With the recent coming into force of the Unexplained Wealth Orders (UWO) regime and with its first application against the London real estate of a Politically Exposed Person (PEP), the British authorities appear eager to send out a message that the UK is no longer willing to accommodate the assets of those who plundered the wealth of their nations, and those seeking to reap the benefits of criminal behaviour. Donald Toon, the Director of Economic Crime at the National Crime Agency, captures the official position by confirming that “we are determined to use all of the powers available to us to combat the flow of illicit monies into, or through, the UK.
A UWO is an Order issued by the High Court on the application of an (“Enforcement Authority”) for a person (“respondent”) to provide details of how they have financed their acquisition of assets in the UK. For such an Order to be granted, three conditions must be met:
- The value of the respondent’s target property is over £50,000; and
- The known lawful resources of the respondent are insufficient for the respondent to acquire such property’; and
- Either (i) the respondent is a Politically Exposed Person (PEP); or
(ii) the respondent or persons connected to the respondent have engaged in serious criminal activity anywhere in the world
What is noteworthy about these conditions, and perhaps most worrying for kleptocrats and organised criminals, is the width of some of its definitions and applications; for example:
- A PEP includes not only foreign government officials, but also their families and those closely associated to them, as well as directors of state sponsored companies.
- The standard of proof is only one of “reasonable suspicion” and not any higher
- The £50,000 is the value of the target property and not the respondent’s interest in it
- A UWO can be made without notice and can be accompanied by a freezing order, if there is a risk of flight.
- A UWO can be issued even against those properties acquired before the UWO regime came into force
- An Enforcement Authority is not limited to the Crown Prosecution Service but also includes HM Revenue & Customs, National Crime Agency, Financial Conduct Authority, Serious Fraud Office.
It is also worthy of note that UWOs are civil measures laid against properties and not against individuals, and so they can, for example, be issued against the UK located assets of a foreign based respondent.
If the early flurry of activity outlasts the initial political rhetoric, UWOs my well be what is needed to counter the reputation of Britain, and London in particular, as a magnet for “dirty” international money.