The Organic Law of Extinction of Ownership, published in the Official Gazette No. 6,745 Extraordinary on April 28, 2023, has introduced a novel and specialized legal regime for the identification, recovery and disposal of assets related to illicit activities in Venezuela. Its main purpose is to combat crimes such as money laundering, financing of terrorism, corruption and organized crime. However, this mechanism may also affect individuals and companies with legitimate assets that are involved in legal proceedings of this nature.
First Case Under the New Law: Sentencia AP11-V-FALLAS-2023-000505
On February 10, 2025, the 15th Civil, Commercial and Traffic Court of First Instance of the Metropolitan Area of Caracas issued the first judgment under this law, number AP11-V-FALLAS-2023-000505. This ruling represents a relevant precedent in the application of the Organic Law of Extinction of Ownership, demonstrating its scope and effectiveness in the framework of the policies of fight against money laundering and other related crimes in Venezuela.
Main Features of the Organic Law of Extinction of Ownership
- Imprescriptibility of the action: The process of extinguishment of ownership is imprescriptible (article 7), which allows the State to take action at any time, regardless of the time elapsed.
- Autonomy of action: The asset forfeiture action is independent of criminal proceedings, allowing it to proceed even without a prior criminal judgment (Article 16).
- Creation of specialized prosecutors' offices: The Public Prosecutor's Office is obliged to create prosecutors' offices dedicated exclusively to asset forfeiture (Article 11).
- No need for secrecy or confidentiality: Bank, stock exchange, tax or registry reserves may not be invoked as an impediment to the investigation and extinction of illicit assets (Article 10).
- Retroactive application: The Law may be applied to property acquired prior to its enactment if its illicit origin is proven (Article 6).
Defense Mechanisms and Legal Representation
In view of the implementation of this Law, it is essential that natural and legal persons whose properties could be subject to a process of extinguishment of ownership have the necessary legal assistance to exercise their right to defend and protect their assets. The defense mechanisms provided for in the Law include:
- Right of opposition to precautionary measures and auctions: According to Article 25, appeals or opposition to precautionary measures adopted by the Public Prosecutor's Office may be filed. In addition, anticipated sales of assets that present a risk of perishing, deterioration or devaluation must be previously authorized by the Court of Extinction of Ownership.
- Rights of affected third parties: Article 8 states that the extinguishment of ownership may affect the property of third parties, but the rights of good faith must be guaranteed. In addition, Article 19 provides for the nullity of the procedure when rights are affected without due notice or procedural guarantees.
- Presentation of evidence and appeals: During the forfeiture process, the right to present evidence, to be heard in a hearing and to challenge adverse decisions through appeals and revocation is guaranteed (articles 15 and 41). The Law recognizes the principle of contradiction, allowing the interested parties to defend their rights and refute the arguments presented by the Public Prosecutor's Office.
Why Venfort Abogados is your Best Ally?
At Venfort LawyersIn addition, we have a team specialized in economic criminal law and asset forfeiture proceedings. Our experience in representing clients in Venezuela allows us to offer effective legal strategies to protect your assets and ensure due process at every stage of the legal proceedings.
If you or your company is affected by an extinguishment of ownership procedure or you wish to prevent legal risks related to this Law, at Venfort Abogados we are prepared to assist you with professionalism, technical rigor and maximum confidentiality. Contact us today for a personalized consultation.
