S. 263 — FAIR Act of 2025

This section eliminates nonjudicial civil forfeiture nationwide by prohibiting federal agencies from conducting such proceedings and requiring all forfeitures through judicial process in U.S. district court (new 18 U.S.C. §983(k)). (Civil forfeiture allows the government to seize property allegedly involved in or used to commit federal crimes without criminal conviction of the owner.) The section further revises notice requirements in civil forfeiture proceedings as follows: (1) requires written notice to interested parties within 7 days after the date of seizure (from 60 days), with limited exceptions; (2) for parties whose identity or interest is determined after seizure but before forfeiture declaration, requires the government to determine identity and address within 7 days after seizure or turnover and to send notice within 7 days after that determination (from 60 days after determination); (3) for property seized by state or local agencies and turned over to federal agencies, requires notice within 30 days after the state or local seizure date (from 90 days); and (4) eliminates agency and court extensions of the notice period previously available for up to 30 or 60 days. The section also (1) authorizes courts to appoint counsel for claimants who are financially unable to retain counsel or for whom representation costs exceed the property's value; (2) raises the government's burden of proof in judicial civil forfeiture proceedings from preponderance of the evidence to clear and convincing evidence, including requiring proof of a substantial connection between the property and the offense and that the owner used the property to facilitate the offense or was willfully blind to such use; (3) specifies that the government bears the burden of proving a claimant is not an innocent owner by a preponderance of the evidence, with claimants able to rebut via reasonable efforts; (4) requires proceedings on motions to set aside forfeiture orders to commence within 6 months of the order (previously unspecified); and (5) revises factors for courts in determining whether to alter equitable sharing agreements to include offense seriousness, property nexus to offense, available sentences, property value, and hardship to owner and dependents.

This section revises asset forfeiture disposition requirements across multiple statutes to eliminate or restrict federal agency retention, transfers, and equitable sharing; direct certain proceeds to the General Fund of the Treasury; and make conforming changes. Specifically: (1) In the Controlled Substances Act (21 U.S.C. 881(e)), it limits dispositions such as retention or transfer to criminally forfeited property only (striking "civilly or" and former subparagraph (A) allowing transfers to federal, state, or local agencies); requires deposit of undisposed proceeds into the General Fund (from 28 U.S.C. 524(c), governing the Department of Justice Asset Forfeiture Fund); eliminates state and local remission and mitigation requests (striking former paragraph (3)); and updates cross-references. (2) In title 18, it requires under section 981(e) that proceeds from forfeitures be forwarded to the General Fund or property transferred on specified terms (replacing prior discretionary authority and striking Asset Forfeiture Fund deposit provisions); and removes "grossly" twice from section 983(g) standards for prevailing party attorney fees. (3) In the Tariff Act of 1930, it eliminates equitable sharing payments from authorized uses of the Customs Forfeiture Fund (CFF)—which reimburses U.S. Customs and Border Protection and the U.S. Coast Guard for seizure, forfeiture, investigative, and related expenses (striking 19 U.S.C. 1613b(a)(1)(F) and (a)(2)(B)); and revises section 1616a to authorize only Secretary of the Treasury dismissal of federal forfeiture proceedings in favor of state law proceedings (striking former subsections (b)-(d) and revising heading from "Transfer of forfeited property"). (4) In 31 U.S.C. 9705, it strikes forfeiture-related fee provisions (former (a)(1)(G), (b)(2), and (b)(4)). (Thus, proceeds previously available for agency operations and state/local law enforcement sharing are redirected to the General Fund.)

This section strikes subparagraphs (A) and (B) of 28 U.S.C. §524(c)(4)—which required deposit into the Department of Justice Assets Forfeiture Fund of fines imposed for certain drug offenses and money laundering—and redesignates subparagraphs (C) and (D) as subparagraphs (A) and (B), respectively. (Thus, only penalties assessed under 31 U.S.C. §5322 and 28 U.S.C. §983(e)(5) remain required deposits into the fund, which supports federal law enforcement, property management, and victim compensation.)

This section revises the prohibition on structuring transactions to evade Bank Secrecy Act reporting requirements (31 U.S.C. § 5324)—which prohibits breaking large cash transactions into smaller ones to avoid currency transaction reports—by (1) inserting a "knowingly" mens rea requirement in the introductory language of subsections (a), (b), and (c); and (2) in subsection (a)(3), limiting the ban on fictitious-name or multiple-extension transactions to "funds not derived from a legitimate source." The section further amends the civil forfeiture authority for currency reporting violations (31 U.S.C. § 5317(c)(2)) by adding a new subsection (d) that requires (1) notice to any person whose property is seized or restrained for an alleged structuring violation of the right to a hearing; and (2) a probable cause hearing in a court of competent jurisdiction within 14 days of such notice, at which the property must be returned unless the court finds probable cause to believe a structuring violation occurred. (Thus, this expedited review limits government retention of seized property pending forfeiture proceedings.) The new hearing requirement applies to seizures after enactment.

This section revises the annual reporting requirements for the Department of Justice Assets Forfeiture Fund (AFF)—which receives proceeds from federal criminal and civil asset forfeitures to fund law enforcement activities—to specify deposits from each type of forfeiture, identifying amounts from criminal forfeitures and from civil forfeitures.

This section specifies the applicability of amendments made by this Act to (1) any civil forfeiture proceeding pending on or filed on or after the date of enactment; and (2) any amounts received from the forfeiture of property on or after such date.