SFO

Unexplained Wealth Orders

Unexplained Wealth Orders

On 31 January 2018, regulations bring into force sections of The Criminal Finances Act 2017 dealing with Unexplained Wealth Orders (UWOs), along with various other related provisions. 

The purpose of this new order is to allow for certain people who obtain property which would ordinarily be beyond their obvious means, to be required to prove how they lawfully acquired it. This is in effect a reverse burden of proof.

Law enforcement agencies often have reasonable grounds to suspect that identified assets of such persons are the proceeds of serious crime. However, they are often unable to freeze or recover the assets under provisions in the Proceeds of Crime Act due to an inability to obtain evidence (often due to the inability to rely on full cooperation from other jurisdictions to obtain evidence). 

 The authorities which may apply for such an order are:

  • The National Crime Agency (NCA);
  • HM Revenue and Customs (HMRC);
  • The Financial Conduct Authority (FCA);
  • The Director of the Serious Fraud Office (SFO); and
  • The Director of Public Prosecutions (DPP)

If you are subjected to an order of this kind, you must provide a statement which does the following:

  • Sets out the nature and extent of your interest in the property;
  • Explains how you obtained the property, particularly how any costs involved were met;
  • Provides details of any settlement if the property is held by trustees; and
  • Sets out any other information about the property specified in the order

In addition to a statement, it may be necessary to supply documents connected to the property as required by the order.

Before it can make an order, the High Court must be satisfied that the following criteria are met:

  • There is reasonable cause to believe that the person in question holds the property and that it is worth over £50,000;
  • There are reasonable grounds for suspecting that this person’s known income (from lawful sources) would not be enough to obtain the property;
  • The person in question is a politically exposed person (see definition below) or there are reasonable grounds for suspecting that they are or have been involved in a serious crime or someone connected to this person is or has been so involved.

A politically exposed person (PEP) is someone who is or has been entrusted with prominent public functions by an international organisation, a State other than the UK or another EEA State, a family member of such a person, a close associate or someone connected to them in another way.

It is a criminal offence to knowingly or recklessly make a statement that is false or misleading in response to an unexplained wealth order. Doing so can result in two years’ imprisonment and/or a fine. This offence can be tried in either the Magistrates’ Court or the Crown Court.

Failing to provide the information, in full or part, may prejudice any civil forfeiture proceedings.

In some cases, a UWO will be accompanied by an interim freezing order. This prohibits the respondent to the UWO and any other person with an interest in the property from in any way dealing with the property.

Where the property is thought to be in a country outside the UK, the Secretary of State may forward a request for assistance to the government of the receiving county. This can be a request to prevent anyone in that country from dealing with the relevant property and provide assistance in managing it as required.

 

To discuss this, or any other matter, please contact me on +447766001774 or via email: contact@crimelawyer.co.uk

 

National Anti-Corruption Strategy

UK Anti-Corruption Update

On 11 December 2017 the UK's Home Secretary, Amber Rudd, released a statement addressing the government's economic crime strategy. This addressed, amongst other things, money laundering enforcement and the future of the Serious Fraud Office (SFO). She produced the following written ministerial statement:

Economic crime and corruption do great harm to individuals, businesses, the integrity of our financial system and the UK’s international reputation. We must do more on economic crime to safeguard our prosperity, and the UK’s reputation as a world-leading place to do business.

The Government are making a step change in their response to the threat. A broad and deep public-private partnership is at the heart of this new approach. The Minister of State for Security will become the Minister of State for Security and Economic Crime. Further, the Government will:

  • Establish a new Ministerial Economic Crime Strategic Board chaired by the Home Secretary, to agree strategic priorities across Government;
  • Ensure resources are allocated to deliver those priorities; and scrutinise performance and impact against the economic crime threat.
  • Create a new multi-agency National Economic Crime Centre (NECC) hosted in the National Crime Agency to task and co-ordinate the law enforcement response, working in the closest possible partnership with the private sector.
  • Create a dedicated team to use the power in the Criminal Finances Act 2017 to forfeit criminal money held in suspended bank accounts.
  • Legislate to give the National Crime Agency powers to directly task the Serious Fraud Office, who will continue to operate as an independent organisation.
  • Publish draft legislation on the creation of a register of the beneficial ownership of overseas companies and other entities that own property in the UK or participate in Government contracts.
  • Reform of the Suspicious Activity Reports (SARs) regime, in partnership with the private sector, law enforcement and regulators, to reduce tick-box compliance, direct the regime to focus on the highest threats, help firms better protect themselves and improve law enforcement outcomes.
  • Review disclosure procedures to explore how to make prosecutorial processes more effective and efficient. The Attorney General will lead this work.
  • Support a Law Commission review of the Proceeds of Crime Act 2002 to identify improvements to our powers to confiscate proceeds of crime.

In addition, the Government are today publishing the UK’s first cross-Government anti-corruption strategy, and the Prime Minister has appointed John Penrose MP as her Anti-Corruption Champion. A copy will be available from www.gov.uk, and placed in the House Library.

The strategy provides a framework to guide UK Government efforts against corruption both domestically and internationally for the period up to 2022. It sets six priorities to:

  1. Reduce the insider threat in high risk domestic sectors (ports and borders, prisons, policing, defence);
  2. Strengthen the integrity of the UK as a centre of global finance; promote integrity across the public and private sectors;
  3. Reduce corruption in public procurement and grants;
  4. Improve the business environment globally; and work with other countries to combat corruption.

There will be ministerial oversight of implementation and my Department will provide an annual written update to Parliament on progress.

To support the delivery of these commitments, responsibility for the Joint Anti-Corruption Unit will transfer from the Cabinet Office to the Home Office. This change will be effective immediately.