Account Freezing Orders allow law enforcement agencies, such as the National Crime Agency (NCA) or police forces, to freeze funds in bank or building society accounts. They were introduced under Section 303Z of the Proceeds of Crime Act 2002, as amended by the Criminal Finances Act 2017. These orders

Section 303Z1 of the Proceeds of Crime Act 2002 outlines the grounds for applying for an AFO, the application process, and the powers of the court.

An account Freezing order can be granted by the Court where there are reasonable grounds to suspect that the funds are recoverable property or intended for use in unlawful conduct. Section 303Z2 of the Proceeds of Crime Act 2002 details restrictions on making an application, including thresholds and authorization requirements.

To obtain an Account Freezing Order, law enforcement agencies must apply to a magistrates’ court. The application must demonstrate, through evidence, that there are reasonable grounds to suspect that the funds in the account are either recoverable property (i.e., obtained through unlawful conduct) or intended for use in criminal activity. The court must also be satisfied that the order is proportionate and in the public interest.

An account freezing order can be put in place for a maximum of two years, this is set out under section 303Z3(4) of the proceeds of crime act 2002. However, it is often the case that magistrates will order on account freezing order for a shorter length of time, and the prosecution may seek to extend the account freezing order period If necessary. My experience is that initial periods of freezing tend to be for six months with extensions commonly sought thereafter.

The general rule is that once an account freezing order has been granted the account is frozen and the account order holder is prohibited from accessing or using the money the purpose of this is to preserve the funds while law enforcement agencies investigate whether the funds are linked to criminal activity. However, in certain circumstances the order can be varied for reasonable living expenses; this is authorised under section 303z5 of the Proceeds of Crime Act 2002. If an application is to be made then the account holder or their legal representative should make an application to the court requesting the release of funds this should usually be accompanied by detailed evidence as too the need for the funds.

Yes, an Account Freezing Order can be extended but the prosecution must apply to the court to extend the freezing period. The court may grant an extension if it is satisfied that further time is needed to investigate the funds and that is it is in the public interest to do so. It is of note that extensions are not automatic and must be justified within the application. Any application for an extension can, and normally should, be vigorously contested. There is no limit on the number of extensions that can be granted but the total duration of the freezing. Must not extend beyond two years of the account freezing order being granted.

An application for forfeiture of frozen funds can be made to the court at any point during the freezing order duration. Forfeiture is the process by which the funds are permanently seized and transferred to the state. Any forfeiture application must be made within two years of the account freezing order being put in place.

Under section 303Z4 of the Proceeds of Crime Act 2002 an Account Freezing Order can be either varied or set aside. An application for discharge of the order can be a very powerful tool in the defence of such an application as it would the funds being returned to the account holder. A discharge application can be made on a number of grounds and it is not possible to outline them all in this article however, commonly used arguments can be:

• that there has been disclosure failings in the application for the order
• there is an error in the order
• that the order does not fulfil the statutory test
• that the order is not proportionate
• that the order is an abuse of the process of the court
• that there has been a change in circumstances from when the order has being made that means that the order is no longer necessary or justified

It is often important to seek specialist legal advice before making such an application, as it will be a matter of tactics as to when, how and why to make such an application.

There is provision for legal costs to be met out of frozen funds and an application to the court can be made for this to take place, this would be under section 303Z5 of the Proceeds of Crime Act 2002. Such an application can be complicated in nature and again, it may be worth seeking specialist legal advice if you are considering making such an application.