The High Court has set clear limits on how the Financial Intelligence Authority (FIA) can freeze bank accounts, ruling that such actions must be backed by solid evidence and quickly approved by a court.
In a decision delivered by Justice Isaac Teko, the Civil Division emphasized that while the FIA has the power to act on suspected money laundering, it cannot do so arbitrarily. The judge said any freeze must be based on credible, objective evidence and followed without delay by judicial oversight.
The ruling came after a case filed by BMS General Trading against the FIA and the Attorney General. The company challenged the freezing of its bank account, arguing the move was unfair and lacked proper justification.
Court records showed that BMS had received $221,000 from a grain sale in 2024. However, more than a year later, the FIA instructed the bank to freeze the account, citing suspicions of money laundering linked to a notice from the Office of the Director of Public Prosecutions.
BMS protested the decision after failing to get a clear explanation from both the FIA and the bank. The company maintained that the transaction was legitimate and supported by invoices and receipts.
Although the FIA defended its actions under the Anti-Money Laundering Act, the court disagreed. It found that the authority acted unlawfully, irrationally, and without following proper procedures.
Justice Teko pointed out that the FIA failed to show any connection between the funds and criminal activity. He also noted that no charges had been brought against BMS, and that the authority only sought court approval after the company had already taken legal action.
The court further ruled that keeping the account frozen for such a long period without judicial approval unfairly denied the company access to its money.
While acknowledging that giving prior notice could interfere with investigations, the judge stressed that safeguards must come immediately after any freeze. He stated that concerns about national security or protecting the financial system do not remove the need for transparency and accountability.
Although no exact timeline was set, the court made it clear that judicial approval must be sought promptly in all such cases.
