Draft bill 127.

Summary.

The draft bill establishes a framework for recovering property acquired contrary to the Constitution (Constitución), the law, and good faith, with the stated aim of combating drug trafficking and its proceeds. In investigations and trials involving drug related offenses, prosecutors and criminal judges, within their respective powers, must identify, locate, and recover movable and immovable property derived from an offense or used to commit it, together with unlawfully derived profits, fruits, products, returns, and exchanged assets. That property would be transferred to State ownership.

The action to recover property would be handled separately from the personal action concerning criminal liability, within the same proceedings. Transfer to the State would cover property whose wholly or partly lawful acquisition cannot be substantiated, whether the person is acquitted or found guilty of a drug related offense. It also covers property transferred to third parties acting in bad faith, to relatives within the fourth degree of consanguinity or affinity, or to legal entities whose beneficial owners, shareholders, or board members are the person under investigation, accused, on trial, or convicted, or those relatives. Transfer upon death does not legitimize the property.

Property subject to transfer includes the proceeds, instruments, and material objects of unlawful activities; transformed or converted property; lawful property used to conceal unlawful property or mixed with it; unjustified increases in wealth where there are reasonable grounds to consider them unlawfully derived; and related income and benefits. Lawful property of equivalent value is included when the corresponding property cannot be located or secured, or when a good faith third party's right to it is established. Legal transactions do not legitimize such property, subject to the stated protection for good faith third parties and the presumption of bad faith applicable to certain related beneficial owners. Banking, corporate, foreign exchange, securities, and tax confidentiality could not be invoked against access under domestic law.

The draft bill protects rights recognized by the Constitution and applicable international treaties. It requires a prior judicial order for restrictions on fundamental rights, except in cases of urgency or substantiated need, which require judicial review as soon as possible. It permits suspension of disposal rights, preventive attachment or seizure, and physical taking of property regardless of ownership, without requiring the authority to post security. These measures supplement those in the Code of Criminal Procedure (Código de Procesal Penal). The Ministry of Economy and Finance (Ministerio de Economía y Finanzas) would immediately administer secured property through external services, trusts, leases, or other contracts, paying expenses from property returns and subject to State oversight. Property at risk of loss, deterioration, depreciation, or disproportionate costs could be sold in advance, with the proceeds deposited in a financial fund or account.

The Public Prosecutor's Office (Ministerio Público) and the Ministry of Economy and Finance would set rules for distributing and using recovered property and funds and address gaps in the law through regulations. The Code of Criminal Procedure (Código de Procedimiento Penal) would apply supplementarily. The proposed law would take effect six months after its promulgation in the Official Gazette. Its provisions concern those institutions and criminal justice authorities, as well as trust companies, financial institutions, property owners, and companies connected with drug related investigations.