Unexplained Wealth Orders

Since 31 January 2018, enforcement authorities can obtain a High Court order, known as an Unexplained Wealth Order or UWO, compelling someone to explain the source of their funds or other property. The provisions are extra-territorial in nature and capture people and property located anywhere. Politically Exposed Persons (PEPs) and criminal suspects are targets but the new investigative tool potentially also affect the regulated sector. If people are compelled to provide information, UWOs may trigger scrutiny of a financial institution or professional adviser’s anti-money laundering (AML) systems and conduct in relation to clients now believed to have unexplained wealth.

What are the requirements?

Requiring a civil application, UWOs are open to the National Crime Agency, HM Revenue & Customs, Financial Conduct Authority, Serious Fraud Office and Crown Prosecution Service under Part 8 of the Proceeds of Crime Act 2002 (POCA). Fundamentally, it requires a person to explain the provenance of property.

For a UWO to be made, three conditions require satisfaction. The respondent must be either be a non-EEA PEP or there must be reasonable grounds for suspecting they are a criminal suspect or close associate. A PEP includes close family and associates of holders of prominent political functions. So long as a person is a PEP, there is no need to suspect criminal activity.

Once an individual falls into either category, there is a need for a reasonable basis to believe they hold specific property worth at least £50,000. Finally, there must be a reasonable basis to suspect their lawful income is insufficient to justify the property.

Any information provided in answer to a UWO will be assessed by the authorities with a view to using it to support a civil action to forfeit the property under Part 5 of POCA. The explanation provided to the enforcement agency, however, can have a wider use.

UWOs are new to the United Kingdom but Bright Line Law has barristers with experience of UWOs as they operate in other common law jurisdictions. In these circumstances, it is vital to seek advice and representation at the outset if you are the subject of UWO proceedings. If a UWO has been obtained against you, it is essential to obtain advice on challenging the UWO, if appropriate, and providing the explanation as soon as possible.

Bright Line Law's grasp of Unexplained Wealth Orders is demonstrated by:

Jonathan Fisher QC
Lead Counsel

Email jf@brightlinelaw.co.uk
Telephone + 020 3872 2852

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