For the first time, authorities in Argentina are using a criminal asset seizure program — a legal mechanism that strips criminal groups of their wealth but comes with potential pitfalls.
On July 16, Argentina’s Attorney General’s Office requested the forfeiture of nearly $19 million in assets from members of the Loza clan, a large criminal organization with international connections.
This was the first large-scale use of a decree signed by President Mauricio Macri that created the Asset Seizure Regime (Régimen de Extinción de Dominio), after a similar bill had failed to pass through Congress for two years.
The asset forfeiture program allows authorities to investigate the origins of assets owned by suspected criminals in a process that runs parallel to a criminal investigation. If the owner of the assets cannot justify how they were paid for, they can be seized even before a conviction is secured.
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Under the decree, cases involving crimes such as drug trafficking, corruption, organized crime, terrorism and people trafficking would be liable to asset seizure. Authorities can look at crimes that go back as far as 20 years.
The Loza clan’s assets were seized after 12 members of the group were arrested last December and charged with crimes that included drug trafficking and money laundering in Argentina. Others members of the organization are under investigation in Spain and Italy.
The clan ran a sophisticated cocaine trafficking ring involving drug producers in Peru and Bolivia, corrupt customs officials in Argentina, and a drug distribution network in Spain and other European countries.
Authorities said the organization was particularly efficient at laundering millions of dollars in illegal earnings through the purchase of hundreds of luxury properties and vehicles in a number of countries.
InSight Crime Analysis
In principle, asset forfeiture hurts crime groups the most where they can least afford it: their wallets.
Asset forfeiture has helped in the dismantling of mafias and drug organizations, allowing authorities to confiscate cash or property obtained through illicit means. But critics say asset forfeiture laws are often too broad and poorly implemented.
Even though these policies are relatively new in Latin America, at least a dozen countries have similar laws in place and others are either considering or in the process of implementing them.
Argentine prosecutors have said that the asset forfeiture decree is essential, as it can help shorten often lengthy criminal processes.
Critics, however, say it creates a parallel investigation, where the accused is forced to prove they are innocent, which runs counter to Argentina’s constitution. Establishing ownership of assets is also difficult, which could lead to the forfeiture of money or property without criminal ties.
In addition, asset seizures in Argentina could be used for political retribution, as many high-level politicians are facing corruption charges and the country’s judiciary is confronting much criticism.
Authorities assure this will not happen, but a strong, independent oversight mechanism is needed to provide as much transparency as possible to the process. This type of mechanism, however, is not being considered.
Asset forfeiture laws have also been abused.
In the United States, civil forfeiture laws allowed cash-strapped police departments to add seized assets to their budgets. This provided an incentive for police to confiscate money, cars and homes from people who were later convicted of only minor crimes.
Latin American countries have also struggled with government red tape and a lack of consensus when it comes to the use of funds from asset seizures.
In Mexico, for example, President Andrés Manuel López Obrador has proposed creating a new government body to allocate seized funds to education, sports and other social programs. But questions remain as to whether this plan is realistic.
In Argentina, officials have placed an emphasis on the amount of cash and property to be seized, as opposed to what exactly authorities will do with the money.