Schedules Schedule 7: Bank accounts
Paragraph 2 amends the 2014 Act, inserting new sections 40A – 40H.
	New section 40A creates a duty for banks and building societies to carry out periodic checks on the immigration status of holders, signatories and beneficiaries of existing current accounts ("immigration check"), to identify whether they are disqualified persons. Subsection (3) of new section 40A defines a disqualified person as someone known to be unlawfully present in the UK, and for whom the Secretary of State considers that a current account should not be provided by a bank or building society. The frequency of these checks will be specified in regulations made by HM Treasury (subsection (1) of new section 40A).
	Subsection (2) of new section 40A defines an immigration check for the purposes of these provisions. Banks and building societies will be required to check current account holder details against information supplied by the Secretary of State to a specified anti-fraud organisation or a specified data-matching organisation. The check should ascertain whether a holder, signatory or beneficiary of an existing current account is a disqualified person. There is no requirement to contact account holders as part of the check or obtain additional documentary evidence.
	New section 40B requires banks and building societies to notify the Secretary of State when an immigration check identifies that an account holder, signatory or beneficiary is a disqualified person.
	New section 40C deals with the duties on the Secretary of State once she has been notified that an account holder is a disqualified person. On receiving such notification, the Secretary of State will first check that the individual has been correctly identified as a disqualified person.
	If the Home Office confirms that the individual is a disqualified person, the Secretary of State must decide whether to apply to a court for an order to freeze the person's current account and any other accounts held by the disqualified person with that bank or building society. Subsection (2) of new section 40D provides that freezing orders are orders that prevent withdrawals from or payments from the account to which they relate.
	The code of practice provided for in new section 40F will outline the factors which are to be taken into account in deciding whether to apply for a freezing order. For example, these might include the level of funds involved, the individual’s immigration history and the risk they present to the public. It will also include guidance on keeping the orders under review and the circumstances in which it will be appropriate for the Secretary of State to apply for an order to be discharged. It is intended, in particular, that an application for discharge will be made when a disqualified person departs from the UK. The Code must be laid before Parliament before coming into effect.
	If the Secretary of State does not wish to apply for a freezing order, she will notify the bank or building society (new section 40C).
	New section 40D (freezing orders) provides for courts (as defined in subsection (9) of new section 40D) to be able to make an order to freeze accounts held by a disqualified person on application by the Secretary of State. A person whose account is frozen will not be able to make withdrawals or payment transfers from the account, subject to exceptions outlined below. A person other than the disqualified person may also be prevented from making withdrawals or payments from an account if it is jointly controlled with the disqualified person and the court consider it appropriate.
	Freezing orders will not be limited to current accounts but may include any account which the disqualified person holds with the bank or building society provided notice has been given to the Secretary of State following an immigration check. The Secretary of State will have discretion as to which accounts are included in the application for a freezing order and the court will have discretion as to which accounts it includes in any order.
	Where an account is frozen the order may make provision to allow payments necessary to meet an individual’s basic living needs and legal expenses.
	New section 40E makes statutory provision for appeals against freezing orders.
	New section 40G establishes duties that will apply where a bank or building society has been notified that the Secretary of State does not intend to seek a freezing order (or where an application for a freezing order is unsuccessful, or where a freezing order is made but subsequently discharged). Subsection (2) requires that the bank or building society must close the accounts in question as soon as is reasonably practicable. This will allow notice to be given in line with the terms and conditions of an account. In the case of accounts that are overdrawn, or where the bank or building society believes that closure would significantly adversely affect other persons or bodies who operate or hold the accounts, the bank or building society may further delay closure for a reasonable period, but not indefinitely. This will enable the bank or building society to take necessary action to resolve the situation, including action to recover debt or open new accounts for third parties if that is appropriate.
	Subsection (5) of new section 40G also provides that a bank or building society can comply with the duty in subsection (2) without closing an account. This will be the case where the account is also operated by others who are not disqualified persons and the bank or building society can prevent the disqualified person from continuing as a holder, beneficiary or signatory of the account while leaving the account open.
	Where an account is closed under subsection (2) of new section 40G, the account holders must be informed that the closure is due to the fact that the account is operated by or for a disqualified person, where the bank may lawfully do so (that is, where notifying the person does not conflict with other legal duties). If a disqualified person is prevented from continuing to operate an account under subsection (5), account holders must also be informed.
	The bank or building society will be under a further duty to notify the Secretary of State of the action it has taken to comply with the duty, in a manner to be prescribed in subsequent regulations made by the Treasury.
	Paragraph 3 amends section 41 of the 2014 Act to enable the Treasury to make regulations to enable the Financial Conduct Authority to regulate banks and building societies' compliance with these new requirements.
	Paragraph 4 of Schedule 4 amends section 42 of the 2014 Act with the effect that the definitions of ‘bank’ and ‘building society’ which it contains also apply in the case of these new sections inserted into the 2014 Act by paragraph 2 of Schedule 4 to the Act.
	Paragraph 5 extends to the new sections the power to amend the categories of institution or account to which the provisions apply. This power is contained in section 43 of the 2014 Act.
	Paragraph 6 is a consequential amendment to section 74 of the 2014 Act, which governs the making of orders and regulations under the Act.
	Paragraph 7 amends the Civil Jurisdiction and Judgments Act 1982, to ensure that a freezing order made under new section 40D is in the category of judgments which can be enforced across the UK.