The Criminal Finances Act 2017 provided UK law enforcement with an array of new powers designed to make it easier to freeze and forfeit property held in the UK that is alleged to have been obtained from criminal conduct committed overseas. These powers are often used to target UK property that is allegedly the fruit of foreign corruption.

The Act calls property obtained by crime “recoverable property”. An Account Freezing Order, a precursor to an Asset Forfeiture Order, concerns one type of recoverable property; a credit balance held in a UK bank account. If there is a reasonable suspicion that the balance is recoverable property any magistrates’ court can order it to be frozen for up to two years. If the court is later satisfied that the funds were obtained by or via unlawful conduct, then it can order the forfeiture of the entire balance.

These orders are intended to be used by law enforcement to forfeit large sums of money without needing to prosecute anyone and prove their guilt to the criminal standard of proof. They are therefore relatively easy for UK authorities to obtain and require a careful strategy in order to oppose and defeat them.

Corker Binning has substantial experience in successfully opposing applications for the freezing and forfeiture of this type of money. Grounds for opposition have included:

(a) A lack of proof that the credit balance is the proceeds of any unlawful conduct;

(b) A lack of proof that the credit balance was intended for use in unlawful conduct;

(c) Even if the money is likely to be the proceeds of crime it is not recoverable because its owner obtained it in good faith and without suspicion as to its provenance;

(d) A forfeiture order would be disproportionate and offend the European Convention on Human Rights.

The National Crime Agency is advertising the availability of these orders to its foreign counterparts. This firm has advised non-UK clients who have been targeted by this type of order.

• Advising two Russian nationals on an application by the Metropolitan Police Service (MPS) for forfeiture of approximately £13m held in multiple UK bank accounts – the MPS withdrew the application following service of detailed expert and witness evidence and agreed to pay a substantial sum of money in lieu of our clients’ legal costs;
• Advising a Pakistani national on an application by the National Crime Agency (NCA) for account freezing orders over significant funds held in UK bank accounts;
• Persuading HMRC and the NCA to withdraw account freezing orders in relation to a legitimate Zimbabwean cash transfer business.