This can create significant challenges for those whose accounts are frozen, but especially for businesses. An AFO may be granted without notice, which means that you may not find out until the funds have already been frozen. Law enforcement agencies often use this approach if they wish to protect funds with a view to recovering them once their review has concluded. In these cases, you may be left without access to key business accounts or the funds you need to cover daily operating costs.

While this represents a significant inconvenience, there remain options available for businesses in this position. There are ways to challenge account freezing orders and have them varied or discharged, including to provide for operating expenses, but it is important to seek legal support in order to restore access to your account. Here, the expert account freezing order solicitors at JMW explain how an AFO may be used, what it means for your business, and how you can respond to protect your interests.

What is the risk of an AFO?

AFOs are among the most commonly used mechanisms by law enforcement agencies to restrict access to funds. While they are not the only power that is available, AFOs require a relatively low threshold of evidence to obtain. This means that the police or other enforcement authorities can apply for and secure AFOs easily, and they are frequently used for this reason. They can last for up to two years, although an initial AFO is usually requested for three to six months. This can cause a significant disruption to business operations.

For example, the consequences for cash flow can be severe. If your cash flow reserve account is subject to an AFO, your organisation’s buffer against financial instability is removed, and this can quickly lead to problems. The AFO applies to an account and will most likely apply to all funds in the account, including any added to the account after an AFO is made. If your business is struggling with cash flow as a result of the AFO, these issues may not be resolved by collecting payments from debtors, because the incoming funds would be subject to the AFO, if paid into the same account.

The only way to resolve this is to have the order varied or discharged. Thankfully, this is possible in many cases with the right legal support. It is important to act quickly in response to an AFO, to minimise the disruption to your operations and understand your legal options in response, as there can be serious consequences for your business moving forward from this point.

How should you respond to an AFO?

While a business can often challenge an AFO and have it varied or discharged, particularly to access the funds it needs to continue trading, your first step should be to speak to a solicitor. If challenging the AFO is unlikely to be successful, you can end up in costly court proceedings that will create further financial difficulties for your company with no reward. However, there may be other approaches on which a solicitor can advise you to help you reach a successful outcome.

It is important to remember that an AFO will usually be obtained where suspicious activity has taken place on the account or there is other intelligence, and while your priority may be to recover access to your accounts, you must also consider wider issues. By working with a solicitor, you can also get help to gather evidence, representation for any interviews with investigators, and advice on reputation management during investigations or court proceedings. An experienced account freezing order solicitor can help to remove or vary the AFO as the first step, which will then free up the cash you may need for more extensive legal support.

The options available to businesses in this position will depend on a variety of factors, including the enforcement agency dealing with the proceedings, the nature of any alleged connection to criminal activities, whether any other orders are in place, and more. As such, only a solicitor with experience in this area can give you a realistic overview of your options, and help you to keep your business on track. With the right legal support, organisations can successfully navigate the difficulties of an AFO and find themselves able to continue to trade.

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