Unexplained wealth orders are back in the spotlight with the news that the National Crime Agency have for the first time been granted a UWO against an individual on the basis of his links to organised crime.
When UWOs were first introduced in January 2018 through the Criminal Finances Act 2017, they were hailed as the new weapon of choice for British crime fighting agencies tasked with trying to ‘clean up’ the UK’s image and rid it of its reputation as a safe haven for ‘dirty money’.
Transparency International UK estimates that there is more than £4.4bn worth of “suspicious property” across Britain.
Graeme Biggar, director general of the National Economic Crime Centre, explained the need for UWOs: “The purchase of prime property in London is a tactic used to launder money and we will use all the powers available to us to target those who try to do this.
“A priority for the NECC is to ensure we explore every opportunity to deny assets linked to illicit finance. Our aim is to prevent misuse of the UK’s financial structures, which undermines the integrity of the UK’s economies and institutions.”
- An UWO has been granted against an individual due to his links to organised crime
- UWOs seek the individual to explain the nature and extent of their interest in the assets
- The burden of proof rests with the person under investigation
Despite the fanfare when first introduced, crime fighting agencies have been slow to use their new powers. The NCA has led the way by being the first to apply for the new orders, but even it has only been granted three UWOs to date.
What is a UWO?
A UWO is an order that requires the target (this can be an individual, a company or a trustee) to provide information about a particular asset. Broadly speaking, UWOs can be used when there is an obvious gap between the value of the asset – which must be more than £50,000 – and the income of the person who appears to own it.
The agency must show there are reasonable grounds to suspect that the individual’s known legal income would have been insufficient to purchase the property. The orders will usually be accompanied by a freezing order to safeguard the property from being transferred or sold pending conclusion of the investigation.
The orders can be obtained either when the individual is:
• A politically exposed person from outside the European Economic Area; or
• A person reasonably suspected of past or present involvement in serious crime (in the UK or elsewhere) or being connected to such a person.
The rationale behind the PEP category is clear – PEPs are people who have, or have historically, held a high political profile or have held public offices thereby being exposed to a far greater risk of money laundering as a result of corruption. If an individual falls into this category then there is no need for there to be evidence of criminality at all in order for the UWO to be issued.
The second category is potentially even wider – “serious crime” includes a large range of offences: bribery, fraud, money laundering, tax offences or any offence the court deems “sufficiently serious in the circumstances of that case”.