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Blocked account
 

 

A bank account from which monies cannot be drawn except in defined circumstances. An account may be blocked holder's affairs are in the hands of a trustee holder's affairs are in the hands of a trustee in bankruptcy or liquidator, and the court wishes to prevent misuse of the funds by the holder.

Blocked accounts appear more frequently in international trade. When a government is overthrown it is common for accounts in the names of foreigners, or undesirable residents, to be blocked by edict of the new rulers. Many accounts in countries where revolutions have occurred remain blocked almost indefinitely - more particularly where the revolutionary government considers that the monies in those accounts were accumulated by exploitation or, alternatively, where withdrawal of the monies would put a strain on the holding country's foreign currency reserves.

In wartime the accounts of enemy aliens are invariably blocked pending cessation of hostilities - the monies may even be summarily confiscated with little redress available to the owner in later years due to political agreements made subsequently or merely effected one-sidedly by force majeure.

In other circumstances accounts may be partially blocked for political or other reasons and these may oblige the account holder to use the contents of the account solely for transactions within the holding State and stop him taking any part of the monies out of that country.

 

Reference: The Penguin Business Dictionary, 3rd edt.