Unexplained Wealth Orders are hitting hard

Unexplained Wealth Orders were brought into law by the Criminal Finances Act 2017, introducing new powers to the Proceeds of Crime Act 2002, and have become a powerful tool for law enforcement agencies, used to target the criminal property of high value criminals.

At the end of July this year, the National Crime Agency secured two major orders against individuals believed to be involved in serious organised crime, in separate High Court proceedings.

The first was against a man described as a “businessman in the north of England”, whom the NCA believe is involved in the large scale supply of drugs and weapons and whose properties, valued at approximately ten million pounds are believed to have been bought with laundered criminal money.

The second order was made against a woman from Northern Ireland, believed by the NCA to be linked to a paramilitary organisation, and requires her to explain how she financed the purchase of six properties in London and Northern Ireland, now worth £3.2 million.

In both cases, the NCA obtained freezing orders on the assets to stop the properties being sold or transferred unless the respondents of the orders are able to satisfy the Court as to how they financed the property purchases.

Clearly in these cases the NCA has targeted people it believes to be involved at senior levels of organised criminal activity. However, UWOs can be used on anybody with unexplained assets in excess of £50,000 and if their income is not sufficient to have purchased the assets, they will be required to explain how they were purchased.

If the respondent to an order fails to respond or adequately explain where the money came from, effectively a reversal of the burden of proof, the asset may be deemed to be recoverable criminal property. That means that ultimately the sale of the properties may be forced and the value confiscated.

As well as the National Crime Agency, the other agencies who may apply for UWOs are, Her Majesty’s Revenue and Customs, the Financial Conduct Authority, the Director of the Serious Fraud Office and the Director of Public Prosecutions.

The NCA has said that it is considering applying for unexplained wealth orders in hundreds of cases. Of course they are! It is easy money. Investigators will know who to target and collect information such as tax returns. If the income declared does not, on the face of it, meet the costs of purchasing an asset, a UWO is very effective. Either the respondent is able to provide evidence as to how they met the purchase cost or they cannot. If they can’t (or won’t), the property may be deemed to be recoverable; so that means that UWOs can not only be used to target those who have profited from crime, but have not been convicted of an offence, but is also lucrative for the enforcement agencies and the Treasury.