Unexplained Wealth Orders

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In January 2018, the UK introduced Unexplained Wealth Orders (UWOs) with the purpose of requiring certain people to explain their interest in certain property and the source of the money they used to purchase it.

What is an Unexplained Wealth Order?

A UWO is a type of investigation order that has been issued by the High Court. The main purpose of these orders is to require people to prove how they lawfully acquired certain property that would normally be beyond their means.

Unexplained Wealth Orders act as a gateway to forfeit the property under the Proceeds of Crime Act 2002 or to acquire information which can be used to further other investigations. The focus and aim of UWOs will be to make civil recoveries of proceeds of crimes.

Who can apply for an Unexplained Wealth Order?

There are a number of relevant enforcement authorities that can apply for UWOs and they are:

the National Crime Agency
Her Majesty’s Revenue and Customs
the Financial Conduct Authority
the Serious Fraud Office
the Crown Prosecution Service

When can they apply for this order?

An application must be made to the High Court by these authorities in order to obtain a UWO.

The following criteria must be met to satisfy the High Court before making an order:

There is a genuine reason to believe that the person in question owns the property and it is worth over £50,000
The is reasonable grounds to believe that this persons lawful income would not be sufficient to obtain the property
The Person is believed to be involved in a serious crime or is a Politically Exposed Person (PEP) (someone who has been entrusted with a prominent public function and are higher risk to bribery and corruption due to their influence in the role)

What happens when subjected to a UWO?

Someone who is subjected to an Unexplained Wealth Order, you must provide a response with explanations covering the following:

The nature and extent of their interest in the property
How the property was obtained, particularly how costs were covered

If the defendant does not respond and has no reasonable excuse to not doing so, this will result in the property being presumed to be recoverable property under PoCA 2002. This essentially is a reversal of the burden of proof as the person is required to prove that the property is not the proceeds of crime, rather than requiring the state to prove that it is.

It is a criminal offence for any respondent to make a statement that is false or misleading in any way. The charge for anyone found guilty of this offence is imprisonment for up to 2 years.

What if the property is outside of the UK?

It does not matter if the property is outside the UK or if the respondent is not a UK resident as UWOs have an international reach.

UK enforcement authorities may seek assistance from governments of the country where the asset is based and obtain a freezing order. This can prevent anyone from that country dealing with the relevant property.