Account Freezing Orders and Account Forfeiture Orders can be applied for and granted under section 303Z1 and section 303Z3 of the Proceeds of Crime Act 2002 (‘POCA’) if an enforcement officer has reasonable grounds for suspecting that money held in an account maintained with a bank or building society—
- a) is recoverable property, or
- b) is intended by any person for use in unlawful conduct.
Applications for these Orders are regularly utilised by Her Majesty’s Revenue and Customs (‘HMRC’) company bank accounts, after allegations of fraud are made.
Richardson Lissack has seen a sharp increase in these Orders being applied for by HMRC in relation to allegations of MTIC fraud against corporations. HMRC has changed its approach to investigating MTIC fraud, preferring to adopt a quasi-civil/ criminal investigation which usually commences with an Account Freezing Order.
Account Freezing Orders are made for up to 2 years in the Magistrates Court where the Court is satisfied that there are reasonable grounds to suspect that the account contains ‘recoverable property’ or is intended for use in unlawful conduct. For an account to contain ‘recoverable property’ it must have been obtained via unlawful conduct. The Orders are made without notice and as such it is important to seek legal advice as soon as you become aware that your account has been frozen.
Application to set aside
Applications can be made by the corporation (‘Respondent’) pursuant to section 303Z4 of the Proceeds of Crime Act 2002. Applications are made by the Respondents legal team to set aside the Order. If successful, the Order which was obtained by the investigatory authority is removed by the Magistrates court.
Applications can be made by the claimant pursuant to s.303Z14 of the Proceeds of Crime Act 2002. If successful, the claimant (the Police. SFO, HMRC) seizes the monies which are currently frozen in the bank accounts.
Appeal against decision under section 303Z14
If the Account Forfeiture Order is successfully made an appeal against that Order can be made to the Crown Court within 30 days. Therefore, it is vital to act quickly if you as an individual or as a company have been affected by a decision relating to a Forfeiture. The appeal is made pursuant to s.303Z16 of the Act.
Other Types of Freezing Orders
Another option available to investigatory authorities are Interim Freezing Orders, which are relatively new tools available following their creation by The Criminal Finances Act 2017. These types of Orders are applied for when the NCA or other investigatory bodies are pursuing an individual in relation to an Unexplained Wealth Order. These changes to the law provide the possibility for property believed to be obtained via unlawful conduct to be recovered by using civil proceedings opposed to the need to obtain a criminal conviction and then pursue a confiscation order under the Proceeds of Crime Act. For more information in respect of Unexplained Wealth Orders please click here to see our UWO page.
Our expert lawyers are here to advise and assist you if your company or personal account is subject to either of the orders described above. We will protect your personal position and make every effort to reverse the freezing of bank accounts and to avoid you ultimately losing the funds within them.
Our lawyers are available 24/7 to assist you and provide legal advice. Contact London 020 3753 5352 or Manchester 0161 834 7284. Alternatively you can email email@example.com