Updated
GL-A-03
Glossary · Due Diligence and compliance
Asset freeze
An asset freeze — blocking access to a person money and property without seizing them, usually as a sanctions or precautionary measure.
01 / In 30 seconds
The short answer
- What it is
- An asset freeze — blocking access to money and property without seizing it
- How it works
- The assets remain, but they cannot be disposed of
- Reason
- Most often sanctions against a specific person
- During checks
- Sanctions status is a serious deal-breaker
- How to use it
- Check your sanctions status in advance
02 / In plain words
What Asset freeze means
An asset freeze is a restrictive measure under which a person or company is blocked from accessing their money and property: accounts cannot be used, and assets cannot be sold, transferred or otherwise disposed of. An important nuance: a freeze is not confiscation. The assets formally remain the person’s property but become “frozen” — unavailable for transactions.
An asset freeze is most often a sanctions measure: when a person or company is placed on a sanctions list (OFAC, the EU, the UN, for example), their assets in the jurisdiction concerned are blocked, usually together with an entry ban and other restrictions. Less often a freeze is an interim measure in court or investigative proceedings. In any case it is a serious restriction on the right to dispose of property.
In investment migration and bank compliance the subject relates above all to sanctions: a person whose assets are frozen under sanctions will not be able to open an account or obtain citizenship in a reputable programme. The sanctions check in due diligence always reveals such status. We check clients’ sanctions position in advance so that such obstacles do not arise unexpectedly, and help sort out contentious situations.
A case from practice
Before an application for citizenship, we check the client’s sanctions status and make sure that their assets are not frozen and that they are not on sanctions lists. This removes the main risk before the start. Had a match come up, we would have sorted it out in advance, not at the moment of the programme’s refusal.
Where the subject of freezes matters
- Sanctions checks in due diligence
- Opening bank accounts
- Sanctions risk assessment
- International transactions with assets
- Checking before applying for citizenship
- Sorting out contentious situations
03 / What it covers
What matters about an asset freeze
What it is
- Blocked access
- Cannot be disposed of
- Not confiscation
Reasons
- Most often — sanctions
- Less often — a court measure
- Sanctions lists
Effect
- Accounts unavailable
- Assets cannot be sold
- Together with other measures
In due diligence
- Sanctions are a deal-breaker
- The check will reveal it
- Contentious cases can be sorted out
04 / How it works
How to take this risk into account
Check your sanctions status
Assess whether there are restrictions
Sort out contentious situations
Legal work
A clean status or a strategy
05 / Key facts
What you need to know
01
An asset freeze blocks access without seizure
02
The assets remain the person’s property but are unavailable for transactions
03
It is most often a sanctions measure
04
It usually comes together with an entry ban and other restrictions
05
Sanctions status is a serious deal-breaker in DD
Common mistakes
- Confusing an asset freeze with confiscation
- Not checking your sanctions status in advance
- Concealing sanctions restrictions — the check will find them
- Underestimating the related measures (an entry ban)
- Applying for citizenship while under active sanctions
06 / Expert advice
How to prepare in advance
Sanctions status is checked in advance, before applying for citizenship or opening an account: whether the person is on sanctions lists and whether their assets are linked to restrictions. If the status is contentious or it is a false match, the situation is sorted out with legal support. Applying while under active sanctions is pointless. We carry out such a check so that obstacles do not arise unexpectedly.
What we do for you. We check clients’ sanctions position in advance, including the risks of an asset freeze, so that such obstacles do not arise unexpectedly in due diligence. In contentious situations and with false matches we help sort things out with legal support. That way you go into the programme with a clean and clear status.
Klara RihterBanking compliance and source of funds specialist
07 / Questions
Frequently asked questions
A restrictive measure under which access to money and property is blocked: they cannot be disposed of. The assets remain the person’s property but become unavailable for transactions.
No. With confiscation property is seized, whereas with a freeze it remains the person’s property — it is simply blocked from use. They are different measures.
Most often it is a sanctions measure: on inclusion in a sanctions list, assets in the jurisdiction concerned are blocked. Less often it is an interim measure in court proceedings.
A person whose assets are frozen under sanctions will not be able to obtain citizenship in a reputable programme or open an account. Sanctions status is a serious deal-breaker.
Usually, yes: a sanctions asset freeze is often accompanied by an entry ban and other restrictions against the same person.
Check your sanctions status in advance, before applying. We carry out such a check and, in contentious situations or with false matches, help sort things out.
INITIAL ASSESSMENT
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