The Government has recently published its Action Plan for anti-money laundering and counter-terrorist finance.
The Action Plan includes a consultation on a number of proposals for a number of very extensive new powers. One such proposal is Unexplained Wealth Orders (UWOs). These would enable UK investigating authorities to require a defendant to explain and account for the origin of his assets. Namely, these would be used where the assets owned by the individual are inconsistent with his income level. Notably, the power to issue a UWO could be used in respect of assets where there were grounds for suspicion (but no proof beyond reasonable doubt) that the assets constituted the proceeds of crime. Pending the provision of explanations, the assets would be frozen. In the event that the explanations provided were not satisfactory, the assets would be vulnerable to seizure in civil recovery proceedings.
The UWO is different from traditional confiscation powers in two crucial respects. First, it shifts the burden of proof in respect of the legitimacy of the asset from the investigating authority to the asset owner. Second, the confiscation is not conviction based: there is no requirement to prove that the asset owner has committed a predicate criminal offence.
Legal Director Thomas Webb commented: “The Government should be commended for seeking to add to the arsenal of powers available to combat money laundering. However, the UWO proposal does have a rather uncomfortable aspect to it. Confiscation of a person’s assets must surely be based on something more than the fact that the explanations as to where they came from are not entirely satisfactory. Especially if it cannot be proven that the assets in question were obtained as a result of criminal activity.”
We will need to wait to see how the proposals develop and what safeguards will be put in place in the event that they are introduced, in particular in relation to the classes of person upon whom UWOs could be served and whether minimum asset value thresholds will be imposed.