Asset Forfeiture

Asset forfeiture (extinción de dominio) is a constitutional, judicial, autonomous, and independent action through which the Colombian State claims title to assets obtained illicitly or destined for illicit activities. Its legal framework is contained mainly in Law 1708 of 2014 (Asset Forfeiture Code), modified by Law 1849 of 2017. Unlike other figures, it is not a criminal sanction nor depends on prior conviction: it operates autonomously from the criminal proceeding and is imprescriptible, meaning it can begin at any time, regardless of time elapsed since the events. The action can fall on any type of asset (movable or immovable, money, vehicles, shares, commercial establishments, economic rights) and develops in two phases: investigation by the Fiscalía and judgment before a specialized judge.

The grounds are listed exhaustively in article 16 of Law 1708 of 2014 and are the only situations under which the Fiscalía may initiate the action. The article contemplates eleven grounds grouped into three categories. Origin grounds apply when assets come from illicit activities (direct or indirect product, transformation or conversion, unjustified patrimonial increase, derived fruits). Destination grounds apply when assets, regardless of lawful origin, were used as means or instrument to commit illicit acts, including lawful assets mixed with illicit ones. Equivalence grounds operate as a compensation mechanism when, having proven illicit origin or destination, it is not possible to forfeit the original asset (for example, due to rights of a third party in good faith exempt of fault or impossibility of location), allowing the action to be directed against other lawful assets of the same owner and equivalent value.

Demonstrating the lawful origin of assets requires complete documentary evidence: tax declarations, bank statements, employment or business income records, contracts, receipts, and financial trails. The burden of proof falls on the affected party. Our team specializes in reconstructing the patrimonial history of our clients to evidence the legitimate origin of each asset. The good faith exempt of fault standard requires not only honest intent but also reasonable diligence in the acquisition.

Precautionary measures (medidas cautelares) include seizure, freezing of accounts, prohibition to dispose, and provisional administration of assets by the Special Assets Society (Sociedad de Activos Especiales). They are imposed by the Fiscalía during the investigation phase and can be challenged before the asset forfeiture judge. Challenging these measures is critical and time-sensitive: our team specializes in motions to revoke or substitute precautionary measures, presenting evidence of the legitimate origin of assets.

Third parties who acquired assets in good faith and exempt of fault have constitutionally protected rights in asset forfeiture proceedings. Law 1708 of 2014 establishes specific opposition mechanisms for third parties to demonstrate they acquired assets without knowledge of their illicit origin and with reasonable diligence. The standard is higher than ordinary good faith: it requires showing all reasonable measures were taken to verify the legitimate origin of the assets.