The Suspicious Activity Report (SAR) regime obliges both those working inside and outside the regulated financial sector – so all financial institutions, as well as solicitors, accountants and estate agents, for example – to report any suspicion of money laundering activity to the National Crime Agency (NCA).
If the NCA refuses consent for a transaction to proceed, a moratorium period of 31 days is triggered during which the transaction is prohibited and any property involved, including bank accounts, is frozen. The initial 31-day period may be extended on application by up to six months while the issues disclosed in the SAR are investigated.
We advise individuals and businesses subject to moratorium periods, which often cause significant financial difficulties and reputational risk and which, if left unchallenged, may potentially pave the way for further investigations, restraint or asset freezing orders.
Extending the moratorium period
A Crown Court may permit the extension of a moratorium period, by 31 days at a time, up to a maximum of six months, if it is satisfied that:
- An investigation is underway following a SAR and has not been completed;
- The investigation is being conducted diligently and expeditiously;
- Further time is needed to conduct the investigation; and,
- It is reasonable to extend the moratorium period.
Obtaining an extension of the moratorium period is a relatively straightforward process for the applicant law enforcement agency, as the threshold is low.
How we can help
We can assist with:
- Challenging an extension – there may be grounds to oppose an extension, for example in respect of the pace and diligence of the investigation.
- Engaging with the relevant authority to explore whether a negotiated settlement or compromise can be reached.
While some moratorium periods can be procedurally straightforward to challenge, others can lead to complex litigation which takes years to resolve.
We have a proven track record of challenging applications for moratorium periods and advising on the legal and practical ramifications of doing so.
We understand the stakes can be high, be it the need for urgent access to business or living expenses, the destiny of family assets, or the protection of individual or corporate reputations.
However, a considered strategy is imperative. It is important to be aware of the risks involved when moratorium applications affect your funds or property. There may also be civil law options open to you.
If you find yourself or your firm affected by a moratorium period and need criminal defence, regulatory defence or liability advice, please contact one of our specialist SARs and proceeds of crime lawyers.