Unexplained wealth orders (UWOs) were introduced by Section 1 of the Criminal Finances Act 2017 and came in to effect on 31 January 2018. They were introduced as a mechanism to investigate and confiscate the proceeds of crime by using civil, rather than the traditional criminal powers available to investigate suspicious assets which are thought to represent the proceeds of crime. We explain exactly what UWOs entail.
A UWO is an Order requiring a respondent to provide a statement setting out the nature and extent of their interest in a property, explaining how the property has been obtained and setting out such other information in connection with the property as may be specified.
An Order of this type is usually obtained by an enforcement authority, including but not limited to the National Crime Agency, the Police or the Serious Fraud Office and can be made in relation to property if a court is satisfied that each of the requirements for making the order is fulfilled.
Broadly speaking, the court must be satisfied that there is reasonable cause to believe that property greater in value than £50,000 is held by a respondent. There must also be reasonable grounds for suspecting that the known sources of that respondent’s lawfully obtained the income will be insufficient for the purposes of enabling them to acquire that property and that person is either a politically exposed person (PEP) or there are grounds to suspect that the respondent has either been involved in a serious crime or a person connected to the respondent is or has been.
In early 2018 a politician from central Asia with a multi-million-pound property portfolio was the first person in the UK to be subject to a UWO as government agencies attempted to stop the flow of laundered money through London. The National Crime Agency announced that it had been granted the power to enforce a UWO worth £22m and freeze the assets of the owner of them. The Order related two properties which were situated in London and in south-east England.
UWOs could significantly reduce the appeal of the UK to criminals as a possible destination to hide illicit income according to Donald Toon the National Crime Agency’s head of economic crime. It is foreseen that the new legislation will represent a significant step in mitigating both the use and distribution of assets representing the proceeds of crime and act as a deterrent to wealthy international money launderers seeking to use the UK as a forum for legitimising illegitimate wealth.
There are some concerns over what impact the regular use of civil orders of this type will have; namely because of the reversal of the burden of proof on to the respondent to show the legitimacy of their assets-shifting it from the investigating authority to the asset owner, the lack of requirement for a conviction to be obtained before an application is made and uncertainty over what amounts to ‘reasonable grounds’ for believing the suspicion. However, on the whole, the legislation is regarded as a positive step.
A respondent failing to comply with a UWO, either recklessly or knowingly, or who makes a false statement, could be convicted of a criminal offence, which may result in a sentence of up to two years imprisonment, or a fine, or both, so it is therefore important that respondents take early legal advice on what such orders mean, what duties exist in order to comply and on what grounds there are to seek to discharge a UWO.
If you need advice on unexplained wealth orders or in relation to any other Proceeds of Crime Act related matters, Pinney Talfourd can assist. We have an experienced and dedicated team of specialist commercial litigation solicitors based in our offices across Essex and London.
We have late night and Saturday appointments available in our offices in Brentwood, Hornchurch, Upminster, Leigh-On-Sea and Canary Wharf for those that find it difficult to make appointments during working hours. We are also happy to meet with you onsite at your own premises if more convenient.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.