All you need to know: Prohibition on opening and closure of current accounts for those without leave to enter or remain in the UK
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Banks and building societies are not permitted to open current accounts for persons in the United Kingdom who require leave to enter or remain but do not have it.
The Secretary of State’s position is that such persons should not be provided with access to banking services.
She can therefore notify the person’s bank or building society that it is under an obligation to close an account operated by or for the person.
EFFECT OF THE CHANGES
Prohibition on opening a current account:
Banks and building societies are required to carry out immigration status checks on people applying for current accounts. Under the Immigration Act 2014 they must refuse a person’s application for a new current account (or an application to add a person as a signatory or identified beneficiary to a new or existing current account) if the person is a disqualified person.
A person may be disqualified if they are in the UK and need leave to enter or remain (under the Immigration Act 1971) and do not have leave to be in the UK. This could be because they :
never had leave to enter or remain (because they entered the UK illegally)
had leave but stayed after it expired or was revoked
are an European Economic Area (EEA) national subject to deportation action who has exhausted all rights of appeal
Closure or restriction of access to existing current accounts:
Banks and building societies are required to carry out immigration status checks on people who hold current accounts. If a person is identified as being disqualified from holding an account, then, under the Immigration Act 2014 the bank or building society must close the person’s accounts (or restrict access where the person is a signatory or identified beneficiary, or the account is jointly held with a non-disqualified person).
The Home Office has the power under the Immigration Act 2014 to apply for a freezing order in relation to current accounts for disqualified persons.
If a person holds a current account with another person who is lawfully present in the UK, their bank or building society may have taken steps to prevent the disqualified person from operating the account, instead of closing it.
It was stated that banks and building societies have started carrying out checks on the immigration status of all personal current account holders under government measures to encourage those in the UK illegally to leave. The checks will be done against the details of known illegal migrants which the Home Office is sharing with Cifas, an anti-fraud organisation. Once a bank or building society has found a personal current account that is being operated by an illegal migrant, the Home Office will double check the details before instructing the bank or building society on action to take, which may include closing the account.
In cases where criminality is suspected, the Home Office may apply to the courts for an order instructing the bank or building society to freeze the individual’s accounts.
The Home Office have made it clear that they are only sharing details of illegal migrants who are liable for removal or deportation from the UK or who have absconded from immigration control. The Home Office reiterate that they consider these individuals should be denied access to banking services.
Minister for Immigration Caroline Nokes stated that these new measures are part of the UK Government’s commitment to make it more difficult for people with no right to live or work in the UK to remain here. It has been clarified that this will not affect those who are in the UK legally.
The Home Office considers that those living and working in the UK illegally can drive down the wages of lawful workers, allow rogue employers to undercut legitimate businesses and put pressure on taxpayer-funded public services. The Press Release states that by tackling abuse in this way, the Government can build an immigration system which works in the best interests of the country and prevents vulnerable people from finding themselves at risk of exploitation.
These new measures build on powers to stop illegal migrants opening new current accounts which were introduced 3 years ago. They are part of wide-ranging legislative efforts to encourage those who are living and working in the UK illegally to leave. It is noted that other measures prevent illegal migrants from working in the UK, renting accommodation, obtaining driving licences and working as private hire vehicle and taxi drivers and operators.
HOW THE IMMIGRATION ACT 2016 BUILDS UPON THE IMMIGRATION ACT 2014
The Immigration Act 2016 includes measures to prevent known illegal migrants from operating banks accounts. To bring these measures into force the Immigration Act 2016 gives HM Treasury powers through secondary legislation regulations, which set out: what type of accounts banks and building societies must check; how frequently firms must check; how banks must notify the Home Office about accounts held by illegal migrants, and what the notifications must contain; how the Secretary of State for the Home Office will respond; and how banks will respond regarding their compliance. It also gives the Home Office powers to bring into effect a Code of Practice on orders to freeze accounts.
These measures follow on from the banking measures in the Immigration Act 2014, which prohibited banks and building societies from opening new current accounts for disqualified persons.
The Home Office considers that the bank accounts measures which were incorporated in the Immigration Acts of 2014 and 2016 should be seen as part of a wider set of provisions included in those Acts and elsewhere. These are intended to make it difficult for persons who are unlawfully present to carry out functions which will enable them to establish a life in the UK when they do not have a right to do so. The UK Government’s position is that the overall intention is that the cumulative effect of these provisions will discourage illegal immigration and deter overstaying.
THE SECTION 40 PROHIBITION
Section 40 of the Immigration Act 2014 contains a prohibition on opening current accounts for disqualified persons. Banks and building societies must not open a new current account for a person or add them to an existing account if they are disqualified. This took effect on 12 December 2014 under section 40 of the Immigration Act 2014.
The prohibition:
A bank or building society must not open a current account for a person who is in the United Kingdom, and requires leave to enter or remain in the United Kingdom but does not have it. Such a person is a “disqualified person” in relation to whom the Secretary of State considers that a current account should not be opened by a bank or building society.
As per Section 42 of the 2014 Act, a “bank” means an authorised deposit-taker that has its head office or a branch in the United Kingdom. A “building society” means a building society incorporated (or deemed to be incorporated) under the Building Societies Act 1986.
What does opening an account mean?
Opening an account for a person includes—
opening a joint account for the person and others;
opening an account in relation to which the person is a signatory or is identified as a beneficiary;
adding the person as an account holder or as a signatory or identified beneficiary in relation to an account.
What is the bank or building society required to do?
A bank or building society must not open a current account for a person unless:
It has carried out a status check which indicates that the person is not a disqualified person, or
At the time when the account is opened the bank/building society is unable, because of circumstances that cannot reasonably be regarded as within its control, to carry out a status check in relation to the person. This however does not apply where—
a bank or building society is required to pay a reasonable fee for carrying out status checks, and
its inability to carry out a status check is due to its failure to pay the fee.
A bank or building society that refuses to open a current account for someone on the ground that he or she is a disqualified person must tell the person, if it may lawfully do so, that that is the reason for its refusal.
What is a status check?
Carrying out a “status check” in relation to a person means checking with a specified anti-fraud organisation or a specified data-matching authority whether, according to information supplied to that organisation or authority by the Secretary of State, the person is a disqualified person.
Relevant regulations:
Relevant Regulations are as follows;
Immigration Act 2014 (Bank Accounts) Regulations 2014 3085- These Regulations which came into force on 12 December 2014 made provision, largely by applying and making provisions corresponding to provisions of the Financial Services and Markets Act 2000 (c. 8), to enable the Financial Conduct Authority to enforce the prohibition in section 40(1) (Prohibition on opening current account for disqualified persons) of the Immigration Act 2014 (c. 22).
Immigration Act 2014 (Bank Accounts) (Prohibition on Opening Current Accounts for Disqualified Persons) Order 2014 3086- This Order which came into force on 12 December 2014 provides that the prohibition on opening current account for disqualified persons in section 40(1) the Immigration Act 2014 will not apply in the case of an account to be operated (or an account that is operated) by or for a person or body who is not a charity, a consumer or a micro-enterprise.
Immigration Act 2014 (Bank Accounts) (Amendment) Order 2014 3074- This Order which came into force amends section 40 (Prohibition on opening current account for disqualified persons) of the Immigration Act 2014 to provide for the Treasury to specify by order descriptions of persons or bodies with the effect that the prohibition in section 40(1) does not apply in the case of an account to be operated (or an account that is operated) by or for such a person or body.
Immigration Act 2014 (Commencement No. 2) Order 2014 No. 1943 (C. 89)- This Order brought into force section 40 of the Act on 12th December 2014.
Immigration Act 2014 (Specified Anti-fraud Organisation) Order 2014 1798- This Order which came into force on 2 August 2014 specifies CIFAS as an anti-fraud organisation for section 40(3)(a) of the Immigration Act 2014.
AMENDMENT OF THE 2014 ACT BY THE IMMIGRATION ACT 2016
Sections 40A to 40H of the Immigration Act 2014 were inserted into that Act by the Immigration Act 2016. They set out how a person who is disqualified from operating an account is identified, and place duties on banks/building societies to carry out immigration checks with a specified anti-fraud organisation or data-matching authority in order to ascertain whether holders of current accounts are disqualified.
Operation of the bank account measures in the Immigration Act 2014:
The Immigration Act 2016 sets out how the bank account measures operate. A bank is required to check details of their current account holders against the details of known illegal migrants – disqualified persons – which the Home Office will share with a specified anti-fraud organisation or data-matching authority. If there is a match the firm is required to notify the Home Office. The purpose of the check is to ascertain whether the account is operated by or for a person who is disqualified from operating an account.
The Home Office will only share details of ‘disqualified persons’ with the specific anti-fraud organisation or data-matching authority. Disqualified persons are known illegal migrants who are liable for removal or deportation from the UK, or who have absconded from immigration control. They have exhausted all appeal rights and the Secretary of State considers they should be denied access to banking services. The Secretary of State retains discretion over whether an individual is considered a disqualified person and therefore has their details shared with firms. This could be, because an individual faces legitimate barriers which prevent them from leaving the UK and it would not be reasonable to deny them access to a current account, for example, because they have a long term or terminal illness and are not removable. Banks will also continue to perform immigration status checks for the purpose of complying with their duties to verify that applicants for new current accounts are not disqualified under the Immigration Act 2014.
Banks/building societies must make these checks on at least a quarterly basis, as specified in the Regulations, although they are free to carry out more frequent checks, should they choose to do so.
When, as a result of a check, a bank identifies that a current account is operated by a disqualified person, the bank must notify the Home Office as soon as reasonably practicable – as specified in the Regulations – in the prescribed form and manner. To confirm the match, the Home Office caseworker must then make a secondary check of Home Office records to make certain the individual concerned is disqualified. The caseworker will then provide confirmation of a person’s status to the bank and instruct on whether the duty to close the account(s) applies. A secure Home Office IT portal will be used as a channel for notifications. For cases that Home Office caseworkers consider should be subject to an application for a freezing order or are under separate investigation or action, the caseworker will provide confirmation on a person’s status to the bank and instruct the bank that no further action should be taken as the case will be referred for further investigation by relevant Immigration Enforcement Officers. In these cases, following consideration, Immigration Enforcement Officers will inform the bank what action to take.
Section 40A – Requirement to carry out immigration checks in relation to current accounts:
A bank or building society must, at such times or with such frequency as is specified in regulations carry out an immigration check in relation to each current account held with it that is not an excluded account.
Carrying out an “immigration check” in relation to a current account means checking whether, according to information supplied by the Secretary of State to a specified anti-fraud organisation or a specified data-matching authority, the account is operated by or for a disqualified person.
A “disqualified person” is described as a person—
who is in the United Kingdom,
who requires leave to enter or remain in the United Kingdom but does not have it, and
for whom the Secretary of State considers that a current account should not be provided by a bank or building society.
An account is operated by or for a person or body if the person or body is an account holder or a signatory or identified as a beneficiary in relation to the account.
A bank or building society must—
make arrangements with a specified anti-fraud organisation or a specified data-matching authority for the purpose of enabling the bank or building society to carry out immigration checks in relation to current accounts, and
pay any reasonable fee required to be paid under those arrangements.
Section 40B – Requirement to notify existence of current accounts for disqualified persons:
Section 40B applies where, as a result of an immigration check carried out under section 40A, a bank or building society identifies a current account that is operated by or for a person who the bank or building society believes to be a disqualified person.
The bank or building society must as soon as reasonably practicable—
notify the Secretary of State that a current account held with it is operated by or for a person who it believes to be a disqualified person, and
provide the Secretary of State with such other information as may be prescribed.
Regulations may require the provision of information relating to any accounts held with the bank or building society that are operated by or for the person who is believed to be a disqualified person.
Should a holder of a current account be identified as being disqualified from operating an account by reason of their immigration status, the bank should notify the Home Office.
Section 40B of the Immigration Act 2014 sets out that firms will provide information concerning any account which is held with it by the person concerned, not just current accounts.
When notifying the Home Office of such accounts, firms are required by the Regulation to include: the date the check was carried out; the name, address and date of birth of the disqualified person; the type and current balance of each account held; a statement as to whether the disqualified person is the sole account holder, joint account holder, a signatory to the account, or a beneficiary to the account; information about regular payments of over £200 into accounts where the disqualified person is the sole or joint account holder; and any further information which the bank holds and considers to be relevant to the Secretary of State’s functions under the Immigration Act 2016.
Section 40C – Action to be taken by Secretary of State following section 40B notification:
Where the Secretary of State receives a notification from a bank or building society in relation to a person, the Secretary of State must check whether the person is a disqualified person.
If the Secretary of State determines that the person is a disqualified person, the Secretary of State may apply under section 40D for a freezing order in respect of one or more of the accounts held with the bank or building society that are operated by or for the disqualified person.
If the Secretary of State decides not to apply for a freezing order or decides to apply for a freezing order in respect of one or more but not all of the accounts held with the bank or building society that are operated by or for the disqualified person, the Secretary of State must notify the bank or building society that it is subject to the duty in section 40G(2) in relation to the disqualified person.
If the Secretary of State determines that the person is not a disqualified person, the Secretary of State must notify the bank or building society accordingly.
When Home Office Caseworkers receive a notification from the bank, and confirm the individual in question is disqualified, they will either: inform the relevant Immigration Enforcement Officers who may apply for a freezing order for some, depending on the circumstances of the particular case, or all of the accounts; or instruct the bank that they are subject to the duty to close any accounts it holds for that person, as soon as reasonably practicable in accordance with section 40G(2) of the Immigration Act 2014, which are not the subject of an application for a freezing order or subject to separate investigation or action. Banks must close accounts as soon as reasonably practicable. Banks may delay closure for a ‘reasonable’ period of time to recover debt or manage the impact on third parties. Banks can also comply with the duty without closing the account if they can take steps to prevent the account from being operated by the disqualified person.
Section 40D – Freezing orders:
On an application by the Secretary of State under section 40C(2), the court may make a freezing order in respect of any account specified in the application. The court means—
(a)in England and Wales, a magistrates’ court;
(b)in Scotland, the sheriff;
(c) in Northern Ireland, a court of summary jurisdiction;
A freezing order in respect of an account is an order that prohibits each person and body by or for whom the account is operated from making withdrawals or payments from the account.
A freezing order may be made subject to exceptions. An exception may (in particular)—
make provision for the disqualified person to meet his or her reasonable living expenses and reasonable legal expenses;
allow another person or body by or for whom the account is operated to make withdrawals or payments from the account.
An application for a freezing order may be made without notice.
The court may vary or discharge a freezing order made in respect of an account on an application made by—
the Secretary of State, or
a person or body by or for whom the account is operated.
If the Secretary of State applies for a freezing order in respect of an account and the order is not made, or the order is made but subsequently discharged, the Secretary of State must notify the bank or building society that it is subject to the duty in section 40G(2) in relation to the disqualified person.
For cases that Home office caseworkers consider should be subject to an application for a freezing order, once they have provided confirmation on a person’s status to the bank and instructed the bank that no further action should be taken, the caseworker will refer the match to relevant Immigration Enforcement Officers, who may apply to a court for a freezing order in respect of one or more of the accounts held by that person.
Using the factors set out in paragraphs 24 to 33 of the Immigration Act 2014 Code of Practice: Freezing Orders (bank accounts measures) , the Home Office caseworker will identify and prioritise cases for which application of a freezing order might be appropriate. The caseworker will not make the final decision on whether to apply for a freezing order, but will forward details to the relevant Immigration Enforcement Officers who will make a decision, taking into consideration the factors set out in paragraphs 24 to 33 of the Code.
Banks are required by the Regulations to notify the Home Office of prescribed information, including information about regular payments of over £200 into accounts where the disqualified person is the sole or joint account holder. Whether or not a decision is made to apply for a freezing order, if the information provided indicates that payments into accounts could constitute a salary or wages, the caseworker will make evidence of this available to Immigration Enforcement Officers to consider whether the person concerned has been working in the UK unlawfully. This information may also be shared with other government departments, law enforcement agencies and other bodies for their functions. Any onward disclosure of data will be in line with the provisions in the Data Protection Act 1998 and Human Rights Act 1998.
If the person is disqualified, but Immigration Enforcement Officers decide not to apply for a freezing order for some or all of the accounts held, because it would not be appropriate in the circumstances of the particular case, it will be the responsibility of the Immigration Enforcement Officers to instruct banks/building societies that they are subject to the duty to close any accounts it holds for that person, as soon as reasonably practicable in accordance with section 40G(2) of the Immigration Act 2014. Banks are able to delay closure for a reasonable period to recover debt or manage the effect on third parties. Banks can also comply with the duty without closing the account if they can take steps to prevent the account from being operated by the disqualified person. If an account is closed, any credit balance can be returned to the account holder as usual, in line with individual firms’ terms and conditions (unless it is under separate investigation or action).
When an application for a freezing order is made the court will grant, or as the case may be, refuse the application. If the application is refused, this will be confirmed by the relevant Immigration Enforcement Officers who will either instruct the bank that it is subject to the duty to close any accounts it holds for that person or inform the bank that it is not subject to the duty to close. For example, in considering a freezing order application, the court process may reveal circumstances about an individual’s personal life which results in the Home Office exercising its discretion over whether the individual is considered to be a disqualified person. In these circumstances, the Home Office would instruct the bank that it is not subject to the duty to close any accounts it holds for that person and the individual’s details would no longer be shared with firms.
Section 40D of the Immigration Act 2014 sets out that a freezing order will prohibit each person or body by or for whom the account is operated from making withdrawals or payments from the account. However, an order may be made subject to a provision for the disqualified person to meet his or her reasonable living expenses and reasonable legal expenses. The court may make whatever incidental or consequential orders it considers to be just, including the level of funds available to meet reasonable living and legal expenses. In the case of joint accounts it may also allow another person or body by or for whom the account is operated to make withdrawals or payments from the account.
The Home Office will apply for a freezing order in some cases rather than instructing the firm to close the account, because the balance in those cases is significant – over £1,000, but taking into consideration paragraphs 27 and 28 of the Immigration Act 2014 Code of Practice: Freezing Orders (bank accounts measures) or because the disqualified person is considered to be potentially capable of significant harm, as referenced in paragraphs 29 and 30 of the Code. In these cases it would not be a sufficient deterrent to close the account and return the balance to the holder. The holder should be deprived of the use of the balance (except for reasonable living and legal expenses) until such time as he or she leaves the UK. Once the disqualified person has left the UK the freezing order will be reviewed by the relevant Immigration Enforcement Officers, and acting on behalf of the Secretary of State, they will apply for the freezing order to be discharged or varied, under section 40D(6) of the Immigration Act 2014.
The following factors, as referenced in paragraphs 26-33 of the Code, should be taken into account when Home Office caseworkers consider whether to refer a case to Immigration Enforcement Officers for application of a freezing order. Caseworkers will also consider the subject’s previous record of immigration offending, their level of co-operation with the immigration system, and whether any notable difficulty has been encountered in effecting their removal.
Threshold:
The Home Office will not usually consider applying for a freezing order if the level of funds in a person’s combined bank accounts is less than £1,000. To do so would usually be disproportionate given the administrative and court costs of applying for an order and the need to permit access to funds to permit reasonable living and legal expenses. But there may be exceptions, as detailed in paragraphs 27 and 28 of the Code.
A freezing order will not be sought automatically where the level of funds in a person’s combined accounts is over £1,000, but in those cases the Home Office Caseworker will consider the particular circumstances of the case and a decision will be taken, by Immigration Enforcement Officers, on whether it is appropriate to seek a freezing order.
The Home Office will retain the discretion to apply for a freezing order where a disqualified person with a level of funds of less than £1,000 is considered to present a high risk of harm or criminality, taking into account the features outlined in paragraphs 29 and 30 of the Code in addition to the subject’s previous record of immigration offending and any difficulty encountered in effecting their removal.
Harm:
A decision on whether to apply for a freezing order should take into account the level of harm which an individual is reasonably suspected to pose, and the risk involved. In criminal cases a decision to freeze will take into account all the circumstances of the case, including the nature of the subject’s offending, the length of the sentence served, the individual’s cooperation with any attempts to re-document them for removal and the likely timetable for securing a subject’s removal.
Criminality:
Home Office caseworkers will refer matches involving criminal activity to relevant Immigration Enforcement Officers. However, even in those cases where the offending has been serious it might not be appropriate to freeze a person’s account(s) if the offender will be leaving the country promptly at the end of their sentence under an early release scheme.
It should be noted that individuals who have reached the stage at which their details could be shared with the specific anti-fraud organisation or data-matching authority are known immigration offenders and will already have had sufficient opportunity to raise any reason why they should be permitted to remain in the UK; they will either not have done so or they have and their application has been refused and all appeal rights have been exhausted.
Freezing orders may be applied for in family cases. The family’s circumstances and alleged vulnerability will have been taken into account in reaching the decision on whether to grant leave to remain in the country. If a refusal has been sustained there is no reason per se why a freezing order cannot be applied for; however, in a caseworker making their decision to forward details to the relevant Immigration Enforcement Officers, they will need to consider the factors outlined above on a case by case basis.
Freezing orders may be applied in cases where, for example, there is an overdraft in one account and a credit balance in another. When the freezing order is reviewed and discharged by the relevant Immigration Enforcement Officers (if appropriate), they will either instruct the bank that it is subject to the duty to close any accounts it holds for that person or inform the bank that it is not subject to the duty to close. Banks are able to delay closure for a reasonable period to recover debt or manage the effect on third parties. If when a freezing order is discharged the individual is no longer considered to be a disqualified person, their details will no longer be shared with banks.
Once pursuit of a freezing order is confirmed by Immigration Enforcement Officers, they will comply with the designated procedure in force at any given time for making such applications.
Acting on behalf of the Secretary of State, Immigration Enforcement Officers will review granted freezing orders every six months. The review will take into consideration all elements of the freezing order decision, including the harm which an individual is reasonably suspected to pose and the risk involved, as well as criminality and vulnerability factors.
Immigration Enforcement Officers will also automatically review a freezing order if it can be evidenced that the disqualified person has left the UK.
The Home Office will also retain the discretion to carry out reviews more frequently, on a case by case basis.
If it can be evidenced that the disqualified person has left the UK, the freezing order will be reviewed by relevant Immigration Enforcement Officers, and acting on behalf of the Secretary of State, they will apply for the freezing order to be discharged or varied, under section 40D(6) of the Immigration Act 2014. In these instances, the Home Office will write and notify the court. Even if all parties agree to apply for discharge/variation, the court will have to be satisfied and will make the overall decision.
When deciding whether to apply for a freezing order to be varied or discharged, the Home Office will retain the discretion to consider factors on a case by case basis where the disqualified person has not left the UK. For example, this might apply if the funds that are subject to the freezing order are subsequently evidenced as belonging to a non-disqualified person, or if further funds are identified that should be included in the freezing order.
If an account has been emptied by withdrawals for reasonable living and legal expenses and the disqualified person is still present in the UK, the Home Office may apply to the court for the freezing order to be discharged. Banks may be instructed by Immigration Enforcement Officers that they are subject to the duty to close any accounts which it holds for that person. Banks are able to delay closure for a reasonable period to recover debt or manage the effect on third parties. Banks can also comply with the duty without closing the account if they can take steps to prevent the account from being operated by, or for, the disqualified person.
If the disqualified person makes a further immigration application when a freezing order is in place, this will not automatically mean the Home Office will seek to have the freezing order discharged. The Home Office will retain discretion on a case by case basis to apply to the court for an order to be discharged or varied.
The purpose of obtaining a freezing order is to incentivise an individual’s voluntary departure from the UK, or their cooperation with the removal process. Subject to other legislative requirements and a review of the freezing order, Immigration Enforcement Officers will apply to the court to discharge a freezing order when a disqualified person whose account(s) have been frozen is known to have left the UK.
If an account is frozen, it will be unfrozen by discharge of the court order when the illegal migrant leaves the UK, following a review. Any credit can be returned to the account holder in line with individual firms’ terms and conditions.
Details of disqualified persons who have been removed from the UK or who are known to have left voluntarily will be retained by the specified anti-fraud organisation or data matching authority for anti-fraud purposes separate to the Immigration Acts 2014 and 2016, but they will be distinguished on those records to indicate that the person is no longer disqualified for immigration purposes. Measures in the Immigration Acts 2014 and 2016 do not create barriers to banks offering services to non-disqualified persons.
Section 40E – Freezing orders: appeals:
An appeal may be made to the relevant appeal court against a decision of a court under section 40D.
The right of appeal is exercisable by—
the Secretary of State, and
if the decision relates to a freezing order that is in force in respect of an account, a person or body by or for whom the account is operated.
On an appeal the relevant appeal court may make—
whatever orders are necessary to give effect to its determination of the appeal;
whatever incidental or consequential orders appear to it to be just.
The relevant appeal court means—
the Crown Court, where the decision appealed against is a decision of a magistrates’ court;
the Sheriff Appeal Court, where the decision appealed against is a decision of the sheriff;
a county court, where the decision appealed against is a decision of a court of summary jurisdiction.
The Immigration Act 2016 contains provisions for appeals. Both the Home Office and the person whose account is subject to a freezing order are able to appeal against a decision of a court to refuse or grant an order. If a bank closes an account, there is no right to appeal this decision; however, if despite all the checks a person still considers they are lawfully present, they can contact the Home Office so that any error in the Home Office’s records can be rectified. The Home Office will be able to correct any error in real time so that the person’s details will be immediately removed from the data which is shared with bank/building societies.
Section 40F – Freezing orders: code of practice:
The Secretary of State must issue a code of practice—
specifying the factors that the Secretary of State will consider when deciding whether to apply for a freezing order under section 40C(2),
outlining the arrangements for keeping a freezing order under review for the purpose of deciding whether to apply under section 40D(6) for its variation or discharge, and
specifying the factors that the Secretary of State will consider when deciding whether to make such an application.
The Secretary of State must from time to time review the code and may revise and re-issue it following a review.
The code (or revised code)—
may not be issued unless a draft has been laid before Parliament, and
comes into force in accordance with provision contained in regulations made by the Secretary of State.
The Code is made by the Secretary of State under section 40F of the Immigration Act 2014.
The purpose of the Code is to specify the factors caseworkers acting on behalf of the Secretary of State should consider when deciding whether to apply for a freezing order under section 40C(2) of the Immigration Act 2014 as amended by the Immigration Act 2016, or for the variation or discharge of a freezing order; and the arrangements for keeping a freezing order under review. It is intended to guide caseworkers when considering whether a freezing order should be applied for under section 40D or section 40E of the Immigration Act 2014.
The Code should not be regarded as a complete or authoritative statement of the law, which only the courts can give. However, the Code may be used as evidence in legal proceedings and courts will take account of any part of the Code which may be relevant.
The Code is made by the Secretary of State under section 40F of the Immigration Act 2014. Section 40F sets out that the Secretary of State must issue a code of practice, which may not be issued before a draft has been laid before Parliament, and which comes into force in accordance with provision contained in regulations made by the Secretary of State.
The Code will be reviewed from time to time in accordance with section40F of the Immigration Act 2014. A review will take place whenever it appears to the Secretary of State that an assessment of how these measures are operating in practice is necessary. Following review the Secretary of State may reissue the Code. A draft of the revised Code will be laid before Parliament before it is reissued. Section 45 of the Immigration Act 2016 also sets out that the Secretary of State must review the operation of the measures introduced by the Immigration Act 2016 and lay a copy of the report before Parliament before the end of five years, after the measures come fully into force.
The Code has been drafted to be used by caseworkers acting on behalf of the Secretary of State to assist them with decision making, and it is addressed to them, but it is also intended that it should be used by others who have an interest in the subject.
Section 40G- Closure of accounts not subject to freezing order:
The effect of Section 40G is explained below.
CLOSURE OR RESTRICTION OF ACCESS TO EXISTING CURENT ACCOUNT– SECTION 40G
Banks and building societies can close or restrict access to an existing account if a person is disqualified. This took effect on 30 October 2017 under section 40G of the Immigration Act 2014.
Section 40G applies where:
a bank or building society makes a notification to the Secretary of State that a current account held with it is operated by or for a person who it believes to be a disqualified person
the person is determined by the Secretary of State following a check to be a disqualified person, and
the bank or building society receives a notification in relation to the disqualified person.
The bank or building society must as soon as reasonably practicable closeeach account held with it that—
is operated by or for the disqualified person and is not the subject of an application for a freezing order;
is operated by or for the disqualified person and in respect of which a freezing order is not in force.
The bank or building society may delayclosing an account which it would otherwise be required to close under if at the time at which it would otherwise be required to close it—
the account is overdrawn, or
where the account is operated by or for the disqualified person and one or more bodies or other persons, the bank or building society considers that closing the account would significantly adversely affect the interests of any of those other bodies or persons.
Closure of the account may be delayed for such period as is reasonable (but not indefinitely).
Where the bank or building society closes an account in compliance with Section 40G it must tell each person or body by or for whom the account is operated, if it may lawfully do so, why it has closed the account.
Where the bank or building society prevents an account from being operated by or for the disqualified person, it must tell each person or body by or for whom the account is operated, if it may lawfully do so, why it has prevented the account from being operated by or for the disqualified person.
The bank or building society must provide the Secretary of State with information about the steps that it has taken to comply with Section 40G.
Banks and building societies are required to provide notification of compliance to the Financial Conduct Authority (FCA). The Regulations enable the FCA to supervise compliance in a proportionate way as part of their existing regulatory regime. This mirrors the existing role of the FCA for the Immigration Act 2014. Banks and building societies will also be under a legal obligation to report directly to the Home Office about the accounts they find, which will ensure visibility of compliance.
Relevant Regulations are as follows:
The Immigration Act 2016 (Commencement No. 5) Regulations 2017 No. 929 (C. 79)- These Regulations brought into force on 30 October 2017 Section 45 of, and Schedule 7 to, the Immigration Act 2016 regarding bank accounts.
Immigration Act 2014 (Current Accounts) (Freezing Orders: Code of Practice) Regulations 2017 No. 930- The Regulations brought into force on 30 October 2017, the code of practice entitled “Immigration Act 2014 Code of Practice: Freezing Orders (Bank Accounts Measures)”.
Immigration Act 2016 (Consequential Amendments) Regulations 2017 No. 931- These Regulations came into force on 30 October 2017 and amended the Payment Accounts Regulations 2015 (S.I. 2015/2038) in consequence of section 45(1) of, and Schedule 7 to, the Immigration Act 2016.
Immigration Act 2014 (Current Accounts) (Excluded Accounts and Notification Requirements) Regulations 2016 No. 1252- Coming into force on 30 October 2017, these Regulations prescribe current accounts excluded from; and information and manner and form requirements for the purposes of the statutory regime governing immigration checks of current accounts by banks and building societies set out in sections 40A to 40H of the Immigration Act 2014.
Immigration Act 2014 (Current Accounts) (Compliance &c) Regulations 2016 1073-Coming into force on 30 October 2017, these Regulations prescribe information, manner and form and timing requirements for the purposes of the statutory regime governing immigration checks of current accounts by banks and building societies under sections 40A to 40H of the Immigration Act 2014.
WHAT TO DO IF A BANK/BUILDING SOCIETY REFUSES AN APPLICATION FOR A CURRENT ACCOUNT OR CLOSES A CURRENT ACCOUNT
If a bank or building society refuses a persons’ application for a current account or closes their current account under the Immigration Act 2014, it will normally tell the person why. If a person believes that there has been a mistake, they should contact the Home Office with evidence of their lawful immigration status. If the person has a right to be in the UK, the Home Office will change their details so that they can re-apply to open a current account or re-open their existing account.
The relevant contact details for the Home Office are:
Complaints Allocation Hub, UK Visas and Immigration, 20 Wellesley Road, 7th Floor Lunar House, Croydon, CR9 2BY
Alternatively, a person can submit general correspondence by email to: public.enquiries@homeoffice.gsi.gov.uk
WHAT TO DO IF WRONGLY DISQUALIFIED FROM OPENING OR ACCESSING A ACCOUNT
The Home Office may refuse an application to open or access an account on the basis that the person does not have permission to enter or remain in the United Kingdom.
