The NCA Flexes Its Muscles With Account Freezing Orders

Author:Ms Anna Gaudoin
Profession:WilmerHale
 
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On 7 February 2019, the UK National Crime Agency ("NCA") announced that it had, for the first time, successfully used its powers of account freezing orders ("AFOs") to forfeit over £400,000 from three UK bank accounts suspected of harbouring dirty money. Three weeks later, the National Economic Crime Centre ("NECC") indicated its intention to use AFOs to apply to freeze a further 95 accounts suspected of being funded by laundered money.

AFOs allow the NCA and Serious Fraud Office ("SFO") to apply to freeze, and subsequently forfeit, funds held in bank accounts and building societies. The power to apply for an AFO was granted by the Criminal Finances Act 2017 ("CFA 2017"), which also introduced the offence of failure to prevent facilitation of tax evasion and Unexplained Wealth Orders ("UWOs"). Amid the fanfare of the failure to prevent offence and UWOs, AFOs have flown somewhat under the radar. However, they could prove to be a powerful tool for the NCA, providing an easy route to the recovery of criminal funds.

How do AFOs work?

Section 16 of the CFA 2017 came into force on 31 January last year. It inserted new provisions into Part 5 of the Proceeds of Crime Act 2002 ("POCA 2002"), expanding law enforcement agencies' powers of civil recovery of the proceeds of crime. Under section 303Z1 of POCA 2002, an enforcement officer may apply to the Magistrates' Court for an AFO if that officer has reasonable grounds to suspect that money held in that account constitutes "recoverable property"1 or is intended for use in unlawful conduct. This is a fairly low bar, weighted heavily in favour of the applicant authority.

Once an AFO has been granted there are two methods of forfeiture. Firstly, an enforcement officer may issue an "account forfeiture notice", which operates to forfeit all or part of the funds in a frozen account.2 If no objection to such a notice is received, the balance of funds in the frozen account must be transferred to a nominated account at the end of the objection period. Alternatively, an application may be made to the Magistrates' Court for forfeiture of money in an account subject to an AFO.3 The threshold for forfeiture is higher than for the initial grant of an AFO; rather than merely needing "reasonable grounds for suspicion", the officer or the Court must be satisfied that the funds are either recoverable property or are intended for use in unlawful conduct. This must be proved on the balance of probabilities - the civil...

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