Account Freezing Orders

BSQ partner Roger Sahota is one of the UK’s leading experts in challenging Account Freezing Orders, having been instructed in many of the first AFO cases brought.

Introduced in 2018, Account Freezing Orders are a powerful weapon in a fraud investigators arsenal. The new powers under the Police and Criminal Evidence Act allow the police to apply for a bank account to be frozen without having to jump through all the hoops and obstacles associated with the old laws that governed restraint orders.

Getting a bank account unfrozen, even if you have a legitimate explanation to explain where a credit balance came from can be difficult, time-consuming and problematic. At BSQ we have a track record of contesting Account Freezing and Forfeiture applications having been instructed in one of the first cases where the new provisions were relied on. We also offer preventative advice for individuals and companies who are engaged in lawful businesses such as export trading with the developing world and oil and gas trading who fear they may be targeted under the POCA laws.

It can be a shock to discover how draconian the POCA account freezing order laws are for anyone affected by them. Most AFO’s are applied for after the NCA receives a suspicious activity report from a bank – many thousands of SARs are made every year. Often they are triggered by a pattern of cash payments or large e-transfers from a developing country. In the past, most were not acted on. AFO’s are a new and simple tool for investigators to use. They are easy to obtain. The authorities do not need to prove any underlying crime to justify freezing an account. They can target individuals who are not suspected of criminal offending themselves but are believed to hold “dirty” money. Their burden of showing “reasonable suspicion” that a credit balance comes from some type of criminal conduct is very low. Furthermore, while they investigate the provenance of the funds, an account be frozen for up to two years. Having your bank account tied up for 2 years can be crippling for an individual or small business and we specialise in early proactive steps to try and release and recover funds seized and in contesting forfeiture applications.

While obtaining a freezing order to investigate a case may be easy for the authorities, persuading a court that money is held in a bank account should be forfeited is far more difficult. BSQ is currently helping clients in a number of cases to show that the credit balances in their accounts are of a lawful origin and do not represent the proceeds of crime by testing the boundaries of the new law.

As our case studies demonstrate police forfeiture applications are often highly opportunistic and can be challenged. They are frequently made when the police have little or no evidence to suspect the money in an account is the product of illegal conduct. Under the Home Office Asset Recovery Incentivisation Scheme however the police have a strong incentive to pursue these cases. If they win they can keep a percentage of any monies forfeited. This can give them a valuable additional income stream. It is therefore no surprise that AFO applications are rising at a time when police funding has been drastically cut by central government.  BSQ expects to see a sharp increase in the use of these orders and in particular the targeting of companies known to do business in areas of the world associated with high levels of political corruption and bribery.  

Anyone who is subject to an AFO should not be left destitute. The law allows for anyone affected to apply for funding from a frozen account to cover their living and legal expenses while the AFO remains in force.

BSQ partner Roger Sahota acted for client A, one of the first individuals to be made subject to an account freezing order. Having investigated his case for some months, the authorities applied for one of the first forfeiture orders. BSQ resisted the application which attracted considerable media attention.

https://www.theguardian.com/world/2019/feb/07/court-orders-son-moldova-former-pm-pay-466000

Client B was made subject to an account freezing order application. It was broadly alleged by the authorities that money in her bank account was derived from the sale of bitcoin holdings. The authorities alleged that the bitcoin could represent the proceeds of criminal activity.

The case continues with BSQ instructed to vigorously resist any application for forfeiture.