinction between asset seizure and asset freezing. A freeze “destroys the current economic value of assets by criminalizing any attempt to transact with them or derive any benefits from them.”[16] However unlike a seizure, a freeze does not transfer property ownership.[17] There is a further distinction between the seizure of assets of a U.S. resident and that of a foreign national because the former is governed by domestic law while the latter is controlled by international law.[18]
It is no secret that asset forfeiture can be a powerful tool for police against people who cannot easily fight back.[19] But this is often when human rights violations can come into play. The Universal Declaration of Human Rights holds that “[e]veryone has the right to own property” and “[n]o one shall be arbitrarily deprived of his property.”[20] The idyllic civil forfeiture scheme has been strained by systemic racism and xenophobia embedded in the U.S. coupled with local police and prosecution departments seeking to bolster their meager budgets.[21] On a larger scale, the Attorney General of the United States utilizes civil forfeiture to meet President Biden’s demands to target Russian assets.[22] “Reports from other asset forfeiture cases in the media and in lawsuits indicate that police do not seize assets equally. Instead, they target those persons they associate with criminal behavior and drug trafficking.”[23] Low-income black and brown communities have felt the disparate treatment of the racial profiling used by police in civil forfeiture cases.[24] The tiny town of Tenaha, Texas has become “legendary” for its civil forfeiture abuse and racial profiling.[25] The Tenaha Police Department has implemented a stop and search program, targeting Black and Latinx motorists for minor traffic violations in pursuit of evidence of drug trafficking.[26] When the police find no evidence of drug activity, the stops instead lead to seizure of the motorists’ cash, jewelry, electronics, or even their vehicles or children.[27] In the southern U.S., “cash-for-freedom” waivers have also become the norm of asset forfeiture: motorists may either surrender permanently their property immediately on the spot to the city or face serious consequences.[28] Quite simply, the current practice of asset forfeiture has led to an imbalance between human rights and civil protections.[29]
The right to retain property anywhere is a basic human right.[30] Civil forfeiture directly interferes with citizens’ right to retain property when they are often never even charged with a crime.[31] Recently, Russian foreign nationals have been targeted in civil forfeiture schemes because their home country is engaged in war.[32] Asset forfeiture of both domestic and international residents is unduly coercive, prejudicial, and convoluted to force property owners to surrender their property without putting up a fight. In addition to procedural weaknesses, civil forfeiture demonstrates a pattern of “severe and unjustified disparities in the rates of stops, searches and arrests” of minorities and people of color.[33] Despite staggering statistics documenting the bias and prejudice of civil forfeiture practices, the U.S. Supreme Court has continued to legitimize the practice, refusing to shift the equal protection standard.[34] In the U.S., “[p]ublic opinion reflects a high disapproval” for civil asset forfeiture because it overwhelmingly does more harm than good.[35] More public awareness must be raised on the issue of seizing assets of foreign nationals.
Russian Asset Seizure
On February 24, 2022, Russian forces invaded Ukraine.[36] In response to this invasion, the U.S. ordered swift and significant sanctions against Russia, to directly target the country’s core financial system.[37] President Biden also tasked his Administration with freezing all sanctioned Russian assets.[38] Around the world, many other countries followed suit and either began to freeze or seize Russia assets and foreign investments, including Australia, Canada, France, Germany, Italy, Japan, the United Kingdom and the European Commission.[39] In addition to the $324 billion assets frozen, “Western allies have sanctioned more than 1,200 Russian individuals, more than 120 entities, and 19 banks since Russia invaded Ukraine. That equals assets of roughly…$1.14 trillion.”[40] The seizure and freeze of Russian assets may be considered lawful on a case-by-case determination. Several factors play a part in determining whether a foreign national’s assets were lawfully seized or frozen, including nexus with illegal activity and whether a country is involved in a war or invasion.[41] The seizure of Russian assets must be more closely scrutinized under both domestic and international law.
Many wealthy Russians and Russian-owned companies are involved in funding the war effort; they are the same parties that have invested their money and assets abroad.[42] As a result of personal ties with Russian President Vladimir Putin, some of Russia’s wealthiest citizens are profiting from their contributions to the war in Ukraine.[43] In order to seize or freeze Russian property, countries must make a formal claim in a federal court that the property was substantially involved in illegal activity.[44] For Russians, the claim is often one of money laundering or violating international sanctions.[45] A recent case indicted a Russian national for his involvement in international money laundering in promotion of sanctions violations through properties owned by a Russian oligarch.[46] Several similar cases have been filed in U.S. federal district courts as the Biden Administration seeks to help pay for the reconstruction of Ukraine.[47]
In order to provide for the rebuilding of Ukraine, the allied governments agree that Russia should “be held responsible for footing the reconstruction bill.”[48] Reconstruction of Ukraine is currently estimated to cost $411 billion and growing as the war continues, also taking into account “its intensity, and its geographic spread.”[49] Ukraine faces necessary reconstruction throughout the country, including housing and health services, education, infrastructure, tourism, agriculture, commerce, and civil protection.[50] Currently, the countries participating in Russian asset seizure are the same countries whose citizens have been “providing Ukraine with large military, financial, and humanitarian aid packages since the invasion began.”[51] Countries have begun this initiative by transferring forfeited Russian assets to Ukraine as a means of remediation.[52] Ukraine has also requested reparations in its ongoing case before the International Court of Justice.[53]
Russian assets may be protected by international legal standards, including foreign sovereign immunity and unlawful expropriation.[54] Sovereign immunity guarantees targeted exceptions and legal protections from sanctions and other judgments; sovereign immunity does not apply to private property. [55] Thus, the foreign assets and investments of Russian oligarchs may be protected if the property is financed by the Russian state.[56] Conversely, Russian oligarchs may argue that their funding of the war was an imperative national interest and therefore their private property and assets should remain immune from seizure. International law also protects foreign private property from expropriation by requiring that “expropriating states abide by certain standards of treatment and provide fair compensation to the foreign property owner.”[57] Russia has maintained that it will consider any seizure of its assets for the benefit of Ukraine to be an “outright theft” requiring an “appropriate response.”[58]
Justifications for Asset Forfeiture
Countries participating in Russian asset seizure are supported by both international law and each nation’s domestic laws. Heads of state may enact countermeasures in response to times of international crises.[59] Countermeasures are “temporary coercive acts that are designed to compel other states to comply with their international obligations.”[60] The act of freezing Russian assets may be a temporary countermeasure, but permanently seizing assets and redistributing them would violate customary international law.[61] Customary international law also sets an expectation that the invading nation, in this case Russia, has a duty to compensate the country injured by its aggression, Ukraine.[62] Several other principles of international law hold that when nations unlawfully attack, destroy and steal the property of another, other nations can “limit their rights to demand that their own usual international property rights are entitled to respect.”[63] In other words, because Russia unlawfully invaded Ukraine and has since created innumerable property damage, the Western allies have authority under international law to limit Russian property rights abroad. There was another precedent established after the World Wars, which set a standard for the victors of war to demand financial reparations from their vanquished aggressors.[64] However, the war in Ukraine is different because Ukraine would be in “no position to compel Russia to provide restitution for the devastation it has wrought” throughout the country.[65]
In the U.S., asset forfeiture may be justified during times of war. In 2001, Congress amended presidential power to permit seizures when the U.S. is in a state of armed conflict.[66] When the country is not engaged in armed conflict, presidential power is limited to blocking or freezing economic assets.[67] The definition of “armed conflict” is yet to be determined, though it may now be essential. It is undisputed that Russia is in a state of armed conflict with Ukraine and causing irreputable and indisputable devastation.[68] Does aligning their interests with Ukraine establish that Ukraine’s allies are now in a state of armed conflict with Russia? Does supplying weapons, security assistance, finances, and humanitarian aid equate the loss of life of Ukrainian soldiers?[69] Because Ukraine’s allies are removed from the warfront, this would suggest that the allies do not meet the qualifications of being in a state of armed conflict with Russia. Under U.S. presidential forfeiture power, the U.S. is unlawfully seizing Russian assets.[70]
When property is involved in illegal or criminal activity, governments have the authority under both domestic law and customary international law to confiscate it.[71] In order to be seized, the assets must have a substantial nexus to a certain criminal activity.[72] Funding a war is not in and of itself an unlawful activity and may be an insufficient justification for a government to seize assets.[73] The seizing country must look at alternative options to justify the seizure including: the asset or money was obtained illegally, foreign nationals are violating international sanctions, or another crime was committed in relation to the asset, such as fraud, embezzlement, or laundering.[74] The prosecuting government must file a formal complaint in a domestic federal court justifying the basis of the deprivation of an owner’s property, which can become a lengthy process before seizure is officially permitted.[75]
Conclusion
The current practice of civil forfeiture has many deficiencies that violate provisions of the Universal Declaration of Human Rights and customary international law. Citizens have a right to retain their property interests without fear of seizure based on nothing more than prejudice and bias. While asset seizure can be a powerful tool during the time of war or serious criminal convictions, there is significant unclarity and inconsistency in U.S. policy, practice, and definitions. Asset seizure may be justified if and only if it is during extreme circumstances: when it is permitted under customary international law, a nation is engaged in armed conflict, or the property is substantially involved in criminal activity. What is clear is that current international law, U.S. case law, and statutes relating to civil asset forfeiture against domestic citizens and foreign nationals has many deficiencies.
[1] Sarah Stillman, Taken, New Yorker, Aug. 12, 2013, at 4.
[2] Elisabeth Braw, Freeze – Don’t Seize – Russian Assets , Foreign Policy (Jan. 13, 2023, 9:05 AM), https://foreignpolicy.com/2023/01/13/putin-sanctions-oligarchs-freeze-seize-assets/ [https://perma.cc/7U8J-6LLV].
[3] Stillman, supra note 1 at 4.
[4] The White House (@White House), Twitter (Feb. 26, 2022, 5:57 PM), https://twitter.com/whitehouse/status/1497707469350526986.
[5] Jonathan Masters, How Frozen Russian Assets Could Pay for Rebuilding in Ukraine, Council on Foreign Relations (Jul. 24, 2023, 3:42 PM), https://www.cfr.org/in-brief/how-frozen-russian-assets-could-pay-rebuilding-ukraine [https://perma.cc/6J8F-MKUX].
[6] See Exodus 21:28 (“When an ox gores a man or a woman to death, the ox shall be stoned, and its flesh shall not be eaten; but the owner of the ox shall not be liable.”); see Michael van den Berg, Comment: Proposing a Transactional Approach to Civil Forfeiture Reform, 163 U. Pa. L. Rev. 867, 873 (2015) for a discussion on “deodand,” the medieval practice of civil forfeiture.
[7] van den Berg, id.
[8] Id.
[9] Id. at 874.
[10] See U.S. Const. art. III, § 3, cl. 2 (“No Attainder of Treason shall work Corruption of Blood, or Forfeiture except during the Life of the Person attainted.”).
[11] See Marian R. Williams et al., Policing for Profit: The Abuse of Civil Asset Forfeiture, Inst. for Justice, 10 (2010) (“The Supreme Court held that civil forfeiture was closely tied to the practical necessities of enforcing admiralty, piracy and customs laws.”).
[12] See U.S. v. Two Tracts of Real Property with Bldgs., 998 F.2d 204, 213 (4th Cir. 1993) (“One of the most potent weapons in the government’s war on drugs is its ability to obtain the civil forfeiture of property that aids violations of the drug laws.”).
[13] Stillman, supra note 1, at 4.
[14] Id.
[15] Id.
[16] Paul Stephan, Giving Russian Assets to Ukraine—Freezing Is Not Seizing, Lawfare (Apr. 26, 2022, 10:48 AM), https://www.lawfaremedia.org/article/giving-russian-assets-ukraine-freezing-not-seizing [https://perma.cc/WWH4-RTMX].
[17] Id.
[18] Id.
[19] Stillman, supra note 1 at 31.
[20] U.N. Universal Declaration of Human Rights (UDHR) art. 17.
[21] Stillman, supra note 1 at 31; see also Louis S. Rulli, Article: Prosecuting Civil Forfeiture Contingency Fees: Looking for Profit in All the Wrong Places, 72 Ala. L. Rev. 531 (2021); Vanita Saleema Snow, Article: From the Dark Tower: Unbridled Civil Asset Forfeiture, 10 Drexel L. Rev. 69, 91 (2017).
[22] Press Release, U.S. Treasury Announces Unprecedented & Expansive Sanctions Against Russia, Imposing Swift and Severe Economic Costs (Feb. 24, 2022), https://home.treasury.gov/news/press-releases/jy0608.
[23] Chloe Cockburn, Easy Money: Civil Asset Forfeiture Abuse by Police, ACLU (Feb. 3, 2010), https://www.aclu.org/news/criminal-law-reform/easy-money-civil-asset-forfeiture-abuse-police [https://perma.cc/4HDL-VQCX].
[24] Id.
[25] Rulli, supra note 21, at 538; see also Stillman, supra note 1, at 8.
[26] Rulli, supra note 21, at 539; see also Stillman, supra note 1, at 16.
[27] Rulli, supra note 21; See also Stillman, supra note 1, at 3.
[28] Id.; see also Rulli, supra note 21, at 539-40 (“If cash is found during [a traffic stop], police may present motorists with a cash-for-freedom waiver: surrender permanently your property immediately on the spot or face serious consequences. Under such coercive conditions, many motorists sign waivers to their property because they see no other option.”).
[29] Congress enacted CAFRA in 2000 as an effort to reform some of the most troubling aspects of forfeiture. CAFRA increased the burden of proof, now requiring the government to prove by a preponderance of the evidence that the property is subject to forfeiture. However, abusive and prejudicial forfeiture practices remain prevalent. Pub. L. No. 106-185, 114 Stat. 202 (2000).
[30] UDHR art. 17 supra note 20.
[31] Mat Tromme, Waging War Against Corruption in Developing Countries: How Asset Recovery Can Be Compliant with the Rule of Law, 29 Duke J. Comp. & Int’l L. 165, 187 (2019).
[32] Treasury Press Release, supra note 22.
[33] Press Release, Civil Forfeiture Complaint Filed Against Six Luxury Real Estate Properties Involved In Sanctions Evasion And Money Laundering (Feb. 24, 2023), https://www.justice.gov/usao-sdny/pr/civil-forfeiture-complaint-filed-against-six-luxury-real-estate-properties-involved.
[34] Saleema Snow, supra note 21, at 123.
[35] Id. at 93.
[36] Press Release, Remarks by President Biden on Russia’s Unprovoked and Unjustified Attack on Ukraine (Feb. 24, 2022), https://www.whitehouse.gov/briefing-room/speeches-remarks/2022/02/24/remarks-by-president-biden-on-russias-unprovoked-and-unjustified-attack-on-ukraine/.
[37] Treasury Press Release, supra note 22.
[38] White House, supra note 4.
[39] Masters, supra note 5.
[40] Braw, supra note 2 (data current as of January 2023).
[41] Proposals to Seize Russian Assets to Rebuild Ukraine: Session 22 of the Congressional Study Group, Brookings (Dec. 29, 2022), https://www.brookings.edu/articles/proposals-to-seize-russian-assets-to-rebuild-ukraine/ [https://perma.cc/ZU2Q-XEKG].
[42] Emmanuel Grynszpan, Russian Oligarchs Get Richer From the War in Ukraine, Le Monde (Aug. 3, 2023), https://www.lemonde.fr/en/international/article/2023/08/03/russian-oligarchs-get-richer-from-the-war-in-ukraine_6077914_4.html [https://perma.cc/7PJP-5U98] (“Almost half of Russia’s wealthiest people are war profiteers…at least 81 of the names on the list of Russia’s 200 richest people (according to the 2021 ranking by Forbes) are clearly involved in Russia’s invasion of Ukraine. The companies of which they are beneficiaries supply components, equipment or fuel either to the Russian armed forces or to arms factories.”).
[43] Id.
[44] Press Release, supra note 33; see also, Braw, supra note 2 (“[A]s stomach churning as it is…Western leaders still need to demonstrate that [the Russian] assets are linked to crime…They must avoid arbitrarily tak[ing] what’s not theirs.”).
[45] Press Release, supra note 33; see also Verified Civil Complaint for Forfeiture, U.S. v. All That Lot or Parcel of Land Located at 19 Duck Pond Lane, Southampton, New York 11968, Together with its Buildings, Appurtenances, Improvements, Fixtures, Attachments, and Easements and others, 23 Civ. __ (2023).
[46] Id.
[47] Id.
[48] Masters, supra note 5.
[49] Id.
[50] Id.
[51] Id.
[52] Sergei Titov, How Konstantin Malofeyev, Russia’s ‘Orthodox Oligarch,’ Finances His Support Of Moscow’s War In Ukraine, RFERL (Jun. 24, 2023), https://www.rferl.org/a/malofeyev-russia-oligarch-finances-war-ukraine/32474096.html [https://perma.cc/SUH8-46D6].
[53] Ukraine v. Russian Federation: 32 States intervening, Allegations of Genocide under the Convention on the Prevention and Punishment of the Crime of Genocide, ICJ No. 182 (Feb. 2022).
[54] Artem Ripenko, Should Third Party States Follow Ukraine’s Lead and Confiscate Russian State Assets, Voelkerrechtsblog (Jun. 19, 2023), https://voelkerrechtsblog.org/should-third-states-follow-ukraines-lead-and-confiscate-russian-state-assets/ [https://perma.cc/7TNM-BGLF].
[55] Scott R. Anderson and Chimène Keitner, The Legal Challenges Presented by Seizing Frozen Russian Assets, Lawfare (May 26, 2022, 3:09 PM), https://www.lawfaremedia.org/article/legal-challenges-presented-seizing-frozen-russian-assets [https://perma.cc/PX65-GLYZ].
[56] Ripenko, supra note 54.
[57] Anderson and Keitner, supra note 55.
[58] Brian Evans, The G7 and EU are Discussing Seizures of Russian Central Bank Assets for Ukraine Aid, but the Kremlin Calls it Theft, Business Insider (May 17, 2022, 9:47 AM), https://markets.businessinsider.com/news/currencies/russian-central-bank-asset-seizure-g7-eu-ukraine-aid-2022-5 [https://perma.cc/X3QM-RAL6].
[59] Masters, supra note 5.
[60] Evan Criddle, Rebuilding Ukraine Will Be Costly. Here’s How to Make Putin Pay., Politico (Mar. 30, 2022, 12:11 PM), https://www.politico.com/news/magazine/2022/03/30/rebuilding-ukraine-make-putin-pay-00021649 [https://perma.cc/M7UB-L6LJ].
[61] Id.
[62] Id.; see also U.N. Responsibility of States for Internationally Wrongful Acts (ARSIWA) art. 36 (2001).
[63] Philip Zelikow, A Legal Approach to the Transfer of Russian Assets to Rebuild Ukraine, Lawfare (May 12, 2022, 10:21 AM), https://www.lawfaremedia.org/article/legal-approach-transfer-russian-assets-rebuild-ukraine [https://perma.cc/WNG3-V2QB]; see also ARSIWA arts. 36, 40, 41, 42, 48, 43, 50, 52.
[64] Criddle, supra note 60.
[65] Id.
[66] Codified in the International Emergency Economic Powers Act (IEEPA) (50 U.S.C. § 1701).
[67] Proposals to Seize Russian Assets, supra note 41.
[68] See Matthew Mpoke Bigg, How Russia’s war in Ukraine has unfolded, month by month., The New York Times (Feb. 24, 2023), https://www.nytimes.com/article/ukraine-russia-war-timeline.html [https://perma.cc/G9TS-H5ZG].
[69] Jonathan Masters and Will Merrow, How Much Aid Has the U.S. Sent Ukraine? Here Are Six Charts., Council on Foreign Relations (Sept. 21, 2023, 9:00 AM), https://www.cfr.org/article/how-much-aid-has-us-sent-ukraine-here-are-six-charts [https://perma.cc/4BD9-868N].
[70] Criddle, supra note 60.
[71] Stillman, supra note 1.
[72] Proposals to Seize Russian Assets, supra note 41.
[73] Oona Hathway and Scott Shapiro, Supplying Arms to Ukraine is Not an Act of War, Lawfare (Mar. 12, 2022, 2:00 PM), https://www.lawfaremedia.org/article/supplying-arms-ukraine-not-act-war [https://perma.cc/8LPT-A7CP].
[74] Press Release, supra note 33; Exec. Order No. 14024, 86 FR 20249, 20249-20252 (Apr. 19, 2021); Stefan D. Cassella, Yachts and Airplanes: What Procedures and Legal Theories Are Being Used to Forfeit Russian Assets in the United States?, Eurcrim vol. 4/2022, 273, 276 (2022).
[75] Cassella, id. at 275.
