PRACTICE DIRECTION – CIVIL RECOVERY PROCEEDINGS

PRACTICE DIRECTION – CIVIL RECOVERY PROCEEDINGS

                                                                                                                          
Contents of this Practice Direction
Title Number
Scope and Interpretation Para.1.1
SECTION I – GENERAL PROVISIONS
Venue Para.2.1
Use of pseudonyms by staff Para.3.1
SECTION II – CIVIL RECOVERY PROCEEDINGS UNDER PART 5 OF THE ACT OR PART 5 OF THE ORDER IN COUNCIL
Claim for a recovery order Para.4.1
Applications Para.5.1
Property freezing order or interim receiving order made before commencement of claim for recovery order Para.5A
Exclusions when making property freezing order or interim receiving order Para.5B.1
Interim receiving order or management receiving order: application for directions Para.6.1
Application to vary or set aside an order Para.7.1
Exclusions for the purpose of meeting legal costs: general provisions Para.7A.1
Assessment of costs where recovery order is made Para.7B.1
Registers Para.7C
SECTION III – APPLICATIONS UNDER PART 8 OF THE ACT IN RESPECT OF CIVIL RECOVERY INVESTIGATIONS AND DETAINED CASH INVESTIGATIONS
How to apply for an order or warrant Para.8.1
Confidentiality of court documents Para.9.1
Application notice and evidence Para.10.1
Hearing of the application Para.11.1
Variation or discharge of order or warrant Para.12.1
SECTION IV – FURTHER PROVISIONS ABOUT SPECIFIC APPLICATIONS UNDER PART 8 OF THE ACT
Production order Para.13.1
Search and seizure warrant Para.14.1
Disclosure order Para.15.1
Customer information order Para.16.1
Account monitoring order Para.17.1
ANNEX

Scope and Interpretation

1.1

Section I of this practice direction contains general provisions about proceedings in the High Court under Parts 5 and 8 of the Proceeds of Crime Act 2002 and Part 5 of the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005.

1.2

Section II contains provisions about applications to the High Court under Part 5 of the Act and Part 5 of the Order in Council for –

(a) a recovery order;

(b) a property freezing order;

(c) an interim receiving order;

(d) a management receiving order; and

(e) the registration of external orders.

1.3

Section III contains provisions about applications to the High Court under Part 8 of the Act for any of the following types of order or warrant in connection with a civil recovery investigation or a detained cash investigation –

(a) a production order;

(b) a search and seizure warrant;

(c) a disclosure order;

(d) a customer information order; and

(e) an account monitoring order.

1.4

Section IV of this practice direction contains further provisions about applications for each of the specific types of order and warrant listed in paragraph 1.3 above.

1.5

In this practice direction –

(1) ‘the Act’ means the Proceeds of Crime Act 2002;

(1A) ‘appropriate officer’ has the meaning set out in section 378 of the Act;

(2) ‘enforcement authority’ has the meaning set out in section 316 of the Act;

(3) ‘the Order in Council’ means the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005;

(4) ‘civil recovery proceedings’ means proceedings under Part 5 of the Act or Part 5 of the Order in Council (as appropriate);

(4A) ‘'interim receiving order’ has the meaning set out in section 246 of the Act;

(4B) ‘management receiving order’ means an order to appoint a receiver under section 245E of the Act;

(4C) ‘property freezing order’ has the meaning set out in section 245A of the Act;

(5) ‘the Regulations’ means the Proceeds of Crime Act 2002 (Legal Expenses in Civil Recovery Proceedings) Regulations 2005;

(5A) ‘relevant Director’ has the meaning set out in section 352(5A) of the Act;

(5B) ‘CPR’ means the Civil Procedure Rules 1998; and

(6) other expressions used have the same meaning as in the Act or the Order in Council (as appropriate).

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SECTION I – GENERAL PROVISIONS

Venue

2.1

Except as otherwise provided in paragraph 2.2, an application made to the High Court under Part 5 or Part 8 of the Act or Part 5 of the Order in Council must be made in the Administrative Court.

2.2

A claim for a recovery order must be started in the Central Office of the Queen's Bench Division. Where a claim for a recovery order has been issued, any interim proceedings preserving the property which is the subject of the claim will be transferred to the Central Office of the Queen's Bench Division.

2.3

The preceding paragraph does not limit the power of the High Court to transfer claims or applications to or from the Central Office of the Queen's Bench Division, Administrative Court, Chancery Division or specialist list of the High Court.

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Use of pseudonyms by staff

3.1

If a member of the staff of the relevant Director gives written or oral evidence in any proceedings using a pseudonym in accordance with section 449 or section 449A of the Act –

(1) the court must be informed that the witness is using a pseudonym; and

(2) a certificate under section 449(3) or 449A(3) (as appropriate) of the Act must be filed or produced.

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SECTION II – CIVIL RECOVERY PROCEEDINGS UNDER PART 5 OF THE ACT OR PART 5 OF THE ORDER IN COUNCIL

Claim for a recovery order

4.1

A claim by the enforcement authority for a recovery order must be made using the CPR Part 8 procedure.

4.2

In a claim for a recovery order based on an external order, the claim must include an application to register the external order.

4.3

The claim form must –

(1) identify the property in relation to which a recovery order is sought;

(2) state, in relation to each item or description of property –

(a) whether the property is alleged to be recoverable property or associated property; and

(b) either –

(i) who is alleged to hold the property; or

(ii) where the enforcement authority is unable to identify who holds the property, the steps that have been taken to try to establish their identity;

(3) set out the matters relied upon in support of the claim;

(4) give details of the person nominated by the enforcement authority to act as trustee for civil recovery in accordance with section 267 of the Act or article 178 of the Order in Council; and

(5) in a claim which includes an application to register an external order, be accompanied by a copy of the external order.

4.4

The evidence in support of the claim must include the signed, written consent of the person nominated by the enforcement authority to act as trustee for civil recovery if appointed by the court.

4.5

In a claim which includes an application to register an external order, where –

(1) the sum specified in the external order is expressed in a currency other than sterling; and

(2) there are not funds held in the United Kingdom in the currency in which the sum specified is expressed sufficient to satisfy the external order,

the claim form, or particulars of claim if served subsequently, must state the sterling equivalent of the sum specified.

(Article 145(2) of the Order in Council provides that the sterling equivalent is to be calculated in accordance with the exchange rate prevailing at end of the day on which the external order is made.)

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Applications

5.1

An application for a property freezing order, an interim receiving order or a management receiving order must be made –

(1) to a High Court judge; and

(2) in accordance with CPR Part 23.

5.2

CPR rule 23.10(2) and Section I of CPR Part 25 do not apply to applications for property freezing orders, interim receiving orders and management receiving orders.

5.3

The application may be made without notice in the circumstances set out in –

(1) section 245A(3) of the Act and article 147(3) of the Order in Council (in the case of an application for a property freezing order);

(2) section 246(3) of the Act and article 151(3) of the Order in Council (in the case of an application for an interim receiving order); or

(3) section 245E of the Act and the Order in Council (in the case of an application for a management receiving order).

5.4

An application for a property freezing order must be supported by written evidence which must –

(1) set out the grounds on which the order is sought; and

(2) give details of each item or description of property in respect of which the order is sought, including

(a) an estimate of the value of the property; and

(b) the additional information referred to in paragraph 5.5(2).

5.5

CPR Part 69 (court’s power to appoint a receiver) and Practice Direction 69 apply to an application for an interim receiving order with the following modifications –

(1) paragraph 2.1 of Practice Direction 69 does not apply;

(2) the enforcement authority’s written evidence must, in addition to the matters required by paragraph 4.1 of that practice direction, also state in relation to each item or description of property in respect of which the order is sought –

(a) whether the property is alleged to be –

(i) recoverable property; or

(ii) associated property,

and the facts relied upon in support of that allegation; and

(b) in the case of any associated property –

(i) who is believed to hold the property; or

(ii) if the enforcement authority is unable to establish who holds the property, the steps that have been taken to establish their identity; and

(3) the enforcement authority’s written evidence must always identify a nominee and include the information in paragraph 4.2 of that practice direction.

5.5A

Paragraph 2.1 of Practice Direction 69 does not apply to an application for a management receiving order.

5.6

Where an application is made for an interim receiving order or management receiving order, a draft of the order which is sought must be filed with the application notice. This should if possible also be supplied to the court in an electronic form compatible with the word processing software used by the court.

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Property freezing order or interim receiving order made before commencement of claim for recovery order

5A

A property freezing order or interim receiving order which is made before a claim for a recovery order has been commenced will –

(1) specify a period within which the enforcement authority must either start the claim or apply for the continuation of the order while he carries out his investigation; and

(2) provide that the order will be set aside if the enforcement authority does not start the claim or apply for its continuation before the end of that period.

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Exclusions when making property freezing order or interim receiving order

5B.1

When the court makes a property freezing order or interim receiving order on an application without notice, it will normally make an initial exclusion from the order for the purpose of enabling the respondent to meet his reasonable legal costs so that he may –

(1) take advice in relation to the order;

(2) prepare a statement of assets in accordance with paragraph 7A.3; and

(3) if so advised, apply for the order to be varied or set aside.

The total amount specified in the initial exclusion will not normally exceed £3,000.

5B.2

When it makes a property freezing order or interim receiving order before a claim for a recovery order has been commenced, the court may also make an exclusion to enable the respondent to meet his reasonable legal costs so that (for example) when the claim is commenced –

(1) he may file an acknowledgment of service and any written evidence on which he intends to rely; or

(2) he may apply for a further exclusion for the purpose of enabling him to meet his reasonable costs of the proceedings.

5B.3

Paragraph 7A contains general provisions about exclusions made for the purpose of enabling a person to meet his reasonable legal costs.

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Interim receiving order or management receiving order: application for directions

6.1

An application for directions as to the exercise of the functions of –

(1) the interim receiver under section 251 of the Act or article 156 of the Order in Council; or

(2) the management receiver under section 245G of the Act or under the Order in Council,

may be made at any time by –

(a) the interim receiver or management receiver, as appropriate;

(b) any party to the proceedings; and

(c) any person affected by any action taken, or proposed to be taken, by the interim receiver or management receiver.

6.2

The application must always be made by application notice, which must be served on –

(1) the interim receiver or management receiver, as appropriate, (unless he is the applicant);

(2) every party to the proceedings; and

(3) any other person who may be interested in the application.

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Application to vary or set aside an order

7.1

An application to vary or set aside a property freezing order, an interim receiving order or a management receiving order (including an application for, or relating to, an exclusion from the order) may be made at any time by –

(1) the enforcement authority; or

(2) any person affected by the order.

7.2

Unless the court otherwise directs or exceptional circumstances apply, a copy of the application notice must be served on –

(1) every party to the proceedings;

(2) in the case of an application to vary or set aside an interim receiving order or management receiving order, the interim receiver or management receiver (as appropriate); and

(3) any other person who may be affected by the court’s decision.

7.3

The evidence in support of an application for an exclusion from a property freezing order or interim receiving order for the purpose of enabling a person to meet his reasonable legal costs must –

(1) contain full details of the stage or stages in civil recovery proceedings in respect of which the costs in question have been or will be incurred;

(2) include an estimate of the costs which the person has incurred and will incur in relation to each stage to which the application relates, substantially in the form illustrated in Precedent for Estimate of Costs in relation to Civil Recovery (Precedent Q);

(3) include a statement of assets containing the information set out in paragraph 7A.3 (unless the person has previously filed such a statement in the same civil recovery proceedings and there has been no material change in the facts set out in that statement);

(4) where the court has previously made an exclusion in respect of any stage to which the application relates, explain why the person’s costs will exceed the amount specified in the exclusion for that stage; and

(5) state whether the terms of the exclusion have been agreed with the enforcement authority.

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Exclusions for the purpose of meeting legal costs: general provisions

7A.1

Subject to paragraph 7A.2, when the court makes an order or gives directions in civil recovery proceedings it will at the same time consider whether it is appropriate to make or vary an exclusion for the purpose of enabling any person affected by the order or directions to meet his reasonable legal costs.

 7A.1A

To enable the court to consider whether it is appropriate to make or vary an exclusion, the court may order a party to file an estimate of costs (unless the person has previously filed such an estimate in the same civil recovery proceedings and there has been no material change in the facts set out in that estimate).

7A.2

The court will not make an exclusion for the purpose of enabling a person to meet his reasonable legal costs, other than an exclusion to meet the costs of taking any of the steps referred to in paragraph 5B.1, unless that person has made and filed a statement of assets.

7A.3

A statement of assets is a witness statement which sets out all the property which the maker of the statement owns, holds or controls, or in which he has an interest, giving the value, location and details of all such property. Information given in a statement of assets under this practice direction will be used only for the purpose of the civil recovery proceedings.

7A.4

The court –

(1) will not make an exclusion for the purpose of enabling a person to meet his reasonable legal costs (including an initial exclusion under paragraph 5B.1); and

(2) may set aside any exclusion which it has made for that purpose or reduce any amount specified in such an exclusion,

if it is satisfied that the person has property to which the property freezing order or interim receiving order does not apply from which he may meet those costs.

7A.5

The court will normally refer to a costs judge any question relating to the amount which an exclusion should allow for reasonable legal costs in respect of proceedings or a stage in proceedings.

7A.6

Attention is drawn to section 245C of the Act and article 149 of the Order in Council (in relation to exclusions from property freezing orders) and to section 252 of the Act and article 157 of the Order in Council (in relation to exclusions from interim receiving orders). An exclusion for the purpose of enabling a person to meet his reasonable legal costs must be made subject to the ‘required conditions’ specified in Part 2 of the Regulations.

7A.7

An exclusion made for the purpose of enabling a person to meet his reasonable legal costs will specify –

(1) the stage or stages in civil recovery proceedings to which it relates;

(2) the maximum amount which may be released in respect of legal costs for each specified stage; and

(3) the total amount which may be released in respect of legal costs pursuant to the exclusion.

7A.8

A person who becomes aware that his legal costs –

(1) in relation to any stage in civil recovery proceedings have exceeded or will exceed the maximum amount specified in the exclusion for that stage; or

(2) in relation to all the stages to which the exclusion relates have exceeded or will exceed the total amount that may be released pursuant to the exclusion,

should apply for a further exclusion or a variation of the existing exclusion as soon as reasonably practicable.

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Assessment of costs where recovery order is made

7B.1

Where the court –

(1) makes a recovery order in respect of property which was the subject of a property freezing order or interim receiving order; and

(2) had made an exclusion from the property freezing order or interim receiving order for the purpose of enabling a person to meet his reasonable legal costs,

the recovery order will make provision under section 266(8A) of the Act or article 177(10) of the Order in Council (as appropriate) for the payment of those costs.

7B.2

Where the court makes a recovery order which provides for the payment of a person's reasonable legal costs in respect of civil recovery proceedings, it will at the same time order the detailed assessment of those costs. Parts 4 and 5 of the Regulations CPR, Part 47 as modified by Parts 4 and 5 of the Regulations and paragraphs 7B.3 to 7B.7 of this Practice Direction (“the civil recovery costs provisions”) apply to a detailed assessment pursuant to such an order.

7B.3   

In detailed assessment proceedings to which the civil recovery costs provisions apply-

(1)    the paying party is the trustee for civil recovery;

(2)    the receiving party is the person whose reasonable legal costs are payable pursuant to provision made in the recovery order under section 266(8A) of the Act or article 177(10) of the Order in Council; and

(3)    the relevant persons for the purpose of rule 47.6(2) includes the enforcement authority or the appropriate officer in addition to the persons referred to in paragraph 5.5 of Practice Direction 47 - Procedure for Detailed Assessment of Costs and Default Provisions.

7B.4   

On commencing detailed assessment proceedings, the receiving party must, in addition to serving the documents listed in paragraph 5.2 of Practice Direction 47 on the paying party and all other relevant persons, serve a statement giving the date, amount and source of all interim payments which have been released in respect of any of those costs under Part 3 of the Regulations.

7B.5   

By virtue of regulation 13(2) of the Regulations, detailed assessment proceedings must be commenced not later than 2 months after the date of the recovery order, and a request for a detailed assessment hearing must be filed not later than 2 months after the expiry of the period for commencing the detailed assessment proceedings.

7B.6   

The documents which must accompany the request for a detailed assessment hearing must included copies of all exclusions from property freezing orders or interim freezing orders made by the court for the purpose of enabling the receiving party to meet the costs which are to be assessed, and of every estimate of costs filed in relation to such an exclusion.

7B.7   

The receiving party’s costs will be assessed on the standard basis, subject to Part 5 of the Regulations (and in particular regulation 17, which specifies the hourly rates which may be allowed). Attention is also drawn to regulation 14, which provides that the amounts of any interim payments released in respect of the receiving party’s costs will be deducted from the costs allowed in accordance with Part 5 of the Regulations.

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Registers

7C

There will be kept in the Central Office of the Senior Courts at the Royal Courts of Justice, under the direction of the Senior Master, a register of external orders which the High Court has ordered to be registered.

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SECTION III – APPLICATIONS UNDER PART 8 OF THE ACT IN RESPECT OF CIVIL RECOVERY INVESTIGATIONS AND DETAINED CASH INVESTIGATIONS

How to apply for an order or warrant

8.1

An application for an order or warrant under Part 8 of the Act in connection with a civil recovery investigation or (where applicable) a detained cash investigation must be made –

(1) to a High Court judge;

(2) by filing an application notice.

8.2

The application may be made without notice.

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Confidentiality of court documents

9.1

CPR rules 5.4, 5.4B and 5.4C do not apply to an application under Part 8 of the Act, and paragraphs 9.2 and 9.3 below have effect in its place.

9.2

When an application is issued, the court file will be marked ‘Not for disclosure’ and, unless a High Court judge grants permission, the court records relating to the application (including the application notice, documents filed in support, and any order or warrant that is made) will not be made available by the court for any person to inspect or copy, either before or after the hearing of the application.

9.3

An application for permission under paragraph 9.2 must be made on notice to the appropriate officer in accordance with CPR Part 23.

(CPR rule 23.7(1) requires a copy of the application notice to be served as soon as practicable after it is filed, and in any event at least 3 days before the court is to deal with the application.)

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Application notice and evidence

10.1

The application must be supported by written evidence, which must be filed with the application notice.

10.2

The evidence must set out all the matters on which the appropriate officer relies in support of the application, including any matters required to be stated by the relevant sections of the Act, and all material facts of which the court should be made aware.

10.3

There must also be filed with the application notice a draft of the order sought. This should if possible also be supplied to the court on disk in a form compatible with the word processing software used by the court.

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Hearing of the application

11.1

The application will be heard and determined in private, unless the judge hearing it directs otherwise.

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Variation or discharge of order or warrant

12.1

An application to vary or discharge an order or warrant may be made by –

(1) the appropriate officer; or

(2) any person affected by the order or warrant.

12.2

An application under paragraph 12.1 to stop an order or warrant from being executed must be made immediately upon it being served.

12.3

A person applying to vary or discharge a warrant must first inform the appropriate officer that he is making the application.

12.4

The application should be made to the judge who made the order or issued the warrant or, if he is not available, to another High Court judge.

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SECTION IV – FURTHER PROVISIONS ABOUT SPECIFIC APPLICATIONS UNDER PART 8 OF THE ACT

Production order

13.1

The application notice must name as a respondent the person believed to be in possession or control of the material in relation to which a production order is sought.

13.2

The application notice must specify –

(1) whether the application is for an order under paragraph (a) or (b) of section 345(4) of the Act;

(2) the material, or description of material, in relation to which the order is sought; and

(3) the person who is believed to be in possession or control of the material.

13.3

An application under section 347 of the Act for an order to grant entry may be made either –

(1) together with an application for a production order; or

(2) by separate application, after a production order has been made.

13.4

An application notice for an order to grant entry must –

(1) specify the premises in relation to which the order is sought; and

(2) be supported by written evidence explaining why the order is needed.

13.5

A production order, or an order to grant entry, must contain a statement of the right of any person affected by the order to apply to vary or discharge the order.

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Search and seizure warrant

14.1

The application notice should name as the respondent the occupier of the premises to be subject to the warrant, if known.

14.2

The evidence in support of the application must state –

(1) the matters relied on by the appropriate officer to show that one of the requirements in section 352(6) of the Act for the issue of a warrant is satisfied;

(2) details of the premises to be subject to the warrant, and of the possible occupier or occupiers of those premises;

(3) the name and position of the member of the staff of the appropriate officer who it is intended will execute the warrant.

14.3

There must be filed with the application notice drafts of –

(1) the warrant; and

(2) a written undertaking by the person who is to execute the warrant to comply with paragraph 13.8 of this practice direction.

14.4

A search and seizure warrant must –

(1) specify the statutory power under which it is issued and, unless the court orders otherwise, give an indication of the nature of the investigation in respect of which it is issued;

(2) state the address or other identification of the premises to be subject to the warrant;

(3) state the name of the member of the staff of the appropriate officer who is authorised to execute the warrant;

(4) set out the action which the warrant authorises the person executing it to take under the relevant sections of the Act;

(5) give the date on which the warrant is issued;

(6) include a statement that the warrant continues in force until the end of the period of one month beginning with the day on which it is issued;

(7) contain a statement of the right of any person affected by the order to apply to discharge or vary the order.

14.5

An example of a search and seizure warrant is annexed to this practice direction. This example may be modified as appropriate in any particular case.

14.6

Rule 40.2 applies to a search and seizure warrant.

(CPR rule 40.2 requires every judgment or order to state the name and judicial title of the person making it, to bear the date on which it is given or made, and to be sealed by the court.)

14.7

Upon the issue of a warrant the court will provide to the appropriate officer –

(1) the sealed warrant; and

(2) a copy of it for service on the occupier or person in charge of the premises subject to the warrant.

14.8

A person attending premises to execute a warrant must, if the premises are occupied produce the warrant on arrival at the premises, and as soon as possible thereafter personally serve a copy of the warrant and an explanatory notice on the occupier or the person appearing to him to be in charge of the premises.

14.9

The person executing the warrant must also comply with any order which the court may make for service of any other documents relating to the application.

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Disclosure order

15.1

The application notice should normally name as respondents the persons on whom the appropriate officer intends to serve notices under the disclosure order sought.

15.2

A disclosure order must –

(1) give an indication of the nature of the investigation for the purposes of which the order is made;

(2) set out the action which the order authorises the appropriate officer to take in accordance with section 357(4) of the Act;

(3) contain a statement of –

(a) the offences relating to disclosure orders under section 359 of the Act; and

(b) the right of any person affected by the order to apply to discharge or vary the order.

15.3

Where, pursuant to a disclosure order, the appropriate officer gives to any person a notice under section 357(4) of the Act, he must also at the same time serve on that person a copy of the disclosure order.

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Customer information order

16.1

The application notice should normally (unless it is impracticable to do so because they are too numerous) name as respondents the financial institution or institutions to which it is proposed that an order should apply.

16.2

A customer information order must –

(1) specify the financial institution, or description of financial institutions, to which it applies;

(2) state the name of the person in relation to whom customer information is to be given, and any other details to identify that person;

(3) contain a statement of –

(a) the offences relating to disclosure orders under section 366 of the Act; and

(b) the right of any person affected by the order to apply to discharge or vary the order.

16.3

Where, pursuant to a customer information order, the appropriate officer gives to a financial institution a notice to provide customer information, he must also at the same time serve a copy of the order on that institution.

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Account monitoring order

17.1

The application notice must name as a respondent the financial institution against which an account monitoring order is sought.

17.2

The application notice must –

(1) state the matters required by section 370(2) and (3) of the Act; and

(2) give details of –

(a) the person whose account or accounts the application relates to;

(b) each account or description of accounts in relation to which the order is sought, including if known the number of each account and the branch at which it is held;

(c) the information sought about the account or accounts;

(d) the period for which the order is sought;

(e) the manner in which, and the frequency with which, it is proposed that the financial institution should provide account information during that period.

17.3

An account monitoring order must contain a statement of the right of any person affected by the order to apply to vary or discharge the order.

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