Property Freezing Order (PFO) definition and meaning | AML glossary
Property freezing order (PFO) definition: What it means in AML compliance.
A Property Freezing Order (PFO) is a legal tool used by UK authorities to prevent the sale, transfer, or disposal of assets suspected of being connected to criminal activity. These orders are often used in serious financial crime investigations – particularly those involving money laundering, fraud, or unexplained wealth – and are issued under the Proceeds of Crime Act 2002 (POCA).
A PFO essentially “freezes” assets while an investigation is underway, ensuring that property cannot be hidden, moved, or spent before a court has determined whether it should be permanently confiscated.
When can a property freezing order be issued?
Property freezing orders are typically issued:
- When there is reasonable cause to believe that the property in question is either obtained through unlawful conduct or will be used for criminal purposes.
- In civil recovery proceedings brought by enforcement authorities such as the National Crime Agency (NCA).
- As a preventative measure before a criminal conviction has been secured.
PFOs can apply to various types of property, including:
- Bank accounts
- Real estate
- Vehicles
- Shares or business interests
How does a property freezing order work?
Once granted by the High Court, a PFO restricts the subject from selling, gifting, mortgaging, or otherwise dealing with the specified property. Any breach of the order can result in serious penalties, including imprisonment for contempt of court.
PFOs can also be accompanied by disclosure orders, requiring individuals or companies to provide detailed information about the property’s origin and ownership.
Property freezing orders vs unexplained wealth orders
PFOs are often used in conjunction with Unexplained Wealth Orders (UWOs). If someone cannot adequately explain how they acquired certain high-value assets, the court may issue a PFO to ensure the property cannot be disposed of while an investigation is ongoing. These two orders often work together to combat hidden or suspicious wealth, particularly among politically exposed persons (PEPs) or individuals with links to high-risk jurisdictions.
How compliance teams can stay ahead.
For regulated businesses, especially those in legal, financial, and property sectors, early detection of high-risk clients and suspicious ownership structures is essential. Robust due diligence, clear audit trails, and timely reporting of suspicious activity can help firms avoid entanglement with clients or transactions that may be subject to PFOs.
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