Friday Highlight  

What is an unexplained wealth order?

The courts have powers to issue interim freezing orders when making an UWO, which could give rise to concerns when dealing with any property belonging to the recipient of the order.

An adviser may wish to consider their own anti-money laundering procedures in relation to such clients, although under the fourth money laundering directive, politically exposed persons should already be the subject of enhanced due diligence.

It may be that the introduction of these orders focuses the mind and makes the adviser more aware of signs of illegal activity.

The adviser should be alert to any large transaction whereby the client’s known lawfully obtained income or assets would be insufficient to allow them to obtain the property.

They may wish to consider whether it is appropriate to make a suspicious activity report if there are concerns as to the legitimate funding for an asset.

Failure to report suspicions or to ‘tip off’ the client is a criminal offence and the adviser could be prosecuted.

The future

These orders offer a lucrative and effective means of recouping of illegitimate funds.

UWOs have been available in Australia and Ireland for many years and while they have not been particularly utilised in Australia, the success rate is high - 24 out of 28 applications have been successful since 2001. 

Ireland has had even more success, with a 100 per cent success record, and it is reported that they have recovered in excess of $15m.

At the beginning of the year it appeared that enforcement agencies would be slow to utilise their new powers. 

The director of the SFO, David Green, stated that it would be waiting for the “right case” and believed there would not be a sudden onslaught of forced asset disclosure. 

It may have come as a surprise, therefore, for the SFO to witness the NCA taking such quick action.

Donald Toon, director for economic crime at the NCA, says: “Unexplained wealth orders have the potential to significantly reduce the appeal of the UK as a destination for illicit income.

"They enable the UK to more effectively target the problem of money laundering through prime real estate in London and elsewhere. We are determined to use all of the powers available to us to combat the flow of illicit monies into, or through, the UK."

What is clear is that the government is prepared to keep introducing legislation to combat money laundering and terrorist financing with lucrative consequences to encourage the enforcement agencies to keep tackling this area of crime. 

It seems the draconian approach in these types of cases is set to continue. 

Marie Bourke is a senior associate at Russell-Cooke