Account Freezing Orders: The Guilt-Free Way to an End

The National Crime Agency was no doubt happy to announce it had reached an out-of-court settlement with billionaire property tycoon and philanthropist Malik Riaz Hussain that sees him handing over a lb50M house overlooking Hyde Park and lb140M that's locked in frozen accounts.

It is the NCA's largest asset recovery and, as it is a settlement, there is no finding of guilt against Hussain or his relatives; even though the surrendering of assets does a minimum of indicate they felt they could not defend the allegations.

Hussain's firm had been the subject of investigations into corruption and land-grabbing and the settlement will see the lb190M passed towards the government of Pakistan, that has welcomed the outcome.

The causes of the NCA's contentment with the settlement appear fairly clear. Why was Hussain prepared to settle? Arguably due to three little words-account freezing orders.

In August 2021, eight account freezing orders were secured by the NCA at Westminster Magistrates' Court in connection with funds totalling around lb120 million. These followed a merchant account freezing order in December 2021 for lb20 million. All of the account freezing orders related to Hussain's money locked in UK bank accounts and were obtained for the reason the money may have been acquired illegally. Confronted with such a situation, it could be argued that Hussain had little room for manoeuvre in this instance. That, so far as enforcement agencies are concerned, is the great thing about account freezing orders.

Account freezing orders give enforcement agencies the way to concentrate on the assets of the corporate or individual without needing to establish guilt. Introduced under Section 16 of the Criminal Finances Act 2021 , they enable the items in bank and building society accounts to become frozen so that they can be forfeited in exactly exactly the same way as cash can be. For the authorities, the account freezing order is ideal. In a world where those suspected of criminal activity are less and less likely to carry their wealth as cash, a merchant account freezing order enables wealth in accounts to become targeted effectively and efficiently. Any account with a balance of lb1,000 or even more could possibly be the subject of an account freezing order – a low threshold that makes this kind of order a very versatile tool for investigators.

If investigators have reasonable grounds to suspect those funds held in an account is either property obtained through unlawful conduct or intended by person to be used in unlawful conduct they are able to apply to magistrates to have an order. An application for just one can be created without notice – meaning the topic of one will not learn about it until it's been granted. This arguably gives the authorities a jump over those they investigate. But they can be successfully challenged: there is a whole process and machinery in place for the target of these an order to obtain their day in court and argue their case.

It is hardly surprising that such orders have become ever more popular with the powers that be – or that Hussain felt compelled to achieve a settlement using the NCA. It's worth noting that whenever you are looking at the settlement there is no mention of allegations against Hussain according from the recovery. He is able to take consolation for the reason that.

The use of account freezing orders is hugely advantageous for enforcement agencies, as this case indicates. But as Hussain walks away without any guilt attached to him, it could also be said that account freezing orders give scope for all those investigated to respond appropriately, make strong representations and negotiate intelligently in order to secure an outcome that suits them.

While the lb50M property in this case could simply be seized via civil recovery powers that were introduced under the Proceeds of Crime Act 2002, this case implies that the CFA is unquestionably beginning to bite. The CFA introduced both account freezing orders and unexplained wealth orders – that have attracted their own media coverage – which are now a part of progressively more cases.