Account Freezing Orders (AFOs) are becoming an increasingly popular weapon for criminal investigators and the police in tackling economic crime and money laundering. They are a powerful and effective tool for authorities to freeze and seize funds in bank accounts belonging to individuals or corporate entities where criminal activity is suspected.
AFOs were introduced by the Criminal Finances Act 2017, which amended parts of the Proceeds of Crime Act 2002 (POCA) and gave new powers to the Magistrates’ Court to freeze bank accounts containing funds suspected to represent criminal proceeds.
How Are Account Freezing Orders Granted?
Account Freezing Orders are relatively easy to obtain as the authorities do not have to prove that a person is involved in - or has benefitted from - criminal conduct in order to justify freezing an account.
An Account Freezing Order will usually be granted where there is a suspicion that monies held in a bank account originate from criminal conduct or that they are intended for use in criminal conduct. There does not even have to be an underlying criminal investigation. The minimum financial threshold for an Account Freezing Order is £1,000.
The civil standard of proof (i.e. the ‘balance of probabilities’ test) applies in determining whether an AFO should be granted, which is a much lower threshold compared to the criminal standard of ‘beyond all reasonable doubt’. This means that it is now much easier to get a bank account frozen by police without them going through the rigmarole of obtaining a Restraint Order.
The inevitable reality is that when faced with an application for an Account Freezing Order, the Magistrates’ Courts will usually be very easily persuaded by the authorities that there is suspicion that funds derive from criminal conduct, or are intended for use in criminal conduct, based on the civil standard of proof.
How Long Can Account Freezing Orders Last?
Frozen bank accounts can last up to two years whilst the authorities investigate the provenance of the funds.
If the authorities suspect that the funds in question are the proceeds of crime or will be used for criminal conduct, then a further application can be made to the Magistrates’ Court for forfeiture of the frozen funds.
What Impact Could An Account Freezing Order Have?
Given the relative ease in which Account Freezing Orders can be obtained, they can often have a crippling effect on an individual’s or company’s finances.
For example, your direct debits and standing orders will be cancelled, and day to day banking facilities (internet banking, bill payments and cash withdrawals) will be suspended.
You would be able to make small withdrawals each week to live on, but would need to make an application to the court in order to do so.
Defending An Account Freezing Order
An Account Freezing Order can be challenged by any affected person.
As stated above, the impacts on both individuals and business can be devastating.
It is therefore important to act fast and obtain immediate legal advice so that robust and effective steps can be taken to challenge the AFO and ultimate forfeiture application.
You can find out how Monan Gozzett could help you challenge an Account Freezing Order .
If you would like to discuss your options, then please do not hesitate to get in touch with us.