HM Treasury Given Powers To Freeze Cyber Criminal Assets

Any individual or business suspected of having ties to cyber crime can legally have their assets in the UK frozen from today.

The UK Cyber Attacks (Asset-Freezing) Regulation 2019 came into force this morning, Tuesday June 11, as the UK implement the EU’s Cyber-Attacks Regulation.

Essentially, the EU Council Regulation 2019/796 allows HM Treasury to freeze the assets of persons or entities suspected of carrying out a cyber attack, even if the attack was completed outside of the UK.

Additionally, HM Treasury have the right to restrict the business interactions of UK nationals or UK-incorporated entities with anyone suspected of cyber related fraud (designated person). This will include receiving funds from a designated person’s account.

Any UK national or entity interacting with a person or entity suspected of cyber crime could be in breach of new UK regulations, with fines and legal action an available option to HM Treasury in cases of non-compliance.

HM Treasury will only need to suspect or have reasonable cause that a person or entity has committed a cyber attack or those within the UK have provided support to cyber criminals for any convictions to be lodged.

According to EU regulation (2019/796), HM Treasury is able to lodge an offence with any person or entity:

  • responsible for cyber-attacks or attempted cyber-attacks;
  • providing financial, technical or material support for or are otherwise involved in cyber attacks or attempted cyber-attacks, including by planning, preparing, participating in, directing, assisting or encouraging such attacks, or facilitating them whether by action or omission; or
  • associated with the natural or legal persons, entities or bodies covered by points (a) and (b).

Any designated person, whether it be a person accused of money laundering or those suspected of supporting cyber criminality should expect more rigorous investigations as HM Treasury’s powers increase. Any person, or resident of the UK will be forced to provide information that will help in any HM Treasury investigation. Failure to comply could also result in prosecution.

Currently, HM Treasury are yet to list any person or entity as a designated person. As the new legislation comes into force, it is hoped that the government are able to reduce the suspected £100 billion per year lost to money laundering and that the increased powers will be used effectively.

How important could this legislation be in the fight against money laundering?