As the Government continues to crackdown on illegal financial activity, the use of restraint orders is increasing. Restraint orders are usually served against those who are under investigation for serious financial crime offences such as fraud or money laundering, or other offences such as drug trafficking.
A restraint order may be sought during the initial stages of an investigation or ahead of a criminal trial, and can be requested by HMRC, the police or other law enforcement. Any third parties who may or may not be involved in the financial crime being investigated may also find their property and assets frozen as a result of the restraint order. The freezing process is useful to prosecutors as it preserves any assets that may be subjected to confiscation.
What is a restraint order?
A restraint order is an order that freezes an individual's assets while a criminal investigation into their financial activity takes place. The frozen assets can then be confiscated at a later time if required. Authorities such as the police and HMRC can seek to enforce a restraining order without notice. Once in place, assets are usually frozen for several years, causing major personal and commercial disruption to the individuals concerned and their families. Payments that leave frozen bank accounts will not be able to be made, and financial commitments like mortgages and bills may suffer as a result.
If you do not comply with a restraint order, this is seen as a contempt of court or, in extreme cases, may be seen as perverting the course of justice. If either of these is successfully proven, either offence carries a prison term.
My assets have been frozen - what should I do?
Under Section 37 of the Senior Courts Act 1981, a court or authority can obtain a freezing order if it believes that it has reasonable grounds for doing so. Usually, several conditions must be met for the order to be enforced, such as a suspicion that funds will be disposed of before a trial, or that the applicant for the order has a strong case. If your assets have been frozen, you will have been prevented from accessing or using them. This will typically happen before a court case or investigation into your financial affairs.
The consequences of such financial restriction will prove a great challenge for you and other people affected. Your bank now has to prevent you from accessing or making transactions through your frozen account. All standing orders will be cancelled and everyday banking will be suspended. You will therefore need to make arrangements to ensure that your direct debits and bills are still paid on time. Depending on your situation, you might be allowed to withdraw a certain amount every month from your account in cash, but this will likely be a small amount. You'll be required to disclose to the authorities all details of your income and assets, including any that may be linked to financial crime.
You must understand the terms of your restraint order so that you do not face additional charges for contempt of court, and will need to seek the guidance of a solicitor. Even if you accidentally breach your order, you must obtain legal advice from a professional.
If you have a trial and you are found guilty of money laundering or fraud, your assets are then subjected to confiscation. Disposal of funds can include selling, spending, transferring, or even giving the funds away to charities and the like. If someone close to you has been issued a restraint order, then it is likely that your financial records and accounts will also be under investigation.
How can a restraint order be challenged?
Until an order is discharged, you will lose all control over your personal finances and property if a restraint order is filed against you. Those with frozen assets are usually granted a small living allowance, but this is usually considered meagre. A restraint order must be carefully scrutinised by your legal representative to ensure that your rights are being upheld.
It is possible to challenge a restraint order in several ways. For instance, procedures in obtaining the restraint order may not have been correctly followed, or evidence in support of the application may not be sufficient to uphold the order, which could be an abuse of process and lead to the case being struck out. Procedural errors can also frequently occur, and your solicitor can challenge the validity of POCA enforcement measures, as well as the integrity of material placed before the prosecution as evidence.
In 2015, the Serious Crime Act was amended, and the test for granting a restraint order has since been changed from 'reasonable grounds to believe' to 'reasonable grounds for suspecting' that an alleged offender benefited from their financial crime. Restraint orders can now also remain in place even if a trial is suspended, a conviction is quashed and a retrial is requested.
Contact our Professional Financial Crime Solicitors in Central London Today
If you have been accused of money laundering, fraud or another type of financial crime and your assets have been frozen, our solicitors can assist in defending your business and personal property. Our expert lawyers at Lewis Nedas Law use their legal knowledge to fight even the most complex of cases involving serious fraud, drugs and money laundering. We can challenge the terms and validity of a restraint order to minimise the impact on clients' professional and personal lives. To speak with one of our financial crime lawyers, please contact us on 020 7387 2032 or complete our online enquiry form.
