MEXICAN SENATE AGREES ON ASSET FORFEITURE LAW

C O N F I D E N T I A L SECTION 01 OF 02 MEXICO 000982

SENSITIVE
SIPDIS

E.O. 12958: DECL: 12/21/2017
TAGS: PGOV PREL PINR MX
SUBJECT: MEXICAN SENATE AGREES ON ASSET FORFEITURE LAW

Classified By: Political Minister Counselor Charles V. Barclay.
Reason: 1.4 (b),(d).


1. (C) Summary. The Senate plenary unanimously approved on
Thursday the asset forfeiture law, known in Mexico as
"extincion de dominio," which has been languishing in
Congress since it was proposed early last session. The bill
is intended to enhance the government's ability to target the
finances of organized crime groups where it hurts and will
allow authorities to initiate asset forfeiture proceedings
before securing a criminal conviction. The sudden passage by
the Senate surprised most observers, used by now to a
Congress increasingly deadlocked in the advent of mid-term
elections. The legislation is an important new tool for the
GOM in its fight against organized crime. With less than a
month left in the session, Congress may be hard-pressed to
pass other significant items of still pending security
legislation, but the approval of the asset forfeiture law
suggests that both parties are still willing to come to terms
on important security issues. End Summary.

Senate Fisticuffs End in the Bill's Approval
--------------


2. (C) The Senate plenary unanimously approved on Thursday
the asset forfeiture law, known in Mexico as "extincion de
dominio," which has been languishing in Congress since it was
proposed early last session. It will now go to the Chamber
of Deputies for a vote, where debate is likely to be less
contentious since parties almost certainly have already
ironed out major disagreements in the Senate. Most analysts
predict that it will face little opposition from the lower
house, but even short delays could compromise the bill's
passage this session as Congress will adjourn April 30 and
will reopen with an entirely new Chamber in September.
Chamber leadership has said that deputies will carefully
review the Senate draft, and PRI Chamber President Cesar
Duarte has said they will particularly focus on protections
for third party property owners who unknowingly have
benefited from organized criminal activities, such as a
landlord who unwittingly rented an apartment to a drug
trafficker.


3. (C) The bill is intended to enhance the government's
ability to hit organized crime groups where it hurts -- their
wallets. It will allow authorities to initiate asset
forfeiture proceedings in order to seize property from
suspected drug traffickers and other criminals before
securing a criminal conviction. This provision should
significantly expedite the seizure process, since under
existing laws, suspects must first be tried and convicted
before their property can be seized. Property bought with
income from or used in connection with organized crime,
kidnapping, drug trafficking, vehicle theft, or human
trafficking is eligible for seizure under the new law, and
proceeds from the confiscated goods will be used to recover
government costs and compensate the victims of organized
criminal acts. Third party holders of illicitly gotten goods
can also be subject to the seizure process to prevent
organized criminal groups from hiding assets in the names of
friends or family members. Related to the law, the Senate
approved at the last minute a proposal by PAN Senator
Santiago Creel to modify the Law of the Amparo, or legal
injunction mechanism, that will prevent asset forfeiture
proceedings from being unnecessarily suspended or prolonged
by defendants in the midst of the process.


4. (C) Local political and security experts Jorge Chabat and
Juan Pardinas have expressed their surprise that Senate
passed the law as quickly as it did given the progressively
tenser political climate in the run-up to the July
legislative elections. The asset forfeiture proposal has
become emblematic of Congress' relatively fitful work on
outstanding security legislation and the increasingly
rancorous relationship between the PAN and the PRI. The bill
has been the subject of heated debate for months, and PAN and
opposition Senators literally almost came to blows due to
disagreements over several articles in the plenary session on
Thursday. PRI Senators accused the PAN of holding up
approval of the bill for its own political purposes -- namely
to blame the PRI for the delay -- and the PAN charged the PRI
of having obstructionist tendencies.

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5. (C) Indeed, the PRI does appear to be at least partly
responsible for delaying passage of the legislation early
this session, and both party politicking and legitimate
substantive grievances may be to blame. PRD Senator and a
key drafter of the asset forfeiture text Tomas Torres told
Poloff in March that the PRI's call for further discussion on
the legislation was a move purely designed to punish the PAN
for German Martinez's volley of rhetorical attacks against
the party. Other analysts have contended that the bill was
flawed, lacking protection for innocent third party property
holders and too easily used by petty bureaucrats for
political or personal retribution, that the PRI was correct
in identifying. New safeguards were included, such as
allowing only high-level federal prosecutors to initiate such
proceedings, which in theory should increase official
accountability and better shield innocent parties.

Comment
--------------


6. (C) The asset forfeiture law is an important new tool for
the GOM in its fight against organized crime. As Jorge
Chabat noted, the drug war will be a long fight, but this
legislation locks in an important new weapon. Colombian
diplomats have emphasized to Poloff that its own property
seizure law was key to its success in combating drug
trafficking in its own country, and have long sought to help
Mexico draft a similar law. With less than a month left in
the session, Congress may be hard-pressed to pass other
significant items of still pending security legislation,
especially given the acrimonious new political environment.
Nevertheless, the approval of the asset forfeiture law
suggests that both parties are, at the end of the day, still
willing to come to terms on important security
issues...particularly when their reputations are at stake.

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