A couple of minor but important corrections on the nature of due process:
Due process doesn't require a criminal conviction before assets can be seized, nor, in these cases, should it. What it does require is that there is a pre-existing legal basis for the seizure, and that the putative owner of the property receive notice and a meaningful opportunity to contest the seizure. (For clarity, in constitutional law the term "seize" includes temporary restrictions like freezing assets, but I'll use it in the same sense as Irene did in the OP, meaning a permanent transfer or confiscation.)
It's true that the current statutes require that DOJ prove that frozen assets are "tainted" as the "proceeds or instrumentalities" of crime before seizing them, and it's true that convicting somebody of that crime is quite sufficient. There are, however, other ways. Most of us have heard of "civil asset forfeiture" (CAF), where the government sues the property itself and seeks to seize it. Mostly we hear about CAF in the context of its widespread abuse (like when DOJ went after a family-owned motel in Tewksbury MA, simply because a lot of arrests happened there: https://www.dailysignal.com/2015/05/07/after-having-his-motel-seized-by-the-government-victim-of-civil-asset-forfeiture-reflects-on-his-fight/). CAF is widely abused, largely to the detriment of society's most vulnerable, and that's a problem. Kleptocapture, on the other hand, is pretty much the ideal case for its proper use.
When we're talking about trans-national criminals who aren't US citizens, who aren't in the US, and who are sanctioned six ways from Sunday and would never get a visa to come here, requiring a criminal conviction presents certain logistical problems. Now, it's true that the US manages to find jurisdiction over virtually every trans-national financial crime, but even with a US warrant and an INTERPOL red notice out for them, many of our kleptocrats are functionally immune to extradition. As long as they're in Russia and Putin is in charge there, nobody will lay a hand on them. If they get on his bad side, they're more likely to encounter Russia's infamously unsafe high-floor windows than they are to get extradited to the US. Since the US doesn't do trials in absentia, that could leave any case for asset forfeiture in permanent limbo -- an unacceptable result, particularly given that these folks chose to park assets in US jurisdiction and avail themselves of the many advantages that our financial system provides to its wealthy clients.
Enter civil asset forfeiture. The government must give notice to the owner of the assets -- presumably the custodial institutions have mailing addresses of-record, but publication will do in a pinch. That person must have the opportunity to oppose the forfeiture. Even if they can't come here in person, they need to be able to hire a lawyer and send that lawyer in to argue against the forfeiture if they want to do that. In the era of Zoom Court, they can even "attend" the hearings without personally crossing the border, though due process has not been interpreted to require this.
They're entitled to a fair trial, if they ask for one, before a neutral arbiter -- a US District Judge who hasn't pre-decided the case. They're entitled to an appeal, if one is customarily available in similar cases (it is). If they get those things, and the government can prove that the assets are linked to criminal activity, the judge can order the assets forfeited, and the USG as their owner can do as it wishes with them. All of this IS super important -- not just because the law requires it and the US holds itself out as a nation of laws, though also that. People make mistakes, including people who work for the government. Due process is how we make sure that we're seizing the right assets from the right people for the right reasons, and that those reasons are authorized by law. Otherwise we're just taking assets from people because government officials said they're bad, and at that point our ability to claim any moral high ground is GREATLY diminished.
(Subject matter authority: I'm a law school graduate and practiced criminal defense for 15 years, but never practiced in the area of international sanctions or any related trans-national context.)
Thanks, Andy. This is interesting stuff, and as I said, I'm hardly an attorney. From what I understand, there's a difference between freezes and forfeitures (maybe I'm using the wrong terminology?). We can't just use the frozen assets that exist in banks and other institutions that belong to sanctioned entities for reconstruction in Ukraine, for example. They need to be kept in the account and accrue interest. They can't just be given away or used to pay down the US debt. So it sounds like what we need is a legal authority if we want to permanently confiscate those funds and use them for reconstruction? In any case, OFAC has a certain standard by which it can sanction an individual or entity and require that assets be frozen.
Wouldn't it make sense that if assets were to be completely confiscated because of sanctions that some kind of due process would need to be granted? Deripaska has been trying to sue OFAC since he was sanctioned in 2018 to get sanctions lifted. He's failed so far. So until he's delisted, he can't access his assets in the United States. They're frozen, and that also means that the US government can't touch those assets either. I would think it would work differently with sanctioned individuals, but I'm not a lawyer either.
The 'logical' way would be have evidence of a crime, arrest/try individuals (in absentia if necessary), THEN impose penalties and seize/confiscate funds. And I'd be taking a hard look at Soros under those same 'sanctions...
Freezing and seizing assets is a temporary measure until behavior that got individuals sanctioned stops. OFAC’s threshold for evidence is pretty stringent, and people do get delisted. It takes a long time to try foreign individuals and entities for financial crimes (witness Halkbank). By that time, those assets will be long gone.
I have not seen any evidence that Soros is involved in behavior that could warrant sanctions.
Understood, and agreed. But if wishes were horses, and all that... sigh
A couple of minor but important corrections on the nature of due process:
Due process doesn't require a criminal conviction before assets can be seized, nor, in these cases, should it. What it does require is that there is a pre-existing legal basis for the seizure, and that the putative owner of the property receive notice and a meaningful opportunity to contest the seizure. (For clarity, in constitutional law the term "seize" includes temporary restrictions like freezing assets, but I'll use it in the same sense as Irene did in the OP, meaning a permanent transfer or confiscation.)
It's true that the current statutes require that DOJ prove that frozen assets are "tainted" as the "proceeds or instrumentalities" of crime before seizing them, and it's true that convicting somebody of that crime is quite sufficient. There are, however, other ways. Most of us have heard of "civil asset forfeiture" (CAF), where the government sues the property itself and seeks to seize it. Mostly we hear about CAF in the context of its widespread abuse (like when DOJ went after a family-owned motel in Tewksbury MA, simply because a lot of arrests happened there: https://www.dailysignal.com/2015/05/07/after-having-his-motel-seized-by-the-government-victim-of-civil-asset-forfeiture-reflects-on-his-fight/). CAF is widely abused, largely to the detriment of society's most vulnerable, and that's a problem. Kleptocapture, on the other hand, is pretty much the ideal case for its proper use.
When we're talking about trans-national criminals who aren't US citizens, who aren't in the US, and who are sanctioned six ways from Sunday and would never get a visa to come here, requiring a criminal conviction presents certain logistical problems. Now, it's true that the US manages to find jurisdiction over virtually every trans-national financial crime, but even with a US warrant and an INTERPOL red notice out for them, many of our kleptocrats are functionally immune to extradition. As long as they're in Russia and Putin is in charge there, nobody will lay a hand on them. If they get on his bad side, they're more likely to encounter Russia's infamously unsafe high-floor windows than they are to get extradited to the US. Since the US doesn't do trials in absentia, that could leave any case for asset forfeiture in permanent limbo -- an unacceptable result, particularly given that these folks chose to park assets in US jurisdiction and avail themselves of the many advantages that our financial system provides to its wealthy clients.
Enter civil asset forfeiture. The government must give notice to the owner of the assets -- presumably the custodial institutions have mailing addresses of-record, but publication will do in a pinch. That person must have the opportunity to oppose the forfeiture. Even if they can't come here in person, they need to be able to hire a lawyer and send that lawyer in to argue against the forfeiture if they want to do that. In the era of Zoom Court, they can even "attend" the hearings without personally crossing the border, though due process has not been interpreted to require this.
They're entitled to a fair trial, if they ask for one, before a neutral arbiter -- a US District Judge who hasn't pre-decided the case. They're entitled to an appeal, if one is customarily available in similar cases (it is). If they get those things, and the government can prove that the assets are linked to criminal activity, the judge can order the assets forfeited, and the USG as their owner can do as it wishes with them. All of this IS super important -- not just because the law requires it and the US holds itself out as a nation of laws, though also that. People make mistakes, including people who work for the government. Due process is how we make sure that we're seizing the right assets from the right people for the right reasons, and that those reasons are authorized by law. Otherwise we're just taking assets from people because government officials said they're bad, and at that point our ability to claim any moral high ground is GREATLY diminished.
(Subject matter authority: I'm a law school graduate and practiced criminal defense for 15 years, but never practiced in the area of international sanctions or any related trans-national context.)
Thanks, Andy. This is interesting stuff, and as I said, I'm hardly an attorney. From what I understand, there's a difference between freezes and forfeitures (maybe I'm using the wrong terminology?). We can't just use the frozen assets that exist in banks and other institutions that belong to sanctioned entities for reconstruction in Ukraine, for example. They need to be kept in the account and accrue interest. They can't just be given away or used to pay down the US debt. So it sounds like what we need is a legal authority if we want to permanently confiscate those funds and use them for reconstruction? In any case, OFAC has a certain standard by which it can sanction an individual or entity and require that assets be frozen.
Wouldn't it make sense that if assets were to be completely confiscated because of sanctions that some kind of due process would need to be granted? Deripaska has been trying to sue OFAC since he was sanctioned in 2018 to get sanctions lifted. He's failed so far. So until he's delisted, he can't access his assets in the United States. They're frozen, and that also means that the US government can't touch those assets either. I would think it would work differently with sanctioned individuals, but I'm not a lawyer either.
The 'logical' way would be have evidence of a crime, arrest/try individuals (in absentia if necessary), THEN impose penalties and seize/confiscate funds. And I'd be taking a hard look at Soros under those same 'sanctions...
Freezing and seizing assets is a temporary measure until behavior that got individuals sanctioned stops. OFAC’s threshold for evidence is pretty stringent, and people do get delisted. It takes a long time to try foreign individuals and entities for financial crimes (witness Halkbank). By that time, those assets will be long gone.
I have not seen any evidence that Soros is involved in behavior that could warrant sanctions.