Unexplained Wealth Orders (UWOs) are a type of court order sought by UK fraud and financial crime authorities. They require individuals, trusts and corporations to explain how they acquired certain assets. A failure to respond to the request, or a failure to provide sufficient evidence, will result in the asset being seized and disposed of.
If you are the subject of an Unexplained Wealth Order, you need to take immediate action. Otherwise, your assets could be seized by UK law enforcement agencies. This applies, even if you are not resident in the UK. Contact our fraud solicitors now to find out what you need to do. We are available to take your call 24 hours a day, 7 days a week.
What is an Unexplained Wealth Order?
When the Criminal Finances Act was passed into law in 2017, it created a new type of court order called an Unexplained Wealth Order. These became available to law enforcement agencies the following year. Their purpose, according to the legislation’s explanatory notes, is to “tackle money laundering, corruption and terrorist financing”.
A UWO compels a person, trust or corporation to explain exactly how they acquired a particular asset. This asset can be tangible or intangible, including real estate, vehicles, boats, artwork, bonds and securities. If the person or corporation cannot provide a sufficient response, the UK authorities can ask the court for permission to seize and dispose of the asset.
Who can be subject to an Unexplained Wealth Order?
UWOs are typically aimed at high-net-worth individuals and corporate entities. More specifically, the respondent must be:
- A politically exposed person (PEP) from outside the European Economic Union, or someone connected to a PEP, such as their spouse, relatives and close associates, or
- A person involved in or connected to, serious crime – either in the UK or abroad
Also, the asset in question must be:
- Above the value of £50,000, and
- In the respondent’s control, meaning he/she can access it, and make decisions regarding its sale or use
- Disproportionate to the respondent’s income
The High Court will not grant a UWO unless these criteria are met.
The respondent may be based in the UK or overseas.
A politically exposed person could be a politician, judiciary member, head of state, ambassador, member of parliament, a high-ranking member of the armed forces, a senior manager of a state-owned business, or the director of an international company.
A serious crime might include murder, drug trafficking, firearms offences, tax evasion and modern slavery, fraud and corruption, amongst other offences.
It is also worth noting that if the respondent is suspected of a serious crime, it does not actually matter whether he/she is subject to criminal proceedings. A UWO can be obtained on these grounds, even if the individual has not been convicted – or even prosecuted – for a criminal offence.
How is an Unexplained Wealth Order obtained?
UWOs can be sought by various UK authorities, including the National Crime Agency (NCA), the Serious Fraud Office (SFO), the Financial Conduct Authority (FCA), the Crown Prosecution Service (CPS) and HM Revenue and Customs (HMRC).
Usually, UWOs arise because one of these authorities is conducting an investigation into the respondent’s financial conduct. If the known source of the respondent’s lawful income appears insufficient to obtain the asset, then suspicions will be raised. The authorities can then make an application to the High Court, requesting that an Unexplained Wealth Order be issued.
Often, this application is made on a without notice basis. This means that you will not be notified of the pending UWO. The High Court will then consider whether the application meets the necessary criteria. To recap, the High Court must be satisfied that:
- The respondent is a politically exposed person (PEP), or someone connected to a PEP, from outside the European Economic Union, or
- The respondent is a person involved in, or connected to, serious crime
- The asset is above the value of £50,000, and
- Is in the respondent’s control, and
- It could not have been purchased with the respondent’s known source of lawful income
The burden is on the applicant (meaning, the UK authority) to provide evidence in support of their request. The civil standard of proof is applied, so the applicant simply needs to prove their case on the balance of probabilities.
What happens if an Unexplained Wealth Order is granted?
If the High Court grants a UWO, you will be asked to explain precisely how you acquired the asset. This news may come completely out of the blue, as you may be totally unaware that a UWO application has been made against you. To make matters more stressful, you will be given a set amount of time in which to provide a response.
You need to provide a statement explaining exactly how you acquired the asset, and how much it cost, along with any other information requested. Evidence should also be submitted to support your claim.
If you fail to respond in the allocated timeframe, or your response is considered unsatisfactory by the NCA (or other investigating authority), the asset in question will be subject to civil recovery proceedings. This action can be pursued under Part 5 of the Proceeds of Crime Act (POCA). If the request is granted, the authorities can seize or ‘forfeit’ the asset.
A response will be deemed unsatisfactory if you fail to establish that you acquired the asset via legitimate means. However, you must not provide false or misleading information. This could result in two years’ imprisonment.
Interim freezing orders
In the meantime, you may be subject to an interim freezing order. This prevents you from selling or transferring your asset until the investigation has been concluded. An interim freezing order will be issued if the court believes that you may try to dispose of assets prior to the conclusion of the investigation, or if your assets could be difficult to seize later down the line.
Interim freezing orders can be amended to enable you access to daily living expenses. Ashmans Solicitors can help you with this.
Can I challenge an Unexplained Wealth Order?
It is also possible to challenge an Unexplained Wealth Order. Remember, the authorities must meet certain criteria in order for the UWO to be valid. If a UWO is granted, it is necessary to inspect whether the investigating authorities actually met the civil burden of proof. If not, you can mount a legal challenge and request that the UWO is discharged.
This is precisely what happened in April 2020 when a family from Kazakhstan successfully overturned three UWOs against them. The UWOs were originally granted in relation to three multimillion-pound homes in London. The NCA claimed that they had been purchased using the proceeds of embezzlement. The family applied to discharge the UWOs, which would have permitted all three homes to be seized. The judge found in their favour, stating that the NCA’s evidence was “unreliable”.
Grounds upon which you may be able to challenge an Unexplained Wealth Order include:
- You purchased the asset using the legitimate wealth
- You are not a politically exposed person or connected to a PEP
- You are not involved in, or connected to, a serious crime
- You are not in control of the asset
- The asset does not have a value of £50,000 or above
- Full and frank disclosure has not been made by the investigating authority
Speak to our fraud solicitors
If you have been made subject to an Unexplained Wealth Order, you need immediate legal advice. Time is critical in these cases. If you fail to respond, the asset is presumed to have been acquired via ill-gotten means. It will then be subject to POCA proceedings, in which the UK government authorities take control of the asset.
At Ashmans Solicitors, we can draft a statement of response on your behalf. This will work to show that you have done nothing wrong and that you acquired the asset via legitimate proceeds. If needed, we will compile evidence from across the globe, working with third parties to establish your innocence.
If the UWO has already been issued, then all is not lost. The authorities – and the courts – make mistakes. We can mount a challenge, pursuing your case at the High Court to get the UWO overturned.
Contact us now
To counter an Unexplained Wealth Order, contact our fraud and financial crime solicitors for a free initial enquiry.
You can call us on 0333 009 6275. We are available to take your call 24 hours a day, 7 days a week.