The Unexplained Wealth Order’s little brother – Account Freezing and Forfeiture Orders14 Feb, 2019 - Fraud and Crime | by Grosvenor Law
In the third blog of the series looking at the powers granted to the authorities within the Criminal Finances Act 2017, Andrew Gilmore and Sophie Adams review the lesser publicised Account Freezing and Forfeiture Orders (‘AFFOs’)
While the Unexplained Wealth Order (‘UWO’) has entered English law with much fanfare and publicity, the Criminal Finances Act 2017 also introduced other, less well-known provisions into the Proceeds of Crime Act 2002. These provisions also give prosecutors the power to freeze the contents of bank and building society accounts and, in due course, hold those monies as forfeit. Welcome to the AFFO!
AFFOs compared to UWOs
An AFFO is split into two parts –
(1) An Account Freezing Order: a court order which relates to a specific bank or building society account that prohibits account holders or signatories of an account from making withdrawals or payments from that account for a period of up to two years. During that period, the money held in that account could, upon application by the Crown, be held as forfeit.
This type of order will be made if a Magistrates’ Court is satisfied that the enforcement officer making the application has “reasonable grounds” for suspecting that money held in that account (“whether all or part of the balance”) is, more likely than not, either “recoverable property” or is intended by any person for use in “unlawful conduct”.
(2) An Account Forfeiture Order: at any stage during the length of the Account Freezing Order, the enforcement officer can apply for a forfeiture order, the second part of an AFFO. The application for this order is also heard at the Magistrates’ Court and, if successful, any monies in the frozen account are held to be forfeit as the proceeds of crime.
An AFFO can be made if suspicion arises in relation to amounts of £1,000 – a significantly lower threshold than the £50,000 required to obtain a UWO or the £10,000 threshold needed to obtain a Property Freezing Order.
Further, where UWOs need to be made in the High Court, an AFFO application is heard at the Magistrates’ Court: a much quicker, simpler and more cost-effective venue for the Crown; and all without the disclosure requirements or costs risks incumbent within the UWO procedure.
The judicial scrutiny afforded to an AFFO application from a District Judge in a busy Magistrates’ Court could be argued to be somewhat less than that given by a High Court Judge when hearing a UWO application.
The speed and ease in which AFFOs may be obtained is clearly designed to complement the Suspicious Activity Reporting disclosure regime that the National Crime Agency uses, but these advantages will also prove a very attractive and hassle-free alternative for prosecutors looking to other Asset Recovery Powers.
It seems that the UWO’s little brother has more bite than was first thought.
What should you do if you find your account has been frozen as a result of an Account Freezing Order or if an Account Forfeiture Notice / Account Forfeiture Order has been made?
AFFOs, and forfeiture itself, are draconian tools now at the fingertips of enforcement agencies. Any action in response should be taken swiftly, including instructing solicitors to advise you properly, to avoid the worst-case scenario.
If any of your accounts end up frozen by an Account Freezing Order, or indeed, if you are in any way affected by an AFFO, you may wish to make an application in the Magistrates’ Court to have the Account Freezing Order set aside or varied. If this is successful, you may have grounds to apply for compensation for any loss suffered by you as a result of an AFFO.
If you are already at the stage where a forfeiture notice has been made that affects you, objections can be raised to the enforcement officer on your behalf whether you are a recipient of the notice or not; alternatively, it may be advisable to make representations at Court. If a forfeiture order has been made and you are affected by that order, there may be scope to appeal the decision.
Grosvenor Law has a specialist team on hand to deal with any aspect of asset recovery.
Andrew Gilmore is Head of Criminal, specialising in money laundering, fraud, asset recovery and all aspects of criminal law.
Sophie Adams is an associate in Grosvenor Law’s commercial litigation team, where she often advises on complex cases in which allegations of fraud and corruption have been made.