An Unexplained Wealth Order ('UWO') is an order created by Section 1 of the Criminal Finance Act 2017. They entered into force in law in the UK on the 31 January 2018 (except Northern Ireland, at the time of writing). However, they have been thrust into use quickly, with the National Crime Agency ("the NCA") obtaining two on the 28 February 2018. So in light of their first use, it seems sensible to ask, what is an Unexplained Wealth Order?
Simply, they are a civil court order and investigatory tool requiring the person subject to it to give information about the ownership of a property and the means by which it was obtained. It doesn’t of itself involve the recovery of assets, and is in addition to the recovery provisions under the Proceeds of Crime Act.
The use of a UWO is reserved to cases where it is suspected that a person's property has been purchased with the proceeds or corruption, money laundering or the proceeds of serious organised crime. The orders are retrospective and can apply where property has been obtained before the 31 January 2018.
Who can apply for a UWO?
The agencies that can apply for a UWO are limited. In England and Wales, the following agencies can apply:
- The NCA
- The FCA
- The SFO
- The CPS
That said, other prosecution agencies that are not on the list above can refer their cases to one of the above, thereby enabling them to access the use of a UWO, though through an intermediate agency.
What is the test for a UWO to be issued?
Broadly, the test for a UWO to be issued is as follows:
- Does the person own the relevant property (alone or with others)?
- Is it worth more than £50,000?
Are they a Politically Exposed Person (a prominent public official, or a friend or relative of one)? If not, are they either of the following:
- Reasonably suspected of being involved in serious crime (in the UK or elsewhere), or
- Reasonably suspected of being connected to a person involved in serious crime (in the UK or elsewhere)?
If the above is the case, then the next limb applies:
- Are there reasonable grounds to suspect that the person's known lawful income would be insufficient to allow the person to own the property considered?
The High Court must be satisfied of the above before they will make such an order.
How are UWOs used in practice?
There have, at the time of writing, only been two UWOs obtained, both by the NCA. It appears they have used them as investigatory tools - to determine how the properties to were to be purchased and whether they could be recovered under a Civil Recovery Order.
There is of course a concern that any evidence produced in response to a UWO could be used against the person subject to the UWO. Generally any evidence produced in response to a UWO cannot be used to prosecute the person subject to the order. Similarly to SFO compelled interviews, information provided in compliance with a UWO cannot be used against the giver except in limited circumstances. These circumstances include:
- Recovery proceedings under Part 2 of POCA
- If false information is given in response (as described below)
- If the response is perjury.
How do you respond to a UWO?
The court will set a date by which the UWO (or sections of the UWO) will need to be responded to by, to whom the response needs to be sent and what form it should take. The response will need to include information about the interest in the relevant property, and explain how the property was obtained including how any relevant costs were paid. The response will also need to cover how the property is owned.
What other powers accompany UWOs?
As took place in the two UWOs obtained to date by the NCA, Interim Freezing Orders ("IFOs") were also obtained. These must be applied for by the same authority applying for the UWO, and must be applied for at the same time.
An IFO can be made by the court when it considers it necessary to avoid a future recovery order being frustrated by the property being sold or dissipated. They essentially prevent the owner from dealing with the property. Whilst standard practice is hard to extrapolate from just two UWOs, it seems likely that such orders will be commonplace in order to protect any future application for recovery.
What if you don’t comply?
There is a defence available of being unable to comply with the requirements of a UWO in the given time to respond, that of "reasonable excuse". What excuses may qualify are beyond the scope of this article, which instead will consider failure to comply without excuse. Suffice to say it would be risky to rely on the above argument, as the court will decide whether an excuse really was as "reasonable" as claimed.
Failure to respond results in the property (or the persons' interest in that property) being presumed to be recoverable, unless the contrary can be shown. This obviously makes it easier for that property to be recovered at a later date by the enforcing agency.
So are there any related criminal offences?
Where a person makes a materially false or misleading statement in response to a requirement under a UWO, or recklessly makes such a statement they are guilty of an offence.
This offence can be tried at the Magistrates' Court for a maximum penalty of 6 months' imprisonment and/or a fine, and in the Crown Court for a maximum penalty of 2 years' imprisonment and/or a fine.
Overall the new UWO appears to be another useful tool in the arsenal of those UK agencies investigating and prosecuting corruption (and other serious crime) inside and outside the United Kingdom.