Asset forfeiture is a process by which the government permanently takes property away from an owner, without paying just compensation, as a penalty for offenses committed by the property or the owner.  In the US, the government can forfeit ships and/or its cargo for violation of admiralty law.

In order to initiate an action in rem, a maritime lien should exist.[i] When a creditor has a maritime lien over a ship, the creditor can cause arrest of the ship or its cargo when it is within the territorial ambit of a federal court.  Regarding the administration of maritime seizures, federal district courts have wide authority.

Generally, admiralty jurisdiction of federal courts is dependent on arrest of ships made on navigable waters.  The court will not acquire admiralty jurisdiction until the ship or cargo is arrested within that district.  However, the jurisdiction does not extend to arrests made on land.[ii] When there is a violation of admiralty law, the law provides provisions for recovery of penalties or forfeiture.  However, admiralty jurisdiction to recover penalties extends only to seizures in navigable waters.

Certain acts of Congress extend admiralty jurisdiction over matters regarding penalty and forfeiture, to aids that are situated in land and help in navigation.  Some states provide that admiralty jurisdiction of courts depends upon the ship and/or its cargo being in navigable waters at the time of filing the complaint.  In these states, the location of actual seizure of the ship does not determine admiralty jurisdiction of the court.[iii]

Generally, in an admiralty action in rem, a ship is considered the offender.  This rule applies to forfeiture as well as penalty suits in admiralty.  Therefore, procedures are taken against the offender ship and not its owner in such cases.  However, when a personal penalty case against a ship owner is also instituted, both proceedings will be independent of each other.

[i] The Young Mechanic, 30 F. Cas. 873 (C.C.D. Me. 1855)

[ii] The Sarah, 21 U.S. 391 (U.S. 1823)

[iii] Dodge v. United States, 272 U.S. 530 (U.S. 1926)