Further to their recent success in Magistrates’ Court, members of the financial crime team summarise the changes to the Criminal Finances Act 2017 (CFA).
Criminal Finances Act
Section 16 of the Criminal Finances Act has the effect of amending Part 5 of the Proceeds of Crime Act 2002 (POCA), by adding in sections 303Z1 – 303Z1, and thereby introducing the interim injunction in question, Account Freezing Orders, as well as Account Forfeiture Orders.
Account Freezing Orders (AFOs)
As the names suggests, an AFO is an interim injunction that freezes a bank or building society account, and in doing so, prevents a party from dissipating their assets for a certain amount of time. In this case, 6 months for each account (the maximum period being two years at which point an AFO will expire).
Account Forfeiture Orders
Account Forfeiture Orders, meanwhile, allow for the actual transfer of monies from the forfeited account. Although it is not necessarily the case that Account Forfeiture Orders always follow AFOs.
The purpose of an AFO
An AFO preserves the value of the respondent’s assets until a judgment can be enforced.
This interim injunction, which was first successfully granted in early 2019, was conceived as a way for law enforcement agencies to catch up with the modern world as, for a long time prior, many criminals had no longer dealt with hard cash, choosing instead to keep their ill-gotten gains in bank and building society accounts.
However, whilst ameliorating perceived shortcomings in the police’s ability to tackle economic crime, the straightforward nature of the application (usually made on an ex parte basis) coupled with low bar for granting (the minimum amount for which an AFO can be sought being just £1000, and the grounds for suspecting being on the ‘balance of probabilities,’ not ‘beyond reasonable doubt’ – i.e., the civil test) means some have viewed this remedy as a touch draconian, suggesting instead that a more rigorous approach should be applied to what the police might consider to be ‘recoverable property’ obtained through ‘unlawful conduct’.
Unsurprisingly, AFOs have often been granted, and have proven a popular remedy for law enforcement agencies (with an Application for an Account Forfeiture Order often in tow), allowing them as it does the ability to disrupt the flow of funds without requiring a prosecution or a criminal conviction.
Frances Murray, and the rest of the financial crime team, have a wealth of experience providing representation for individuals, limited companies and PLCs from the investigatory stages of a case, up to court proceedings, and are uniquely place to support clients, in particular, high (and ultra-high) net worth individuals and senior management of multi-national companies in a variety of sectors, that are the subject of Account Freezing Orders or Unexplained Wealth Orders.