Extinction of Domain and Fundamental Rights

The bill being discussed in Costa Rica basically seeks to extinguish the assets of organized crime, but there are those who claim that as proposed, it puts at risk the presumption of innocence of individuals.

Wednesday, May 22, 2019

The extinction of domain is a concept that in practice refers to seizing or confiscating assets linked to criminal activities, and then transferring them in favor of the State. This can lead to loopholes in the law, since generally any property whose origin cannot be explained by its owner would be in the sights of the authorities.

In Central America there are countries in which similar laws have already been passed and are in operation, such as El Salvador, Honduras and Guatemala. And in the case of Panama, in 2013 a draft of the subject was presented.

See "El Salvador Approves Forfeiture Act” and "Panama: Bill on Forfeiture of Assets".

In Costa Rica, on May 13, 2015, the special bill for the extinction of domain was presented to Congress, the discussion of which is still valid in the country. Within the framework of the discussions, at the request of the legislative commission processing the legal initiative, the Commission for the Master's Degree in Criminal Sciences of the University of Costa Rica prepared a report on the latest version of the draft Special Law on Domain Extinction.

The report states that "... From being a bill to dismantle organized crime through the suppression of profits, it becomes a bill that seeks to seize all capital whose origin cannot be explained by its owner, being irrelevant what that origin."

Nacion.com reports that "... the panelists question that the project contemplates an "extinction of domain formulated with confiscatory and sanctionatory nuances". "In this case, the presumption of innocence is breached by including an inversion of the burden of proof (if the administered party does not justify the origin of the patrimony, he loses it)," criticizes the report."

Regarding the experience in other countries where the law already works, Elfinancierocr.com explains that "... In addition to these three examples five other countries in the region already apply the extinction of the domain. In all of them there are doubts about the result of its execution although powerful blows are also pointed in favor. In Guatemala, the figure achieved the confiscation of almost $5 million in 2018. In the Central American country, a total of 97 domain extinction processes were carried out, with the result that assets passed in favor of the State. 20 more than in 2017."

See articles: From Nacion.com, "Proyecto de ley amenaza derechos fundamentales", from Elfinancierocr.com, "EF explica: ¿Qué es la extinción del dominio y por qué tiene tantos opositores", and "La extinción del dominio no se libra flaas ni críticas en los países latinoamericanos donde está activa".

More on this topic

Organized Crime and Capital Growth

February 2016

In criminal proceedings declared as special because of their delinquent nature, such as organized crime in Costa Rica, demands can be made, by civil means, for explanations of capital increases on the part of natural or legal persons who may lose them if they are not able to prove the legality of their origin.

EDITORIAL

Panama: Bill on Forfeiture of Assets

November 2013

A draft bill proposes that the state seize goods from money laundering and other illicit activities.

"The suggestion has been raised to create a law that relates to forfeitures, because there is so much income and assets being generated, but we do not know what to do with those assets" said Ana Belfon, from the Attorney General's Office.

El Salvador Approves Forfeiture Act

November 2013

The standard allows the state to seize assets related to illicit operations based on tax fraud, money laundering, drug trafficking or organized crime.

Salvadoran Congress also agreed to add the crimes of fraud along with those of public finances and corruption to the Special Law on Forfeiture and Management of Property of Illicit Origin or Destination.

"TOO BIG TO JAIL"

December 2012

While Central American businesses assume the costs of the bureaucracy associated with money laundering controls, big banks are granted a license to steal.

EDITORIAL

The United States has lost the moral authority in the fight against drug trafficking, and countries who suffer in the drug war, should taken that into account.

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