Frozen bank accounts and suspicious activity reports: extension of the moratorium period
How long can a bank freeze your account for is a common question when an individual's bank account is under investigation. Where a bank account has been frozen following a Suspicious Activity Report (‘SAR’) to the National Crime Agency (NCA) there is an initial period of seven working days during which the NCA investigate whether to allow the transaction. If further time is required for that investigation this is known as the ‘moratorium period’ and runs for 31 calendar days after the expiry of that seven day period (i.e. a maximum of 42 days).
Following the conclusion of the moratorium period the bank (or any other institution holding money) is required to release the account/process any transactions, absent court order. There is, however, provision to extend the moratorium period on application to the Crown Court.
How long can the moratorium period be extended for?
Under section 336A the Proceeds of Crime Act 2002 the Crown Court may now grant an extension of the initial moratorium period for a further 31 days. Further applications may be made of 31 days incrementally to a maximum of six months.
Why would the Court extend the moratorium period?
The Court will only extend the period if it is satisfied that:
i) An investigation is ongoing following an SAR which has not been completed;
ii) that investigation is being conducted diligently and expeditiously;
iii) further time is required to conduct the investigation; and
iv) it is reasonable to extend the moratorium period.
How do I know if an application has been made?
An application to extend the moratorium period needs to be made before the expiry of the existing period. The written application must be served upon you (and other interested parties) in advance of any hearing.
Will there be a hearing? Can I and/or my solicitors attend?
Yes, normally. The Crown Court may proceed to determine the application without your attendance only in specific circumstances, including the fact that it would prejudice the investigation to allow you to be present.
In all instances, if you are made aware of an application you should seek urgent specialist legal advice.
Can I challenge the application to extend the moratorium period?
You can challenge the application in writing but must do so within two business days after service of the application to extend.
What if I have not received any application for an extension outside the moratorium period?
You can assume that no application has been made if you have not received notice of the application prior to the expiry of the moratorium period (or an Order shortly thereafter). If such an application has been made without you have received notice then you should seek legal advice as to your recourse. If the bank/financial institution continues to restrict access to the account then you should seek advice as to how to take potential action against the bank.
How can Brett Wilson Solicitors assist?
Brett Wilson is recognised for its work in this field. We can advise you in relation to the proceedings before the Court to either extend the moratorium period, account freezing orders, cash forfeiture orders and all other powers contained within the Proceeds of Crime Act 2002 to restrain assets. In situations where there is seemingly no Court order to freeze the account we can advise you about commencing action against the financial institutions who have failed to unfreeze accounts and have been successful in securing the release of funds in these situations.
Articles are intended as an introduction to the topic and do not constitute legal advice.