Explaining The Unexplained Wealth Order And Civil Asset Recovery

A new weapon in the war on dirty money has attracted much press attention and legal commentary recently - the Unexplained Wealth Order. Ian Gatt QC and Pia Mithani consider the new Unexplained Wealth Order under the Criminal Finances Act 2017, its scope and practical operation, and what impact it might have in the world of civil asset recovery.

Minister of State for Security Ben Wallace has welcomed the Unexplained Wealth Order as a key weapon in the war on fraudsters and corrupt politicians with the promise that these individuals will now face the full force of the law. However, the response from law enforcement agencies is more muted. David Green QC, Director of the Serious Fraud Office (SFO) accepts their uses but believes we are not about to experience a sudden onslaught of forced asset disclosure. Unused by the SFO to date, he says the SFO is waiting for "the right case".

What is an Unexplained Wealth Order?

The Unexplained Wealth Order ("UWO") is a civil investigatory tool requiring a Politically Exposed Person ("PEP") and a person suspected of involvement in financial crime (or association with it), to disclose assets that appear disproportionate to their known income.

A UWO is only available to identified enforcement authorities, namely:

the National Crime Agency Her Majesty's Revenue and Customs the Financial Conduct Authority the Director of the Serious Fraud Office the Crown Prosecution Service An application is made to the High Court if an enforcement authority has reasonable cause to believe that a person holds unexplained property in excess of £50,000 and they are either:

a PEP outside the UK or a person closely associated or connected with a PEP (including family); or that there are reasonable grounds for suspecting that person is or has been involved in serious crime (in the UK or elsewhere) or is connected with such a person. UWOs are available regardless of when the property was acquired; they can bite on assets acquired before the legislation came into force. The enforcement agency simply needs to persuade the court that there are reasonable grounds for suspecting that the known sources of the individual's lawfully obtained income would have been insufficient for the purposes of enabling them to obtain the property in question.

A UWO requires the respondent to provide a statement setting out:

the nature and extent of the respondent's interest in the property; how the respondent obtained the property; if the property is...