City of London Police seize more than £2 million in cross-border money laundering operation
Since their introduction AFrOs and AFoOs have been used by a range of different law enforcement agencies, from the Serious Fraud Office and National Crime Agency to police forces around the country. Recoveries made under these orders have run into the millions – see our related blogs.
The Criminal Finances Act 2017 inserted new sections into Part 5 of the Proceeds of Crime Act 2002. This allows for the freezing and subsequent forfeiture of funds held in bank and building society accounts. It is a two stage process.
First, a senior officer or officer authorised by a senior officer can apply to a magistrates’ court for an Account Freezing Order where there are reasonable grounds to suspect that the account contains the proceeds of crime or is intended for use in unlawful conduct. Subsequently, having investigated, the law enforcement agency may then apply for a Forfeiture Order. If the magistrates’ court is satisfied that the funds in the account represent the proceeds of crime or are intended for use in unlawful conduct, it will grant a Forfeiture Order. The standard of proof is the balance of probabilities and there is no requirement for a criminal conviction to have been obtained against any party.
A report from September 2020 confirms that for the period 2019/20, £208m covering 812 bank and building society accounts, was frozen using AFrOs. It also confirmed that just over £69m was collected through forfeitures in 2019/20. The current level of forfeiture represents the highest level seen in the time frame of the report - 2014/15 to 2019/20.
The key to the widespread use, and success, of the Asset Freezing and Forfeiture process (set out above) is its simplicity. In practice the threshold to meet is low and such orders are routinely granted.
Law enforcement agencies have an additional interest in the process, under a scheme known as the Asset Recovery Incentivisation Scheme - (ARIS), where a proportion of funds recovered under the Proceeds of Crime Act 2002 (POCA) are returned to law enforcement partners to invest in future asset recovery work, crime reduction schemes and community projects.
Where, during this current coronavirus crisis, the police and court system facing unprecedented challenges, law enforcement remains active in its asset denial enforcement work and relentless in seeking to tackle illicit finance.
For further information on the issues raised in this blog post, please contact a member of our Proceeds of Crime and Money Laundering team.
Jonathan Grimes is a Partner in the Criminal Litigation Department who specialises in serious and complex criminal cases. He represents individuals and organisations in all areas of financial services and business crime as well as health and safety and related areas. He has acted in numerous cases involving allegations of financial wrongdoing and has experience of investigations by SFO, FCA, HMRC, CMA, NCA and the police as well as a number of foreign investigative authorities. He has particular expertise dealing with law enforcement applications that seek to freeze or seize assets, including Account Freezing Orders and other applications made under the Proceeds of Crime Act (POCA). He frequently gives advice on money laundering issues including on the making of suspicious activity reports (SARs).
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