SFO secures “largest seizures of its kind” using new asset forfeiture powers
Chambers and Partners, 2019
Tackling illicit finance and the proceeds of crime is a government priority and law enforcement focus.
For some time now the police and other law enforcement agencies have had the power to seize cash from individuals on the mere suspicion that it may derive from an unlawful source. Unless a court is satisfied that the cash has a legitimate origin, it will be forfeited despite in many cases no wrongdoing having been proved.
More recently, these powers of seizure and forfeiture have been adapted and extended to cover bank and building society account balances. This development means that far more people are likely to face the prospect of significant financial loss without ever being investigated for, or charged with, a criminal offence. Even if the money in question is not ultimately forfeited, the disruption caused by loss of access to funds can be significant and in some cases catastrophic.
The freezing, and subsequent forfeiture, of bank and building society accounts can be sought if the balance exceeds £1000 and is suspected to be “recoverable property” (that it represents to proceeds of criminal conduct – anywhere in the world) or is intended by any person for use in unlawful conduct. The account(s) in question can be frozen for up to two years if the relevant authority can satisfy a Magistrates Court that there are reasonable grounds for the suspicion (a very low threshold).
Where these powers are exercised in respect of cash, law enforcement must apply to the Magistrates Court (within 48 hours of seizing the cash) for permission to detain it, for up to two years. The same reasonable grounds for suspicion test is applied.
At the conclusion of, or indeed at any point during, the period of detention (when dealing with cash) or freezing (in the case of bank or building society accounts), the authorities may apply for the relevant sums to be forfeited. The relevant authority must satisfy the court that the money held in the frozen account is in fact recoverable property or intended for use in unlawful conduct. This is a higher bar for the authorities than demonstrating their reasonable grounds for a suspicion, but nevertheless the courts routinely make forfeiture orders. Cash or balances ordered to be forfeit are transferred to a nominated enforcement account, then to the Treasury and invested in public projects.
The law allows those from whom cash has been seized or whose account has been frozen to apply to the court for the detention or freezing order to be set aside. Deciding when and how to make such a challenge is a delicate judgement call: the burden of proof is on the applicant and even though the civil standard – the balance of probabilities – applies, in practice it is necessary to demonstrate with compelling evidence the “clean” origins of the cash or balances. In the event of forfeiture, there is an automatic right of appeal (to the Crown Court) where, again, a compelling case must be presented.
Our team of specialist forfeiture lawyers can advise individuals and corporates on the following:
For more information please contact our specialist account freezing and forfeiture solicitors.
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