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Blocked Account

What does Blocked Account mean in American Law?

The definition of Blocked Account in the law of the United States, as defined by the lexicographer Arthur Leff in his legal dictionary is:

An account in a bank or similar institution access to which by the owner is, by government action, totally forbidden or sharply restricted. The most common restriction is against transfer of the deposits out of the country, instituted to cope with a growing flight of assets. Sometimes a nation will allow its citizens or temporary residents to receive foreign currency but only if it is “blocked,” i.e., it has to be spent locally. Indeed some currencies may be “blocked currencies,” i.e., it is illegal to export them whether deposited in a bank or not. A country will block all of the locally deposited assets of another (and its citizens) when war breaks out between them, or as an act of retaliation for the other’s committed and threatened hostile acts, e.g., the 1979 U.S. decree blocking Iranian assets in the U.S. This process should be distinguished from that which takes place when, in connection with litigation, courts order restrictions placed upon bank accounts which are the subject of the action, or should be kept intact to pay any damages awarded. Cf. garnishment.

Meaning of Blocked Account

In this law dictionary, the legal term blocked account is a kind of the Banking class.

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