Three different effects
In FATF terminology, freezing prevents specified dealings with property while the measure applies. Seizure also permits an authority or court to take control. Freezing or seizure alone does not transfer ownership to the state.
Confiscation, also called forfeiture, permanently removes property rights through legal authority. These are definitions of different powers, not a fixed sequence for every case.
Source: FATF: Freeze, seize, confiscation and non-conviction based confiscation.
Read the Australian power
Australian legislation uses specific terms and conditions. The Proceeds of Crime Act 2002 provides for restraining orders and different forfeiture orders. Some forfeiture powers do not require a criminal conviction.
For example, section 47 concerns conduct constituting serious offences and has its own conditions. Section 48 provides a separate conviction-based route. Neither route allows a business to decide for itself that a customer’s property is forfeited.
Source: Federal Register of Legislation: Sections 19, 47 and 48.
- Freeze
Restrict dealings while the measure applies.
- Seize
Place the property under official control.
- Confiscate
Permanently remove property rights under legal authority.
Freezing, seizure and confiscation: the differences
Compare the legal effects. This is not a required sequence, and a temporary measure does not itself transfer ownership.
Separate evidence questions. An answer to one does not settle the others.
Example: the order controls the record
In a fictional training case, an asset record says only that funds are frozen. The reviewer obtains the relevant order or legal instrument. They identify which dealings it restricts, who controls the property and whether ownership has changed.
The reviewer does not assume that a temporary restriction proves guilt or permits transfer to another person. A later decision needs its own record.
Source: FATF: Freeze, seize and confiscation.
Keep sanctions separate
Sanctions can impose asset-freezing duties outside a proceeds-of-crime recovery case. Use the targeted financial sanctions article for that customer-control subject. Get advice on the applicable instrument before acting on a specific asset.
Source: AUSTRAC: Overview and what to do if a person is designated.