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Account Freezing Orders
Account freezing orders (AFOs) are an increasingly common mechanism for investigatory authorities to target cash held in bank accounts or building societies, which they believe to have derived from criminal proceeds, or intended for use in criminal activity. If you are the subject of an AFO, specialist legal advice must be sought.
Having the funds in a bank account suddenly frozen is a draconian financial restriction. If you are affected by an AFO, you should seek specialist legal advice as soon as possible to discuss potential implications, any variations or exclusions that can be applied for and to seek advice in respect of any underlying criminal charges being brought in the future.
Our private client criminal law service is designed to provide a first-class level of care to those facing allegations of financial crime, in particular in the initial stages of proceedings where accounts and assets may be frozen. The bespoke nature of our service means we are able to be as dedicated and thorough as is required in cases such as these.
How JMW Can Help
Section 303Z4 of the Proceeds of Crime Act (POCA) allows an application to be made by the person affected by the order (the owner of the bank or building society account) to set aside the order. In addition, any third party with a legitimate interest in funds contained in a frozen account can apply to vary the freezing order to seek the return of the funds belonging to them.
As well as applying for the order to be discharged, the holder of the bank account may seek to vary the order. Section 303Z5 of POCA sets out ‘exclusions’ that may be considered. Section 303Z5 provides that there is the power to vary an AFO to allow for an exclusion from the general prohibition on making withdrawals or payments from the account. This may include allowing the account holder to:
- Meet reasonable living expenses
- Carry on a trade, business, profession or occupation
The exclusions may also be relied upon to allow for payment of reasonable legal expenses.
If you are subject of an AFO, expert legal advice should be obtained to consider any applications that can be made to vary or discharge the order.
JMW currently represent and advise individuals and companies across the country and internationally who have been served with an account freezing order. We are able to provide assistance throughout the proceedings. We provide national representation and have experience in representing clients who have assets and accounts outside of this jurisdiction.
What is an Account Freezing Order?
An AFO is an order that, subject to any of the exclusions discussed below, prohibits the holder of a bank account from making any withdrawals or payments from the account. The powers that enable a court to order an AFO, under POCA, were introduced by the Criminal Finances Act 2017. The relevant provisions are contained within sections 303Z1 to 303Z19 of POCA.
The orders are designed to provide authorities with ‘quick and effective action against funds held in bank accounts, to recover the proceeds of crime, and to tackle money laundering, corruption and terrorist financing’ (Criminal Finances Act 2017).
Once made, an AFO completely prohibits the use of the account, and an individual or company subject of the order may find that their account has been unexpectedly frozen as the provisions of POCA allow the order to be made without notice if it is deemed appropriate in the circumstances. The relevant bank or building society account subject of the AFO must contain a minimum of £1,000 for the court to make the order.
Where an AFO is applied for, the court will make the order if it is satisfied (on the balance of probabilities) that there are reasonable grounds for suspecting that the money held in the account is recoverable property, or intended by a person for use in unlawful conduct. ‘Recoverable property’ means that the funds in the account are alleged to have been
obtained through unlawful conduct. The threshold to be met is low, namely ‘suspicion’ and AFOs applied for are routinely granted by the court.
Who can apply for an AFO?
An ‘enforcement officer’ can apply to the Magistrates’ Court for an AFO. This can include:
- An officer of Revenue and Customs
- A police constable
- A Serious Fraud Office (SFO) officer
- A National Crime Agency officer
- An accredited financial investigator
- Trading Standards officer
The mechanism is widely available to a number of authorities. The officer applying for the AFO can apply to any Magistrates’ Court in England and Wales.
How long will the AFO be in force?
If an AFO is made by the court, the order will specify the length of time that it is to be in force. This may be a period of six months and cannot exceed a period of two years from the date that the order was made. If the order is made for a shorter period, such as three or six months, an application can be made to extend the order.
For the period of time that the AFO is in force, it is intended that the time is used by the authority to investigate the provenance of the funds that are frozen.
What is an Account Forfeiture Notice?
Following an AFO, an application for the funds held in the frozen account to be forfeited may be made, under an Account Forfeiture Notice or a Forfeiture Order. If this is the case, an individual who is subject of an AFO may receive a Notice for Forfeiture. The notice will set out that any objections to the forfeiture of the funds must be made within a period of 30 days.
When an application for forfeiture is made, the court will consider whether it is satisfied that the money held in the account is recoverable property (originating from unlawful conduct) or is intended to be used in unlawful conduct. It may be that the investigation that has taken place whilst the AFO is in place, leads to criminal proceedings being brought by the investigating authority.
Talk to Us
Get in touch with the expert team at JMW today for advice in relation to account freezing orders. Call us on 0800 652 5559 or complete our online enquiry form and a member of the team will call you back as soon as possible.