Freezing and forfeiture of money held in bank and building society accounts
31. After article 213W (interpretation) (which is inserted by article 30 of this Order (forfeiture of certain personal (or moveable) property)), insert—
“Part 5BGiving effect in England and Wales and Scotland to external requests and orders by means of the freezing and forfeiture of money held in bank and building society accounts
Chapter 1Introduction
General
213X.—(1) This Part has effect for the purpose of enabling the freezing and forfeiture of money held in bank and building society accounts (within the meaning of article 213Z1(6)) in civil proceedings before—
(a)in England and Wales, the magistrates’ court; or
(b)in Scotland, the Sheriff’s Court,
for the purpose of giving effect to external requests and external orders.
(2) The powers conferred by this Part are exercisable in relation to money held in an account maintained with a bank or building society whether or not proceedings have been brought in the country from which the external order was sent for criminal conduct (within the meaning of section 447(8) of the Act (interpretation)) in connection with the property.
(3) For the purposes of this Part the amount of any money held in an account maintained with a bank or building society in a currency other than sterling must be taken to be its sterling equivalent, calculated in accordance with the prevailing rate of exchange.
Action on receipt of an external request
213Y. The Secretary of State may refer an external request to prohibit dealing with money held in an account maintained with a bank or building society to—
(a)the Chief Constable of a police force in England and Wales or the Chief Constable of the Police Service of Scotland;
(b)the Commissioners for Her Majesty’s Revenue and Customs;
(c)the Director of the Serious Fraud Office;
(d)the Director of the National Crime Agency.
Action to give effect to an external order
213Z. The Secretary of State may forward an external order in relation to money held in an account maintained with a bank or building society to—
(a)the Chief Constable of a police force in England and Wales or the Chief Constable of the Police Service of Scotland;
(b)the Commissioners for Her Majesty’s Revenue and Customs;
(c)the Director of the Serious Fraud Office;
(d)the Director of the National Crime Agency.
Chapter 2Freezing and Forfeiture of Money Held in Bank and Building Society Accounts
Application for account freezing order
213Z1.—(1) This article applies if—
(a)the Secretary of State has referred an external request or an external order to an enforcement officer in accordance with articles 213Y (action on receipt of an external request) or 213Z (action to give effect to an external order), and
(b)the enforcement officer has reasonable grounds for suspecting that money held in the account specified in that external order is recoverable property.
(2) Where this article applies (but subject to article 213Z2) (restrictions on making of application under article 213Z1) the enforcement officer may apply to the relevant court for an account freezing order in relation to the account in which the money is held.
(3) For the purposes of this Part—
(a)an account freezing order is an order that, subject to any exclusions (see article 213Z5 (exclusions)), prohibits each person by or for whom the account to which the order applies is operated from making withdrawals or payments from the account;
(b)an account is operated by or for a person if the person is an account holder or a signatory or identified as a beneficiary in relation to the account.
(4) An application for an account freezing order may be made without notice if the circumstances of the case are such that notice of the application would prejudice the taking of any steps under this Part to forfeit money that is recoverable property.
(5) The money referred to in paragraph (1) may be all or part of the credit balance of the account.
(6) In this Part—
“bank” has the same meaning as in section 303Z7 of the Act(1);
“building society” has the same meaning as in the Building Societies Act 1986(2);
“enforcement officer” means—
an officer of Revenue and Customs,
a constable, or
an SFO officer;
“the minimum amount” is the sum for the time being specified in section 303Z8 of the Act(3);
“relevant court”—
in England and Wales, means a magistrates’ court,
in Scotland, means the sheriff.
Restrictions on making of application under article 213Z1
213Z2.—(1) The power to apply for an account freezing order is not exercisable if the money in relation to which the enforcement officer’s suspicion exists is less in amount than the minimum amount.
(2) An enforcement officer may not apply for an account freezing order unless the officer is a senior officer or is authorised to do so by a senior officer.
(3) The power to apply for an account freezing order is not exercisable by an SFO officer in relation to an account maintained with a branch of a bank or building society that is in Scotland.
(4) For the purposes of this Part, a “senior officer” is—
(a)an officer of Revenue and Customs of a rank designated by the Commissioners for Her Majesty’s Revenue and Customs as equivalent to that of a senior police officer,
(b)a senior police officer,
(c)the Director of the Serious Fraud Office, or
(d)the Director General of the National Crime Agency or any other National Crime Agency officer authorised by the Director General (whether generally or specifically) for this purpose.
(5) In paragraph (4), a “senior police officer” means a police officer of at least the rank of inspector.
Making of account freezing order
213Z3.—(1) This article applies where an application for an account freezing order is made under article 213Z1 (application for account freezing order) in relation to an account.
(2) The relevant court may make the order if satisfied that there are reasonable grounds for suspecting that money held in the account (whether all or part of the credit balance of the account is recoverable property.
(3) An account freezing order ceases to have effect at the end of the period specified in the order (which may be varied under article 213Z4 (variation and setting aside of account freezing order)) unless it ceases to have effect at an earlier or later time in accordance with the provision made by articles 213Z7(8) to (10) (forfeiture order) and 213Z8 (continuation of account freezing order pending appeal).
(4) The period specified by the relevant court for the purposes of paragraph (3) (whether when the order is first made or on a variation under article 213Z4) may not exceed the period of 2 years, starting with the day on which the account freezing order is (or was) made.
(5) An account freezing order must provide for notice to be given to persons affected by the order.
Variation and setting aside of account freezing order
213Z4.—(1) The relevant court may at any time vary or set aside an account freezing order on an application made by—
(a)an enforcement officer, or
(b)any person affected by the order.
(2) But an enforcement officer may not make an application under paragraph (1) unless the officer is a senior officer or is authorised to do so by a senior officer.
(3) Before varying or setting aside an account freezing order the court must (as well as giving the parties to the proceedings an opportunity to be heard) give such an opportunity to any person who may be affected by its decision.
(4) In relation to Scotland, the references in this article to setting aside an order are to be read as references to recalling it.
Exclusions
213Z5.—(1) The power to vary an account freezing order includes (amongst other things) power to make exclusions from the prohibition on making withdrawals or payments from the account to which the order applies.
(2) Exclusions from the prohibition may also be made when the order is made.
(3) An exclusion may (amongst other things) make provision for the purpose of enabling a person by or for whom the account is operated—
(a)to meet the person’s reasonable living expenses, or
(b)to carry on any trade, business, profession or occupation.
(4) An exclusion may be made subject to conditions.
(5) Where a magistrates’ court exercises the power to make an exclusion for the purpose of enabling a person to meet legal expenses that the person has incurred, or may incur, in respect of proceedings under this Part, it must ensure that the exclusion—
(a)is limited to reasonable legal expenses that the person has reasonably incurred or that the person reasonably incurs,
(b)specifies the total amount that may be released for legal expenses in pursuance of the exclusion, and
(c)is made subject to the same conditions as would be the required conditions (see section 286A of the Act) (legal expenses excluded from freezing: required conditions) if the order had been made under section 245A of the Act (application for property freezing order) (in addition to any conditions imposed under paragraph (4)).
(6) A magistrates’ court, in deciding whether to make an exclusion for the purpose of enabling a person to meet legal expenses in respect of proceedings under this Part—
(a)must have regard to the desirability of the person being represented in any proceedings under this Part in which the person is a participant, and
(b)must disregard the possibility that legal representation of the person in any such proceedings might, were an exclusion not made, be made available under arrangements made for the purposes of Part 1 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
(7) The sheriff’s power to make exclusions may not be exercised for the purpose of enabling any person to meet any legal expenses in respect of proceedings under this Part.
(8) The power to make exclusions must, subject to paragraph (6), be exercised with a view to ensuring, so far as practicable, that there is not undue prejudice to the taking of any steps under this Part to forfeit money that is recoverable property.
Restriction on proceedings and remedies
213Z6.—(1) If a court in which proceedings are pending in respect of an account maintained with a bank or building society is satisfied that an account freezing order has been applied for or made in respect of the account, it may either stay the proceedings or allow them to continue on any terms it thinks fit.
(2) Before exercising the power conferred by paragraph (1), the court must (as well as giving the parties to any of the proceedings concerned an opportunity to be heard) give an opportunity to any person who may be affected by its decision to be heard.
(3) In relation to Scotland, the reference in paragraph (1) to staying the proceedings is to be read as a reference to sisting the proceedings.
Forfeiture order
213Z7.—(1) This article applies while an account freezing order has effect.
(2) In this article the account to which the account freezing order applies is “the frozen account”.
(3) An application for the forfeiture of money held in the frozen account (whether all or part of the credit balance of the account) may be made—
(a)to a magistrates’ court by a person specified in paragraph (4), or
(b)to the sheriff by the Scottish Ministers.
(4) The persons referred to in paragraph (3)(a) are—
(a)the Commissioners for Her Majesty’s Revenue and Customs,
(b)a constable, or
(c)an SFO officer.
(5) An application under paragraph (3) may only be made for the purpose of giving effect to an external order which is for the recovery of a specified sum of money in the frozen account.
(6) The court or sheriff may order the forfeiture of the money or any part of it if satisfied that the money referred to in paragraph (5) or part is recoverable property.
(7) But in the case of recoverable property which belongs to joint tenants, one of whom is an excepted joint owner, an order by a magistrates’ court may not apply to so much of it as the court thinks is attributable to the excepted joint owner’s share.
(8) Where an application is made under paragraph (3), the account freezing order is to continue to have effect until the time referred to in paragraph (9)(b) or (10).
(9) Where money held in a frozen account is ordered to be forfeited under paragraph (6)—
(a)the bank or building society with which the frozen account is maintained must transfer that amount of money into an interest-bearing account nominated by an enforcement officer, and
(b)immediately after the transfer has been made the account freezing order made in relation to the frozen account ceases to have effect.
(10) Where, other than by the making of an order under paragraph (6), an application under paragraph (3) is determined or otherwise disposed of, the account freezing order ceases to have effect immediately after that determination or other disposal.
(11) Paragraphs (9)(b) and (10) are subject to article 213Z8 (continuation of account freezing order pending appeal).
Continuation of account freezing order pending appeal
213Z8.—(1) This article applies where, on an application under paragraph (3) of article 213Z7(forfeiture order) in relation to an account to which an account freezing order applies, the court or sheriff decides—
(a)to make an order under paragraph (6) of that article in relation to part only of the money to which the application related, or
(b)not to make an order under paragraph (6) of that article.
(2) The person who made the application under article 213Z7(3) may apply without notice to the court or sheriff that made the decision referred to in paragraph (1)(a) or (b) for an order that the account freezing order is to continue to have effect.
(3) Where the court or sheriff makes an order under paragraph (2) the account freezing order is to continue to have effect until—
(a)the end of the period of 7 days starting with the making of the order under paragraph (2), or
(b)if within that period of 7 days an appeal is brought under article 213Z9 (appeal against decision under article 213Z7) against the decision referred to in paragraph (1)(a) or (b), the time when the appeal is determined or otherwise disposed of.
(4) In calculating a period of days for the purposes of this article no account is to be taken of—
(a)any Saturday or Sunday,
(b)Christmas Day,
(c)Good Friday, or
(d)any day that is a bank holiday under the Banking and Financial Dealings Act 1971 in the part of the United Kingdom in which the account freezing order was made.
Appeal against decision under article 213Z7
213Z9.—(1) Any party to proceedings for an order for the forfeiture of money under article 213Z7 (forfeiture order) who is aggrieved by an order under that article or by the decision of the court not to make such an order may appeal—
(a)from an order or decision of a magistrates’ court in England and Wales, to the Crown Court;
(b)from an order or decision of the sheriff, to the Sheriff Appeal Court.
(2) An appeal under paragraph (1) must be made before the end of the period of 30 days starting with the day on which the court makes the order or decision.
(3) The court hearing the appeal may make any order it thinks appropriate.
(4) If the court upholds an appeal against an order forfeiting the money, it may order the release of the whole or any part of the money.
(5) Where money is released by virtue of paragraph (4), there must be added to the money on its release any interest accrued on it whilst in the account referred to in article 213Z7(9)(a) (forfeiture order).
Application of money forfeited under account forfeiture order
213Z10.—(1) Money forfeited by an order under article 213Z7 (forfeiture order), and any interest accrued on it whilst in the account referred to in paragraph of that article is to be applied in payment of the amount payable under the external order.
(2) But it is not to be paid in—
(a)before the end of the period within which an appeal under article 213Z9 (appeal against decision under article 213Z7) may be made, or
(b)if a person appeals under that article, before the appeal is determined or otherwise disposed of.
Compensation
213Z11.—(1) This article applies if—
(a)an account freezing order is made, and
(b)none of the money held in the account to which the order applies is forfeited in pursuance of an order under article 213Z7 (forfeiture order).
(2) Where this article applies a person by or for whom the account to which the account freezing order applies is operated may make an application to the relevant court for compensation.
(3) If the relevant court is satisfied that the applicant has suffered loss as a result of the making of the account freezing order and that the circumstances are exceptional, the relevant court may order compensation to be paid to the applicant.
(4) The amount of compensation to be paid is the amount the relevant court thinks reasonable, having regard to the loss suffered and any other relevant circumstances.
(5) If the account freezing order was applied for by an officer of Revenue and Customs, the compensation is to be paid by the Commissioners for Her Majesty’s Revenue and Customs.
(6) If the account freezing order was applied for by a constable, the compensation is to be paid as follows—
(a)in the case of a constable of a police force in England and Wales, it is to be paid out of the police fund from which the expenses of the police force are met;
(b)in the case of a constable of the Police Service of Scotland, it is to be paid by the Scottish Police Authority.
(7) If the account freezing order was applied for by an SFO officer, the compensation is to be paid by the Director of the Serious Fraud Office.
(8) If the account freezing order was applied for by a National Crime Agency officer, the compensation is to be paid by the National Crime Agency.
Powers for prosecutors to appear in proceedings
213Z12.—(1) The Director of Public Prosecutions may appear for a constable in proceedings under this Part if the Director—
(a)is asked by, or on behalf of, a constable to do so, and
(b)considers it appropriate to do so.
(2) The Director of Public Prosecutions may appear for the Commissioners for Her Majesty’s Revenue and Customs or an officer of Revenue and Customs in proceedings under this Part if the Director—
(a)is asked by, or on behalf of, the Commissioners for Her Majesty’s Revenue and Customs or (as the case may be) an officer of Revenue and Customs to do so, and
(b)considers it appropriate to do so.
(3) The Directors may charge fees for the provision of services under this article.
Interpretation
213Z13. In this Part—
“account forfeiture order” means an order made under article 213Z7(6) (forfeiture order) for the forfeiture of money in a bank or building society account;
“account freezing order” has the meaning given in article 213Z1(3)(a) (application for account freezing order);
“bank” has the meaning given in article 213Z1(6);
“building society” has the meaning given in article 213Z1(6);
“enforcement officer” has the meaning given in article 213Z1(6);
“excepted joint owner” has the meaning given by article 181(4) (associated and joint property);
“the minimum amount” has the meaning given by article 213Z1(6);
“recoverable property” is to be read in accordance with articles 202 to 207 (recoverable property);
“relevant court” has the meaning given in article 213Z1(6);
“share”, in relation to an excepted joint owner, has the meaning given by article 181(4).”.
Section 303Z7 was inserted by section 16 of the Criminal Finances Act 2017.
Section 303Z8 was inserted by section 16 of the Criminal Finances Act 2017.