What are Unexplained Wealth Orders?
Unexplained Wealth Orders (UWOs) are civil powers introduced as part of the Criminal Finances Act 2017 to help prevent money laundering in the UK. Using UWOs, authorities can investigate and seize property suspected of being the proceeds of criminal activity.
A UWO is essentially a tool that enables information gathering during the early stages of an investigation.
It places the burden on high-net-worth individuals, companies or trusts to prove how they have accumulated their wealth.
A UWO can apply to any high-net-worth person or any company registered in the UK or abroad that is suspected of serious crime, or with a connection to a person / entity suspected of serious crime.
An application for a UWO is made to the court without the subject being notified.
If the subject does not provide an adequate explanation of how funds were acquired, or provides unsatisfactory evidence, the asset is considered “recoverable property” under the Proceeds of Crime Act (POCA) 2002.
What Are The Conditions For Issuing An Unexplained Wealth Order?
A UWO can be sought without any civil or criminal proceedings having begun, and the subject of a UWO does not need to have been convicted of an offence or to have had a civil law judgement against them.
An application for a UWO can be made in respect of any assets worth more than £50,000.
An order can be applied for by the:
- National Crime Agency
- Crown Prosecution Service
- Financial Conduct Authority
- Serious Fraud Office
The prosecuting agency must:
- Show a reasonable belief that the respondent owns the asset
- Apply to the High Court specifying the property in question
- Satisfy the court that there are reasonable grounds to suspect a respondent’s lawful income is insufficient to obtain the property
- Satisfy the court that the respondent is 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 when an Unexplained Wealth Order is Granted?
If an UWO is granted by a judge, it is the responsibility of the respondent to make a written statement explaining the nature and extent of their interest in the asset, and how it was obtained.
The order will specify the time by which this information must be provided – and the subject must provide all of the specific details and documents that are requested (section 362 (5) Proceeds of Crime Act 2002).
What Happens During an Unexplained Wealth Orders Investigation?
It is not a criminal offence to fail to comply with a UWO, but if the respondent fails to meet its requirements to the satisfaction of the investigators, recovery proceedings will be instigated for the asset.
An interim freezing order may be used to prevent the subject from disposing of the assets, and a criminal investigation can 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, it could result in a criminal conviction with a sentence of two years’ imprisonment, a fine, or both.
The information and documentation supplied in response to a UWO can also be used in a criminal investigation into someone other than the respondent – and can be shared with law enforcement agencies around the world.
How Patrick Cannon can help
It is important to use an expert financial crime lawyer to advise and represent you from the moment you are served the order.
Patrick has been advising on tax and financial crime for over 35 years, first as a solicitor and latterly as a barrister. This experience has given him expertise in helping businesses negotiate the complexities of financial crime investigations. As a barrister, he represents companies and individuals in appeals, and can offer advice on all aspects of financial crime.
For advice and representation in a financial crime investigation with one of the UK’s leading specialist tax and financial crime advisers, please contact Patrick Cannon here.
Alongside this, Patrick Cannon can advise and defend individuals on: