The introduction of Account Freezing and Forfeiture Orders (under the Criminal Finances Act 2017) has significantly boosted the powers of law enforcement agencies’ to disrupt and seize funds efficiently and expeditiously, without requiring a prosecution or criminal conviction.
We are seeing a dramatic increase in their deployment as part of the drive to tackle illicit finance and the suspected proceeds of crime.
We regularly advise HNW individuals, PEPs and their family members or close business associates targeted by such orders. The sums involved can be substantial and swift action is usually advisable to ensure an order is challenged and the money in question is not ultimately forfeited as part of a wider investigation.
How Account Freezing Orders work
Relevant agencies, including regional police forces, the Serious Fraud Office (SFO) and the National Crime Agency (NCA), can apply to freeze bank and building society accounts where balances exceed £1,000 if the funds are suspected to be either the proceeds of criminal conduct (allegedly committed anywhere in the world) or intended for use in unlawful conduct. A magistrates’ court may grant the order whereby the account(s) in question is frozen for up to two years in order to allow an investigation to be conducted into the provenance of the money in the account.
Cash seizure and detention
Similar powers can be exercised in respect of cash: law enforcement agencies may seize cash suspected of being derived from or to be used in unlawful conduct, and must apply to the magistrates’ court within 48 hours of seizure for permission to detain it, again for up to two years.
Given the very low threshold of reasonable suspicion, these orders are relatively straightforward and easy to obtain.
Account Forfeiture Orders
At the conclusion of, or indeed at any point during, the period of cash detention or account freezing, the authorities may apply for the relevant sums to be forfeited. Although there is a higher evidence bar to be satisfied, crucially there is no requirement for a criminal conviction to have been obtained against any party (or even a criminal investigation to have been opened), and the courts routinely make forfeiture orders.
How we can help
We have extensive experience of:
- Advising on the lawfulness of any seizure or order;
- Mounting successful challenges to a detention or freezing order: this may involve making an application to set aside the order or contesting an application to extend such an order. Alternatively, it is sometimes possible to engage with the relevant investigators to persuade them that the funds are clean and that the order is unnecessary;
- Appeals against forfeiture.
We understand that the loss of access to funds can be highly disruptive and, in some cases catastrophic – financially as well as reputationally. Yet we recognise that the need for swift action should be tempered by a careful and considered strategy.
When challenging a freezing or detention order, or appealing a Forfeiture Order, the burden of proof is on the applicant and even though the civil standard – the balance of probabilities – applies, in practice it is necessary to demonstrate with compelling evidence the “clean” origins of the money. This may take some time to assemble.
It can also be important to guard against adverse implications for third parties that may arise through any challenge to an order.
If you have would like to discuss any of the issues mentioned above, feel free to contact one of our specialist account freezing and forfeiture lawyers.