Part 2: Terrorist property Civil recovery Section 40: Forfeiture of money held in bank and building society accounts
Section 40 and Paragraph 2 to Schedule 4 insert into Schedule 1 of ATCSA a new Part 4B, which make provision for the freezing and forfeiture of bank and building society accounts, where those accounts contain monies which are: intended to be used for terrorism, the resources of a proscribed organisation or property earmarked as terrorist property.
	Paragraph 10Q allows a "senior officer", or an "enforcement officer" with senior officer approval, (as defined in sub-paragraph 7) to apply for an account freezing order (AFO) in respect of bank and building society accounts, where there are reasonable grounds to suspect that the money held in them are: intended to be used for terrorism, the resources of a proscribed organisation or property earmarked as terrorist property. The AFO can be made without notice, if notice of application would prejudice the taking of any steps to later forfeit such monies.
	The AFO prohibits each person by or for who the account to which the order applies is operated, from making withdrawals or payments from the account. The AFO must be applied for at a magistrates’ court in England, Wales and Northern Ireland, or to the Sheriff in Scotland. The funds within the account remain with the bank or building society.
	Sub-paragraph 10Q(3)(b) introduces a requirement to consult with HM Treasury into the AFO application process. The requirement to consult will enable the Treasury to consider whether it should be exercising its powers under the Terrorist Asset-Freezing etc. Act 2010 in the particular case.
	Paragraph 10R defines the term "bank".
	Paragraph 10S provides that the court may make the order, if is satisfied that the funds in the account (whether all or in part) meet the relevant definition in Paragraph 10Q.
	The court sets the timeframe for the AFO which may not exceed an overall 2-year maximum period, starting on the day it was made.
	Paragraph 10T allows a court to vary or set aside an account freezing order at any time, and can also do so upon application by any person affected by such an order. This is at the discretion of the court.
	Paragraph 10U allows the court to make exclusions from the restriction on activity on the account for the purpose of meeting living expenses or to allow a person to carry on a business or trade. It also permits exclusions for legal expenses.
	Paragraph 10V provides that a court, in which proceedings relating to a frozen account are pending, can stay those proceedings if satisfied that an AFO order has been applied for or obtained. That court may also order that proceedings can continue on any terms it thinks appropriate.
	Paragraph 10W allows a senior officer to give an "account forfeiture notice", which is a notice for the purposes of forfeiting the funds in an account. The funds must be subject to an account freezing order for an account forfeiture notice to be served. This is an administrative procedure.
	Sub-paragraph 10W(2) provides that a senior officer may give a notice that they intend to seek forfeiture of the balance of the account, provided that they are satisfied that the contents either are intended to be used for the purposes of terrorism, consist of the resources of a proscribed organisation or are property earmarked as terrorist property. Per sub-paragraph 10W(4) the account forfeiture notice (AFN) must set out the amount to be forfeited, the period for objecting to the forfeiture, and the address to which any objections must be sent. The period for objecting must be at least 30 days. An objection may be made by anyone, in writing. If no objection is received, at the end of the period the amount of money stated in the account forfeiture notice will be forfeited, and the bank or building society must transfer that money into the interest bearing account nominated by an enforcement officer. An objection does not prevent forfeiture of the money under Paragraph 10Z2. It is not necessary for an account forfeiture notice to be sought if the law enforcement agency decides instead to seek forfeiture of the money by order of a court under sub-paragraph 10Z2(2).
	Paragraph 10X requires the Secretary of State to make regulations about how an AFN is to be given.
	Paragraph 10Y sets out the conditions under which an AFN lapses. The AFN lapses if an objection is received; an application for forfeiture is made; or if the AFO is recalled or set aside. Under sub-paragraph 10Y(2), if the AFN lapses due to an objection being made, the relevant AFO will cease 48 hours after the objection. Sub-paragraph 10Y(3) provides that, if within the 48-hour period a senior officer applies to either extend the period of the AFO under Paragraph 10T or to seek forfeiture of the money under Paragraph 10Z2, the AFO will continue to have effect until the relevant time.
	Paragraph 10Z sets out the procedure for applying for an administrative forfeiture to be set aside. The application must be made before the end of the objection period. It can be made after a longer period if the court is satisfied there are exceptional circumstances. The court must consider whether the money could be forfeited under paragraph 10Z2 (judicial forfeiture). If it is satisfied that the funds could not be forfeited under that paragraph, it must set aside the administrative forfeiture and order the release of that money.
	Paragraph 10Z1 provides that any money forfeited under an account forfeiture notice must be paid into the Consolidated Fund.
	Paragraph 10Z2 sets out the procedure for applying to a relevant court for the forfeiture of the money in a frozen account. If the court is satisfied that the money is intended to be used for the purposes of terrorism, consists of the resources of a proscribed organisation or is property earmarked as terrorist property, it may order forfeiture of those monies. Where a court orders forfeiture, the bank or building society with which the monies are held must transfer those funds to an interest bearing account nominated by the enforcement officer.
	Paragraph 10Z3 provides that, where a court declines to order forfeiture and the law enforcement agency appeals that decision, it may also apply for an extension of the account freezing order pending the appeal.
	Paragraph 10Z4 provides that any party aggrieved by a forfeiture order or the refusal make such an order, can appeal that order or decision. The time period for the lodging of an appeal is 30 days from the day that the court makes the order or decision. If the appeal is upheld, the court may order the release of the whole or part of the funds. If a forfeiture order is successfully appealed, and the funds are returned to the individual, any interest which accrued during the time that the funds were held by the police shall also be returned to the individual.
	Paragraph 10Z5 provides that, where an application for forfeiture is made on the basis that an organisation is proscribed and there is subsequently a successful appeal against a refusal to proscribe the organisation, an appeal against the forfeiture order may be brought within 30 days of the deproscription order coming into force.
	Paragraph 10Z6 provides that any funds forfeited under an order should be paid into the Consolidated Fund.
	Paragraph 10Z7 provides that if an AFO is made and none of that money is subsequently forfeited, the person by or for whom the account is operated may make an application to court for compensation. Paragraph 10Z7(3) provides that the court, if satisfied that the applicant has suffered loss and the circumstances are exceptional, may order compensation be paid to the applicant. The amount of compensation to be paid is the amount the court thinks reasonable, having regard to the loss suffered and any other relevant circumstances.
	Paragraph 3 of Schedule 4 to the Criminal Finances Act amends paragraph 19 (general interpretation) of Schedule 1 to ATCSA to make consequential amendments which reflect the definitions used in new Part 4B of Schedule 1 to ATCSA.