Account Freezing Orders (AFOs) have become a prevalent tool for investigative authorities to temporarily freeze funds in accounts held by individuals and businesses. These orders are typically triggered following a Suspicious Activity Report (SAR) made by a financial institution, such as a bank or building society, due to unusual transaction activities.
AFOs are often issued ex parte by a solicitor, meaning they are granted without prior notice to the account holder. In such applications, the applicant is obliged to provide full and frank disclosure to the court, which includes any information that might undermine their application. It's vital to verify that the application complies with the statutory requirements set out in the Proceeds of Crime Act (PoCA) 2002.
The imposition of an AFO can significantly disrupt both personal and business financial operations. The inability to access or manage funds in the affected accounts can create considerable difficulties.
An AFO can be issued if there are “reasonable grounds” to suspect that the funds in question are either proceeds of crime or intended for use in criminal activities, as defined by PoCA 2002. Importantly, there does not need to be an ongoing criminal investigation, and the account holder themselves does not need to be under any suspicion.
Once granted, an AFO can remain in effect for up to two years. Usually, the initial application will request the freezing of the funds for a period of six months. However, applications can be made at any stage to discharge the order or, conversely, to forfeit the funds permanently.
When an account is subjected to an AFO, it is crucial to seek the advice of a specialist solicitor. A key part of our role involves scrutinising the grounds for the AFO and ensuring that the application for the order was made following correct legal procedures.
Our specialist solicitors can provide expert advice on contesting AFOs, preparing evidence, and offering professional opinions on the strength of the application. Managing communication with the investigating body, including responding to information requests, is a crucial part of this process. It is important to proactively challenge the investigative body to ensure they act within their legal powers and fulfil their obligations under the law.
In some circumstances, it may be possible to use some of the frozen funds to meet the legal fees associated with challenging the AFO. This is typically the case if the owner of the frozen funds has no other assets with which to pay any legal fees.
If you are currently subject to an AFO or have been notified of an impending AFO application against funds held in your accounts, you should seek immediate legal advice. Our expert legal guidance can be instrumental in navigating the complexities of AFOs and protecting your financial interests.
Our Business Crime & Civil Recovery team, headed up by James O’Hara is ready to assist. James is recognised by Chambers and Partners as one of the few experts in “PoCA Work and Asset Forfeiture,” and offers specialised legal assistance in these matters.
