Unexplained Wealth Orders are designed to confiscate the proceeds of crime by using civil powers instead of criminal powers. Anti-money laundering regulation is a global problem. In the UK this gives rise to about 400,000 suspicious activity reports (SAR’s) per annum. According to the National Crime Agency (NCA), billions are allegedly laundered each year, largely through London, with the appropriation of state assets by the corrupt and powerful and the purchase of homes for the super-rich. The Criminal Finances Act 2017, which became law on 31st January 2018, seeks to meet these challenges and amends the Proceeds of Crime Act 2002 and the Terrorism Act 2000. The most important section is Part (1) which provides for greater powers to investigate the proceeds of crime through Unexplained Wealth Orders (UWOs) which can compel an individual to explain how an asset was obtained. The High Court can now make UWOs if satisfied that:

  • (a) the respondent to the application holds the property and:
  • (b) the value of the property is greater than £50,000.
  • (c) that reasonable grounds exist for suspecting that the known sources of the respondent’s lawfully obtained income would have been insufficient for the purposes of enabling the respondent to obtain the property and:
  • (d) that the respondent is a Politically Exposed Person (present and past holders of public office, their families and associates) or:
  • (e) there are reasonable grounds for suspecting that:

(i) the respondent is, or has been involved, in serious crime (whether in the UK or elsewhere) or:

(ii) a person connected with the respondent is or has been so involved.

This last sub-clause potentially widens the net considerably. The respondent must demonstrate how he legitimately came by the asset, or else it can be seized and forfeited. The provision is retrospective. Although a civil order, it is given extra teeth by the creation of criminal offences where misleading or false statements are knowingly or recklessly made in the course of complying with the order. The statement in compliance with an order can even be held against its maker where inconsistent statements are made in other proceedings. UWOs can be made in conjunction with freezing orders and can even apply to overseas property. It is also notable that a UWO can be served on a politically exposed person without any connection to serious crime. The Bill is notably silent on requiring offshore havens such as the BVI and Jersey to keep public registers, which might be considered key to exposing the corrupt to investigation.

An Unexplained Wealth Order can be obtained upon application by one of the following enforcement authorities:

  • The National Crime Agency
  • Her Majesty’s Revenue and Customs
  • The Financial Conduct Authority
  • The Director of the Serious Fraud Office
  • The Director of Public Prosecutions

It’s a time for all entrepreneurs and business men/women to ‘dot the i’s and cross the t’s’ and make sure you can account for every financial transaction you make and the assets you acquired. We can help you prepare a ‘statement of affairs’ that meets and complies with all international money laundering regulations.