Treating the Seizure of a Legal Entity’s Bank Account Funds as a “Frozen” or “Blocked” Bank Account Is Unlawful: Prosecutor’s Office Upholds Defense Complaint

In criminal proceedings, it is common for investigative authorities to order the seizure of funds held in a legal entity’s bank account. Following such decisions, courts are often asked to review and confirm the legality of the seizure, and judicial decisions are subsequently issued approving those measures.

In practice, however, an additional problem frequently arises. A legal entity’s bank account is effectively treated as “frozen” or “blocked,” preventing the company from accessing funds deposited into the account after the seizure order, including revenues generated through ongoing lawful business activities. As a result, restrictions are imposed not only on the funds specifically subject to seizure, but also on funds that were never reviewed or authorized for restriction by a court.

In one such criminal case, the investigative authority ordered the seizure of funds held in a legal entity’s bank account. The company continued its business operations, and additional lawful income was deposited into the same account. Nevertheless, the company was unable to use those funds because the bank account was effectively treated as blocked.

Attorney Gurgen Nersisyan of LSA Law Office challenged the investigator’s decision, refusing the relevant motion. Following review of the complaint, the Prosecutor’s Office upheld the defense position and instructed the investigator to remove the unlawful restrictions imposed on the legal entity’s bank accounts.

The Prosecutor’s Office confirmed several important legal principles:

1. a) Armenian criminal procedure legislation does not provide for the seizure, freezing, or blocking of a bank account itself. The law only permits the seizure of specific funds held in the account;
2. b) funds deposited into the account after the seizure order and subsequent judicial approval cannot automatically be considered seized;
3. c) the seizure of funds in a bank account cannot be interpreted as a freeze or blockage of the entire account and cannot restrict access to funds that were never subject to judicial review.

The Prosecutor’s Office decision represents an important step toward restoring our client’s rights, developing legal practice regarding property seizure measures, and ensuring the lawful protection of legal entities in criminal proceedings.