Jeremy Scott-Joynt successful in defeating £550,000 account freezing order

Jeremy Scott-Joynt has secured the release of more than half a million pounds in a client’s UK bank account frozen by HM Revenue and Customs (“HMRC”).

In late 2019, HMRC had successfully applied (without notice, as is usual) to a magistrate’s court for an Account Freezing Order (“AFO”) over the account, which contained some £550,000. Once the client had been notified that the AFO was in place, his solicitors contacted Jeremy for help.

Full details of the AFO regime can be found in this article by Outer Temple’s Oliver Powell and others. In short, AFOs are a relatively new weapon in law enforcement’s AML armoury, having been added to the Proceeds of Crime Act 2002 (Part 5, Chapter 3B, sections 303Z1-303Z19) by the Criminal Finances Act 2017. They allow an enforcement officer to ask a magistrate’s court for an order freezing an account for up to two years, on the basis of reasonable grounds to suspect the funds therein are either criminal proceeds or are likely to be used for criminal purposes. This is a low bar: as long as the facts supplied in the Information accompanying the application objectively appear to create the possibility of suspicion, the order is likely to be granted.

Once granted, an AFO can be set aside or varied at the officer’s application or that of the account holder. More usually, though, the officer will proceed to forfeiture – which would require the Crown to prove its case on the balance of probabilities, rather than on simple suspicion.

In this case, the order was granted for six months, and still had four months to go when Jeremy was instructed. On examining the Information and discussing the matter with both the client, his solicitor and his accountant, Jeremy concluded that there were not only factual errors in the Information, but that the inferences drawn from even the accurate factual material could be overcome.

Jeremy was therefore retained to advise on and draft a statement for the client based on the information the client provided, and a covering letter making the case that HMRC had simply got it wrong and that the just and proportionate thing for them to do would be to apply to have the AFO set aside.

Little more than a month later, HMRC informed the client that they would do just that. The client’s control over his funds was restored.

With more and more AFOs in the pipeline – some large law enforcement agencies are believed to be planning or making hundreds of such applications – clients will need assistance in either correcting mistaken assumptions and inferences whether at the freezing stage or at forfeiture. Outer Temple’s Business Crime and Regulation team are experienced in dealing with all varieties of proceeds of crime matters, including AFOs. If you or your clients are facing this kind of urgent concern, please get in contact and we will be happy to help.

News 6 Mar, 2020