Restraint Orders | Proceeds of Crime Act 2002
A ‘Restraint Order’ can be made under Section 41 of the Proceeds of Crime Act 2002 (POCA) to target the assets of individuals or companies. This includes property, bank accounts and other financial interests suspected to have derived from criminal activity.
A Restraint Order prohibits the owner from selling, transferring, or otherwise managing specified assets. This preserves the assets during ongoing investigations and future criminal proceedings, ensuring they remain accessible for a potential Confiscation Order in the event of a criminal conviction.
Mohammed Ahmed of KANGS explains the purpose of a Restraint Order and outlines the options available to suspects and defendants once an order has been issued.
How is a Restraint Order Made?
The investigating authority (such as HMRC, SFO, Police, FCA) will make an application for a Restraint Order, which a Crown Court can issue if it is satisfied there is evidence to suggest that an individual or company has financially benefited from criminal activity. Typically, the Restraint Order is sought while the investigation is ongoing and before any formal criminal charges are brought.
The individual or company will not be informed of the application to the court until after the Restraint Order has been granted. They will usually become aware of it when formal service of the Restraint Order takes place. On occasions the individual or company may become aware of its existence even before a copy has been formally served due to access to bank accounts being denied as a result of the order being served on the bank.
Legislation | Proceeds of Crime Act 200
Section 40 - Conditions for exercise of powers
- The Crown Court may exercise the powers conferred by section 41 if any of the following conditions is satisfied.
- The first condition is that—
- (a) a criminal investigation has been started in England and Wales with regard to an offence, and
- (b) there are reasonable grounds to suspect that the alleged offender has benefited from his criminal conduct.
- The second condition is that—
- (a) proceedings for an offence have been started in England and Wales and not concluded, and
- (b) there is reasonable cause to believe that the defendant has benefited from his criminal conduct.
Section 41 - Restraint Orders
- If any condition set out in section 40 is satisfied the Crown Court may make an order (a Restraint Order) prohibiting any specified person from dealing with any realisable property held by him.
- A Restraint Order may provide that it applies—
- (a) to all realisable property held by the specified person whether or not the property is described in the order;
- (b) to realisable property transferred to the specified person after the order is made.
41A - Restraint Orders: power to retain seized property etc.
- A Restraint Order may include provision authorising the detention of any property to which it applies if the property—
- (a) is seized by an appropriate officer under a relevant seizure power, or
- (b) is produced to an appropriate officer in compliance with a production order under section 345.
What is the Effect of the Order?
Once a Restraint Order has been granted it will prevent access to bank accounts holding funds and prevent dealing in other assets. The order is enforceable by law and all named parties in the order must comply with its terms, with non-compliance leading to potential criminal proceedings.
A Restraint Order will remain in effect until the conclusion of either the investigation or the court proceedings. It can be varied or discharged by the court if circumstances change, such as the investigation concludes without charge or if a criminal trial ends with an acquittal.
Law enforcement agencies and prosecutors regard Restraint Orders as a crucial tool in the effort to combat organised and serious crime by targeting the proceeds and assets derived from alleged criminal activity. The purpose is to ensure illegally obtained assets are available to be confiscated at the conclusion of any subsequent criminal proceedings.
Can I challenge a Restraint Order?
Those subject to a Restraint Order can challenge it in court. The challenge could be on the basis that the order is not justified at all (discharge), the terms of the order are too wide (variation) or that there has been a procedural anomaly in either the application for the order or in the grant of the order.
There are several potential outcomes to any challenge. The court may uphold the Restraint Order, modify its terms for example releasing some assets or provide living expenses, or discharge it completely.
Typically, the Restraint Order will make provision for the withdrawal of a set amount per week for ordinary living expenses.
If you are served with a Restraint Order, it is important to seek legal advice and representation as early as possible due to the complexity of the law governing Restraint Orders.
Challenging a Restraint Order under POCA demands meticulous preparation, a thorough understanding of case law and being alert to any procedural errors that may have occurred in the application or issue of a Restraint Order.
How we can help you
We understand that being subject to a Restraint Order can have significant debilitating consequences. If you find yourself served with such an order, the team at KANGS can help by reviewing the order, assessing its legality and advising you of your rights and options.
Some of the ways in which we can assist clients includes:
- Challenge the Restraint Order and apply for its discharge.
- Negotiate with the prosecuting authority to enable company bank accounts to continue to operate.
- Apply for the release of restrained funds to maintain liabilities.
- Negotiate with the investigating authority for a variation of the weekly living allowance and other essential expenses.
- Represent and advise third parties affected by the Restraint Order.
Our experienced solicitors have proven success in challenging Restraint Orders as well as effectively negotiating with the law enforcement agencies to limit the scope of any such orders. Should you wish to discuss your matter further, please contact our team using the details below:
Tel: 0333 370 4333
Email: info@kangssolicitors.co.uk
We provide initial no obligation discussion at our three offices in London, Birmingham, and Manchester. Alternatively, discussions can be held through video conferencing or telephone.
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