ENGLAND & WALES Law and Practice Contributed by: John Kaye and Piers Desser, Carson Kaye
In addition, regulators such as the FCA may obtain injunctions under the FSMA in limited circumstances, and insolvency-style freezing mechanisms may also operate in parallel. Legal Requirements and Thresholds For a restraint order, the court must be satisfied that: • a criminal investigation or prosecution has been started; and • there is reasonable cause to believe the alleged offender has benefited from criminal conduct. For civil recovery freezing orders, the threshold is that the High Court must be satisfied there is a good argu - able case that the property is recoverable property and that a freezing order is necessary to prevent dis - sipation or frustration of enforcement. A key factor in both regimes is risk of dissipation, concealment, or transfer of assets. Courts also apply a balancing exercise, weighing enforcement needs against proportionality and the impact on legitimate business operations. Scope and Extraterritorial Reach POCA orders are binding on the respondent, mean - ing they can extend to assets located abroad so long as the respondent is subject to the jurisdiction of the English courts. While UK courts cannot directly seize foreign assets, they can: • compel the respondent to refrain from dealing with overseas property; and • require disclosure of foreign holdings. Enforcement abroad is achieved through MLA requests or through recognition/enforcement of UK orders in co-operating jurisdictions, often under bilat - eral treaties or regional frameworks. Extension to Third Parties These powers can be extended to third parties in sev - eral ways. • Restraint/freezing orders may apply to “tainted gifts” or assets transferred to third parties where
the court is satisfied the property represents the proceeds of crime. • Orders can bind nominees, trustees, and corpo - rate vehicles if they hold assets on behalf of the suspect or where there is evidence of beneficial ownership or control. • Courts may also restrain assets held by connected entities where there is a risk of dissipation through group structures. However, bona fide third parties who acquired assets for value and without knowledge of criminal prov - enance may be protected and can apply to vary or discharge orders. Practical Effect In practice, UK courts are willing to grant restraint and freezing orders at an early stage of investigations, par - ticularly in fraud, bribery, and money laundering cas - es. The emphasis is strongly preventive: preserving the status quo and ensuring that assets remain avail - able for confiscation, compensation, or civil recovery. 3. Core Financial Crime Offences 3.1 Fraud and Dishonesty Offences In England and Wales, the principal fraud offences are set out in the Fraud Act 2006, which created a general offence of fraud that can be committed in three ways. • Fraud by false representation arises where a per - son dishonestly makes a false statement (express or implied) knowing it is or may be untrue with the intention of making a gain or causing loss (or risk of loss) to another. The representation can be made to a person or a system (for example, online transactions). • Fraud by failing to disclose information applies where a person dishonestly omits information that they are under a legal duty to disclose, again with intent to make a gain or cause loss. The duty may arise from statute, contract or a fiduciary relation - ship. • Fraud by abuse of position occurs where a person occupies a position in which they are expected to safeguard, or not act against, the financial interests of another and dishonestly abuses that position for
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