Account Freezing Orders?

There are several mechanisms that investigators can use during the process of investigations to gather evidence. When investigating financial crimes, or when law enforcement agencies believe that certain funds may have been generated through criminal activity, there are several orders they can pursue to confirm this. These agencies can also freeze access to assets with a view to recovering them after an investigation.

The orders that are most relevant to these cases are as follows:

• Production orders, which are used to gain access to documents like bank statements relevant to investigations
• Restraint orders, which freeze access to a person's assets or property while an investigation is ongoing
• Account Freezing Orders (AFOs), which are similar to restraint orders and restrict access to a person or business’ bank or building society account. 

There are important differences between these legal instruments - for example, an AFO is easier for law enforcement agencies to get than a restraint order, but there is also scope for the subject of an order to vary it. As such, these mechanisms are applied differently - but all three may be used in different ways during the same investigation. They may also be applied without notice, meaning that you will be given no advance warning that an order is about to go into effect.

Finding yourself the subject of this type of order can be distressing, especially if you lose access to the money you need for rent, food and other living expenses. AFOs and restraint orders can last for years and leave you in a difficult position, especially if you cannot afford to pay for legal support. A production order may reveal confidential or sensitive information about your finances in a way that you would prefer to avoid.

Thankfully, an experienced solicitor can often help to have these orders varied or discharged. This can include an exception to an AFO or restraint order that will allow you access to living expenses, or the funds you need to mount a legal challenge. Investigating authorities must meet certain criteria when pursuing this type of order against an individual, and if they have failed in their legal duties at any stage, this may be grounds to have the order discharged.

The experts at JMW Solicitors have a broad range of experience in this area and have lobbied successfully to have production orders, restraint orders and AFOs varied or discharged on behalf of our clients. Here, we break down the procedural considerations that investigators must keep in mind when securing this type of order, and how you can take action if they fail to do so.

Production orders

The subject of an investigation may not be aware that a production order has been sought against them. Typically, it will be supplied to the institutions with which they hold accounts to secure information pertinent to the investigation. Even so, there may be actions you can take if a production order has been granted that relates to your personal or financial information. 

Here are the key steps that investigators must follow when applying for a production order:

• Grounds for an application: investigators must have reasonable grounds to believe that the information or documents they seek are relevant to a specific criminal investigation. They must also show that the order is necessary and proportionate to the investigation's objectives.
• Application to a Crown Court judge: investigators submit their application for a production order to a Crown Court judge, who will be responsible for reviewing and authorising the order. The application must include details of the case, the reasons the investigating body is seeking the order, and the specific information or documents they want to obtain.
• Review and approval: the judge should carefully review the application to assess its legality and proportionality. They may seek additional information or clarification from the investigators if necessary. The order can only be granted if the judge is satisfied that it meets the legal criteria. However, just because a judge has declared that the order is proportionate and legally valid, this does not mean that it cannot be challenged after it has been granted.
• Execution of the order: investigators can use the production order to compel the person or organisation in possession of certain documents to provide them within seven days. Failure to comply with the order can lead to legal consequences.
• Safeguards and conditions: if the production order is granted, it will specify the conditions and safeguards that must be followed when executing the order. These conditions may include restrictions on how the information is used, stored or shared to protect individuals' privacy rights. For the order to remain valid, investigators must uphold the obligations it specifies. 
• Record-keeping: investigators are required to keep detailed records of the information obtained through the production order and how it is used. This record-keeping is essential for accountability and oversight.

The use of production orders is subject to review and oversight by various bodies, including the Investigatory Powers Commissioner's Office (IPCO). IPCO ensures that the orders are used in accordance with the law and that individuals' rights are protected.

Even with this oversight, law enforcement bodies can make mistakes in working to secure production orders. If there are legal errors in the application or execution of an order, or if investigators fail to fulfil any of their legal obligations during this process, this may be grounds to have the order withdrawn or varied.

Restraint orders

When investigators apply for a restraint order, they must follow specific procedures outlined in the Proceeds of Crime Act 2002 (POCA) and related legislation. These procedures are designed to ensure that the application process is lawful, transparent and subject to appropriate oversight.

This works in much the same way as the application process for a production order, with some minor variations. The important similarity is that a restraint order can only be applied for when a criminal investigation is ongoing.

Investigators must have reasonable grounds to believe that the defendant's assets are derived from or connected to criminal activity. They must demonstrate that there is a risk that these assets may be withdrawn, moved or otherwise disposed of in a way that would frustrate the confiscation process. They will apply to the Crown Court and provide evidence and information to support their application, including details about the alleged criminal activity, the assets to be restrained, and the reasons for seeking the order.

The restraint order typically includes some of the assets and property that are subject to the order – however, the restraint order will prevent an individual from dealing with all of their assets. This can include property anywhere in the world that belongs to the individual.

Restraint orders often include exceptions to allow the individual to access funds for reasonable living expenses and other necessary costs. These exceptions are designed to ensure that an individual’s basic needs are met. If there are no exceptions granted in a restraint order that applies to your finances, we have provided advice on securing legal support.

The court has the discretion to vary or discharge a restraint order if circumstances change or if it is determined that the order is no longer necessary or proportionate. Your solicitor can manage this and apply to the court to review a restraint order in cases where they can argue it is no longer necessary or should not have been granted. As with any of these types of orders, investigators must follow the legal requirements that apply. Any mistakes or failures in this area can offer an opening to make a legal challenge against the order.

AFOs

AFOs are used to freeze bank accounts and other financial assets suspected of being involved in or derived from criminal activities, which makes them similar to restraint orders. Investigators may apply for an Account Freezing Order (AFO) under the powers granted by the Proceeds of Crime Act 2002 (as amended by the Criminal Finances Act 2017). Crucially, they do not need to launch a criminal investigation or even suspect you of a specific crime to secure an AFO, which is a key difference between AFOs and production orders.

The application for an AFO is made to the Magistrates' Court in England and Wales. The Court must be satisfied that there are reasonable grounds to believe that the funds in the account are connected to criminal activity and that freezing it is necessary and proportionate. This only needs to be established “on the balance of probabilities”, which is a lower legal standard than is needed to secure a restraint order.

The application should include details about the suspected criminal activity, the specific bank account to be frozen, and the reasons for seeking the order. The account holder, or any other interested party, has the right to legal representation and can challenge the application in court. They can present their case and dispute the grounds for freezing the account. However, in many cases, AFOs are granted at ‘without-notice’ hearings, which means that the subject of the order will have no opportunity to object. Often, people do not find out that they are subject to an AFO until it goes into effect, and they suddenly find themselves without access to their business or personal bank account.

If the court is satisfied with the evidence and the legal criteria are met, it will issue the Account Freezing Order. This order requires the financial institution to freeze the specified account and prohibit any transactions involving the frozen funds. Thankfully, even after the order goes into effect, there is an opportunity for the account holder to apply to have it varied or discharged. Speak to a solicitor if you have found yourself in these circumstances.

The team at JMW has vast experience and expertise in representing clients during serious crime and financial investigations. This includes building a defence strategy and outlining all of your options - so, if you are subject to an Account Freezing Order or restraint order, we can work with you to have the order varied or discharged where applicable. We can also provide production order defence services and any other type of legal support you need through the investigation process.

If you are in this position, contact us today. Call our team on 0345 872 6666 or use our online enquiry form to request a call back at your convenience.