How to deal with a Restraint Order

A Restraint Order is issued by the court to prevent someone who is suspected of having benefitted from criminal conduct from disposing of their assets by transferring, hiding or giving them away. No notice is given to the subject of the Order, so it is sometimes the case that the first someone knows about it is when they discover that their bank account has been frozen.

The authorities issue Restraint Orders so that assets can be seized under a Confiscation Order if a criminal offence is subsequently proved.

Grounds on which a prosecutor can ask the court to issue a Restraint Order

Under the Isle of Man Proceeds of Crime Act 2008, a prosecutor can ask the court to grant a Restraint Order if a criminal investigation or criminal proceedings have begun and there is reasonable cause to believe that someone has benefitted from the suspected offence.

This means that a Restraint Order can be made against someone who is not suspected of having committed any crime. Simply by being reasonably suspected of having benefitted from someone else’s criminal behaviour, a person can have their assets frozen. Scrutiny is particularly close in the Isle of Man because of its favourable tax regime, which is often attractive to illicit business activity such as money laundering.

As well as causing problems for an individual, a business could be financially crippled and its reputation ruined if a Restraint Order is issued against one of its personnel. As the order is made prior to any criminal conviction or trial on evidence, it may later be found to be unjustified.

Unfortunately, by that time the damage may already be done and a business may find it hard to recover.

What happens when a Restraint Order is issued

The person who is the subject of the order will have their assets frozen and be prohibited from carrying out any transaction involving their money or other assets. They will usually be required to disclose all of the assets they own, to include details of property, bank accounts and overseas assets.

A basic income for living expenses may be permitted. The order will usually remain in force until the criminal proceedings are complete. This could be many months and even longer in the case of allegations of complex financial crime.

What to do if you discover you are the subject of a Restraint Order

If a Restraint Order is made against you, it is important to seek legal advice as soon as possible. In some situations it may be possible to ask the court to review the Order and either discharge or vary it.
Your legal representative may also be able to ask for exceptions to the Order to be made to allow you to continue operating a business or profession and to request a living allowance if one has not already been granted.

If you have been made the subject of a Restraint Order and you would like to discuss how best to proceed, Quinn Legal will be happy to advise you on your options.

Our team are experienced in dealing with financial matters and will be able to act quickly on your behalf.

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