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What you need to know: Unexplained Wealth Orders
Unexplained Wealth Orders (UWO) came into force in January 2018 to help authorities identify and seize property suspected to have been bought by laundered criminal funds, most commonly from foreign sources.
We also explore the legal implications of UWOs, and the concerns raised by them among the legal community. If you need any help regarding a UWO, JMW’s business crime team can provide the expert advice and guidance you need.
What are Unexplained Wealth Orders?
UWOs grant new civil powers to UK law enforcement agencies to help them identify, investigate and seize property suspected to represent the proceeds of criminal activity.
A UWO places the burden on the individual, rather than the enforcement agency, to prove how they have accumulated their wealth and to raise evidence to verify the sources of the wealth.
Why are UWOs needed?
It is often difficult for agencies to prove how individuals obtain their wealth when they are based overseas or where ownership of the assets is very complex. Under these circumstances, it is evidentially onerous to arrest and charge the individuals with a criminal offence.
It has been argued that UWOs are necessary to shift the UK’s reputation for being a ‘safe haven’ for criminal funds.
When are they issued?
A UWO can be issued by the High Court where an individual is ‘reasonably suspected’ of involvement or connected to a person involved in serious crime. It obliges the individual to explain how property was obtained.
In other words, are there are reasonable grounds to suspect that the individual’s lawfully obtained income would be insufficient to fund the purchase of the property?
Who can apply for one?
In addition to the Hight Court, an order can also be applied for by the:
- National Crime Agency
- Crown Prosecution Service
- Financial Conduct Authority
- Serious Fraud Office
What is the process for obtaining a UWO?
The prosecuting agency will have to:
- Show a reasonable belief that the respondent owns the asset
- Apply to the High Court specifying the property in question (subject to a £50k minimum value)
- Satisfy the court that there are reasonable grounds to suspect a respondent’s lawful income is insufficient enough to obtain the property
- Satisfy the court that the respondent is either:
- a non-EEA Politically Exposed Person (PEP) OR
- there are reasonable grounds to suspect they are/have been involved in serious crime (or are connected to someone who is)
What happens if a UWO is granted?
If an order is granted, it is then the responsibility of the respondent to explain the nature and extent of their interest in the relevant asset and the legal basis upon which it was obtained.
Failure to do so to the satisfaction of the enforcement agency, or failure to respond, could lead to the following:
- The asset will be presumed to be recoverable and recovery proceedings will be instigated
- If deemed appropriate, an interim freezing order maybe be brought to prevent the respondent from disposing of the assets
- A criminal investigation may be launched into the nature of the ownership of the asset
If the respondent is believed to have knowingly made a false or misleading statement, a criminal conviction could be brought with a corresponding sentence of two years imprisonment, a fine, or both.
What impact will they have?
Although welcomed by the UK’s law enforcement agencies, there are concerns from the legal community.
- The wide scope of the criteria required to obtain a UWO leaves the orders open to interpretation
- The reversal of the burden of proof from the investigating authority to the owner of the asset could affect a person’s right to a fair trial
- Assets can be seized under the Proceeds of Crime Act without a criminal conviction (or even a criminal trial) having taken place
Can a UWO be challenged?
There are circumstances in which UWOs can be challenged. Were the officers open and transparent with the judge in their application? Have the statutory criteria been met? Is the individual correctly described as a ‘politically exposed person’ or is the connection with the alleged criminal activity sufficiently strong? To what extent is the individual obliged to comply with the order?
Get in touch
If you need any further help regarding Unexplained Wealth Orders, JMW’s criminal defence team can provide the expert advice and guidance you need.
Prefer to see this information in visual form? Take a look at our visual factsheet below: