Asset Freeze and Account Blocking

The call usually comes from the accounts department: the business account will no longer take debits, transfers are bouncing, and the bank points to a measure taken by the prosecution. Behind it, as a rule, lies an asset freeze under Section 111e StPO. It hits companies harder than most other investigative measures, because it is not aimed at particular objects but at the ability to pay.

What an asset freeze is

The freeze secures the later confiscation of the value of proceeds. Where it is reasonable to assume that a sum will ultimately have to be recovered, movable and immovable assets of the person concerned may be tied up to secure enforcement (Section 111e(1) sentence 1 StPO). Where there are urgent grounds for that assumption, the freeze is to be ordered – discretion turns, in effect, into an obligation.

A freeze may also secure a fine and the costs of the proceedings, but only once a judgment has been handed down or a penalty order issued (Section 111e(2) StPO). During the investigation, then, it is always about recovery of proceeds rather than punishment.

The amount matters. The measure is what was obtained, calculated on the gross principle: expenses incurred for the offence are as a rule not deductible under Section 73d StGB. Frozen sums therefore regularly exceed by far what actually remained as profit – a point that can make proportionality open to attack.

Who orders it, and the deadline that runs

Jurisdiction lies with the court. Only where there is imminent danger may the prosecution order the freeze itself (Section 111j(1) StPO). If it does, it must apply for judicial confirmation within one week (Section 111j(2) sentence 1 StPO). That one-week deadline is not always observed in practice, and checking it is among the first things we do.

Independently of that, the person affected may at any time apply for a decision by the court with jurisdiction under Section 162 StPO. The freezing order itself can be challenged by way of complaint under Section 304 StPO.

The release sum – the overlooked subsection

The order must state not only the sum to be secured but also an amount which, if deposited, allows the person concerned to avert enforcement and demand that it be lifted (Section 111e(4) StPO). Whoever can raise that sum gets the account back. For companies that depend on day-to-day liquidity this is often the fastest route back to operating – and it appears in almost every order, yet is rarely used.

Where that amount has not been set, the order is defective. That, too, is a point of attack.

How the freeze plays out

It is enforced much like a civil security: attachment of accounts, registration of a security mortgage over land, attachment of movable property. As garnishee, the bank learns of the proceedings, which can affect credit lines and business relationships long before anything has been decided on the allegation itself.

The freeze is not confined to the accused. Under Section 73b StGB, confiscation may also be directed at third parties – a company, for instance, that benefited from an offence committed by its managing director. The entity affected is then one against which no investigation is running at all.

What has to be settled in the first few days

First the scope: which accounts are covered, for what amount, from when? Then continuity – wages, rent and social security contributions keep falling due, and a fully blocked account leads to insolvency within weeks, with the familiar consequences for the management. On these questions an arrangement with the prosecution can often be reached faster than through the courts.

In parallel we examine how the alleged proceeds were calculated. At the investigation stage, frozen sums frequently rest on rough estimates, such as extrapolated turnover figures. A solid counter-calculation is more effective at this point than argument about the allegation itself, which will be decided later in any event.

What you should do now

Obtain the order if you do not have it; the bank has seen it. Check the date on which the prosecution ordered the freeze and the date it reached the court – the one-week rule in Section 111j(2) StPO is a hard requirement. Put together the payments that cannot wait, with amounts and due dates. And do not discuss the facts while the file is unavailable; a freeze is a securing measure, not an opportunity to clear things up.

We review the order, the deadline and the calculation, apply to have the freeze lifted or narrowed, and negotiate the release sum. Days count in these cases: +49 228 504 463 36.

This sets out the statutory framework. Whether a freeze can be lifted or narrowed depends on the order, on how the proceeds were calculated and on the financial circumstances of the individual case.

This information does not replace a review of the individual case. In criminal proceedings, the defense strategy depends substantially on the case file, the specific allegation and the evidence.