A UK bank account containing more than £1 million had been subject to an Account Freezing Order for an extended period while a police investigation remained ongoing. The account holder, an international client with business interests in several jurisdictions, had attempted to obtain an explanation and provide supporting evidence directly to the investigating authorities but was unable to make meaningful progress.
IMD Corporate was instructed shortly before the existing freezing order was due to expire. By obtaining the court documents, analysing the source of funds, reviewing evidence from Poland and other jurisdictions, and engaging directly with the investigating police force, IMD Corporate helped establish that there were no longer grounds for the funds to remain frozen.
Following that work, the police applied to the Magistrates’ Court for the Account Freezing Order to be set aside. The application was heard within approximately one week, the order was discharged and more than £1 million was subsequently released.
What is an Account Freezing Order?
An Account Freezing Order, commonly referred to as an AFO, is a civil asset recovery measure available under Part 5 of the Proceeds of Crime Act 2002 (POCA).
An enforcement officer can apply for an order where there are reasonable grounds for suspecting that money held in an account is recoverable property or is intended for use in unlawful conduct. In England and Wales, these applications are made to the Magistrates’ Court. An application may also be made without notice where giving advance notice could prejudice potential forfeiture action.
Importantly, an Account Freezing Order does not itself mean that the account holder has committed a criminal offence, nor does it automatically result in the money being forfeited. It prevents withdrawals or payments while the authorities investigate the funds and decide whether further action should be taken.
An AFO may remain in force for a period specified by the court, subject to a statutory maximum of two years from the date on which the order was made. The court also has power to vary or set aside the order.
More Than £1 Million Frozen Without the Client Having the Court Documents
The client maintained banking arrangements in several jurisdictions as part of wider international business interests. More than £1 million had been held in a UK account and was not being actively used.
The client discovered the restriction after checking the UK account. Before that point, the client had not received the sealed order or the underlying application explaining why the funds had been frozen.
This was particularly significant because the order itself does not necessarily contain the full factual basis relied upon by the investigating authority. Understanding the case therefore required access to the original application and supporting material placed before the Magistrates’ Court.
The legislation also requires an Account Freezing Order to make provision for notice to persons affected by it. However, questions concerning notice must be considered alongside the circumstances in which the original application was made, including the ability of enforcement authorities to apply without notice.
Attempts to Resolve the Frozen Bank Account Directly with the Police
Before instructing IMD Corporate, the client spent several months communicating directly with the investigator responsible for the matter.
Documents were supplied and explanations were given concerning the funds and the client’s international business activities. Despite these efforts, the position did not change. The client was repeatedly informed that the investigation remained ongoing and that further information would be provided when available.
For an individual or business facing a frozen bank account in the UK, this can create considerable uncertainty. Where substantial funds are involved, simply sending documents to an investigator may not be sufficient. The evidence needs to address the specific concerns underlying the Account Freezing Order.
IMD Corporate’s Review of the Account Freezing Order
Once instructed, IMD Corporate first carried out a detailed review of the documents and information available from the client.
IMD Corporate then contacted the police and the court to obtain information that had not previously been provided, including the documents connected with the original application.
The matter required significant cross-border analysis. The client had international business interests, including corporate shareholdings in Poland, meaning that evidence concerning ownership, transactions and the legitimate source of funds had to be understood within the context of another legal and commercial system.
IMD Corporate reviewed relevant Polish registers and supporting documents and was able to assess material in its original language. This was important because overseas corporate documents can be difficult to interpret correctly without understanding both the language and the legal context in which they were produced.
A detailed witness statement was prepared based on the documentary evidence, information provided by the client, and information obtained from the relevant official registers. That evidence was provided directly to the investigating police force.
This marked a significant change in the progress of the matter. Rather than individual documents being supplied without a structured legal explanation, the police were presented with evidence addressing the history, ownership and commercial background of the funds.
Obtaining and Analysing the Police Application
IMD Corporate also obtained the court documents connected with the freezing order.
This was a critical step. Under POCA, the Magistrates’ Court considers whether there are reasonable grounds for suspecting that the money represents recoverable property or is intended for use in unlawful conduct. Understanding precisely what had been alleged or suspected was therefore necessary before those concerns could be answered properly.
In this particular matter, the authorities had previously sought continuation of the freezing arrangements. By the time IMD Corporate became involved, the existing period was approaching expiry. The legal team therefore had a limited period in which to obtain the relevant material, analyse the police position, assemble the cross-border evidence and communicate effectively with the investigating officers.
Account Freezing Order Set Aside and Funds Released
Following IMD Corporate’s engagement with the police and presentation of the supporting evidence, the investigating authority concluded that there were no longer grounds to maintain the restriction.
Under section 303Z4 of POCA, an enforcement officer or a person affected by an Account Freezing Order may apply to the relevant court for the order to be varied or set aside. In this matter, the police themselves applied to the Magistrates’ Court for the order to be set aside.
The application was filed, a hearing was listed within approximately one week and the Magistrates’ Court made an order bringing the freezing order to an end. The police also notified the bank. Given that more than £1 million was involved, the bank then had to complete its own internal compliance and authorisation procedures before access to the money could be restored.
The funds were ultimately released.
Practical key points for Businesses and Individuals with Frozen UK Bank Accounts
An Account Freezing Order can place substantial assets beyond an account holder’s control while an investigation continues. Early legal analysis is therefore important.
The first priority is usually to establish exactly why the bank account has been frozen. This may require obtaining the original application, court order and supporting information rather than relying only on correspondence with the investigating officer.
Where funds originate from international businesses, investments or shareholdings, evidence of the source of funds and source of wealth should also be presented in a structured and legally relevant way. Overseas company registers, transaction records, corporate documents and supporting explanations may be central to demonstrating the legitimate background of the money.
Cross-border matters can require more than translation. They often require an understanding of how foreign corporate records and business structures should be interpreted in the context of UK proceedings.
The legislation gives the Magistrates’ Court power to vary or set aside an Account Freezing Order at any time upon an appropriate application. It also provides a possible route to compensation in exceptional circumstances where an AFO was made but the money was not ultimately forfeited and the affected person suffered loss.
For businesses, investors and individuals facing an Account Freezing Order, frozen UK bank account or POCA investigation, obtaining the underlying court documents and addressing the authorities’ concerns with clear evidence can be decisive.
IMD Corporate advises clients on complex commercial disputes, asset-related proceedings and cross-border matters involving businesses and individuals with international interests.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.
