The rise and fall of the SFO’s Account Freezing and Forfeiture Orders: a snapshot of recent trends

Gherson recently submitted a Freedom of Information (FOI) request to the Serious Fraud Office (SFO) to ascertain the SFO’s use of Account Freezing Orders (AFrOs) and Account Forfeiture Orders (AFOs) since their introduction in 2017. The results are telling.

Introduction to Account Freezing Orders and Account Forfeiture Orders

The Criminal Finances Act 2017 introduced the AFrO as a tool for UK law enforcement agencies, including the SFO, to freeze funds in bank accounts suspected of being connected to criminal activity. An AFrO allows the agency to investigate the origin and intended use of the frozen funds.

An AFrO can last for up to two years. During this period, the agency may apply for an Account Forfeiture Order (AFO) to permanently seize the funds if they are proven to be proceeds of crime.

For more detailed information on AFrOs and AFOs, and on how to respond to them effectively, please refer to our previous blog posts.

Trends in the SFO’s use of AFrOs and AFOs

SFO’s Use of Account Freezing Orders (AFrOs)

The number of AFOs obtained has also varied:

• 2018–2019: 1 order
• 2019–2020: 1 order
• 2020–2021: 1 order
• 2021–2022: 1 order
• 2022–2023: 8 orders
• 2023–2024: 0 orders

In total, since 2017, the SFO has obtained 25 AFrOs and 12 AFOs.

Comparison with other UK law enforcement agencies

Other UK agencies have been utilising AFrOs and AFOs more extensively:

• HM Revenue & Customs (HMRC): Increased its use of AFrOs from 125 in 2021–2022 to 341 in 2023–2024.

Information on the National Crime Agency’s (NCA) use of these orders is less accessible due to FOI restrictions. However, the NCA often publicly announces when it obtains AFrOs and AFOs.

Interpreting the trends

The use of AFrOs and AFOs varies between agencies due to the nature of their investigations:

• SFO’s Focus: Deals with a smaller number of large, complex, often international cases. AFrOs are not applicable to overseas accounts, limiting their use for the SFO.
• HMRC’s Activity: Handles a higher volume of smaller, domestic cases, which explains its increased use of AFrOs and AFOs.
• NCA’s Role: Likely utilises AFrOs and AFOs extensively due to its broad mandate against serious and organised crime.

Future developments

The SFO is set to receive an additional £9.3 million in funding to combat complex fraud, bribery and corruption. It remains to be seen whether this will lead to an increased use of AFrOs and AFOs.

Introduction of Crypto Wallet Freezing Orders

The Economic Crime and Corporate Transparency Act (ECCT) has amended the Proceeds of Crime Act 2002 (POCA) to enhance the recovery of cryptoassets. A key amendment is the introduction of the Crypto Wallet Freezing Order (CWFrO).

• Purpose: Functions similarly to an AFrO but is tailored to the unique aspects of cryptoassets.
• Significance: Addresses the growing use of cryptocurrencies in illicit activities.

We have explored the CWFrO in a recent blog.

Conclusion

The fluctuation in the SFO’s use of AFrOs and AFOs highlights the agency’s focus on complex cases where these tools may not always be applicable. In contrast, agencies like HMRC have ramped up their use, reflecting their different operational focus.

As legal frameworks evolve, particularly concerning cryptoassets, monitoring these trends will be crucial. The introduction of CWFrOs represents a significant development in asset recovery efforts.

Stay tuned for future updates on these trends.

How Gherson Can Assist

Gherson has extensive experience advising clients on matters related to AFrOs, AFOs and CWFrOs. Our expertise includes:

• Legal Representation: Assisting clients affected by freezing and forfeiture orders.
• Strategic Advice: Guiding on how to respond effectively to such orders.
• Regulatory Compliance: Navigating the complexities of POCA and related legislation.

Contact Us

If you are affected by any of these issues or require guidance, please do not hesitate to contact us.

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Updated 3 December 2024

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The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

©Gherson 2024

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