The amount of money seized by UK law enforcement agencies, including HMRC, the Serious Fraud Office (SFO) and the National Crime Agency (NCA), has jumped 77% from £108m in 2020/21 to £191m in 2021/22, says law firm RPC.
Adam Craggs, partner and head of the tax, financial crime and regulatory team at RPC, says law enforcement agencies are increasingly using powers to freeze and confiscate assets which require little judicial oversight.
Craggs said that account freezing orders are increasingly being used by enforcement agencies to freeze UK bank or building society accounts and are granted by the Magistrates Court. They do not require authorisation by a senior judge, or indeed a qualified lawyer. Agencies can use such orders to prevent money from being accessed if they believe this might be linked to criminal activity, even before an investigation has taken place. They can apply to accounts with balances of just £1,000 and enable authorities to preserve funds for subsequent forfeiture.
If the authority is satisfied that the funds are the proceeds of crime, they can then serve an account forfeiture notice to seize the money without any judicial oversight or apply to the court for an account forfeiture order.
‘Account freezing orders are controversial as an application, for such an order can be made before an investigation has even begun and the agency is only required to prove the allegations on the balance of probabilities, rather than the higher criminal standard of beyond reasonable doubt,’ Craggs said.
‘Given the low thresholds for obtaining these orders it’s concerning that they are being used so liberally.’
The amount seized through account forfeiture as a percentage of all confiscations and civil recovery orders, has increased from 20% of all money seized in 2016/17 to 54% in 2021/22.
RPC says the asset recovery incentivisation scheme, whose objective is to provide law enforcement agencies with financial incentives to pursue asset recovery by allowing them to keep some of the money forfeited, may be another reason why the amount of money seized has increased in recent years.
The amount of money seized by UK law enforcement agencies, including HMRC, the Serious Fraud Office (SFO) and the National Crime Agency (NCA), has jumped 77% from £108m in 2020/21 to £191m in 2021/22, says law firm RPC.
Adam Craggs, partner and head of the tax, financial crime and regulatory team at RPC, says law enforcement agencies are increasingly using powers to freeze and confiscate assets which require little judicial oversight.
Craggs said that account freezing orders are increasingly being used by enforcement agencies to freeze UK bank or building society accounts and are granted by the Magistrates Court. They do not require authorisation by a senior judge, or indeed a qualified lawyer. Agencies can use such orders to prevent money from being accessed if they believe this might be linked to criminal activity, even before an investigation has taken place. They can apply to accounts with balances of just £1,000 and enable authorities to preserve funds for subsequent forfeiture.
If the authority is satisfied that the funds are the proceeds of crime, they can then serve an account forfeiture notice to seize the money without any judicial oversight or apply to the court for an account forfeiture order.
‘Account freezing orders are controversial as an application, for such an order can be made before an investigation has even begun and the agency is only required to prove the allegations on the balance of probabilities, rather than the higher criminal standard of beyond reasonable doubt,’ Craggs said.
‘Given the low thresholds for obtaining these orders it’s concerning that they are being used so liberally.’
The amount seized through account forfeiture as a percentage of all confiscations and civil recovery orders, has increased from 20% of all money seized in 2016/17 to 54% in 2021/22.
RPC says the asset recovery incentivisation scheme, whose objective is to provide law enforcement agencies with financial incentives to pursue asset recovery by allowing them to keep some of the money forfeited, may be another reason why the amount of money seized has increased in recent years.
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