Unexplained Wealth Orders likely to rise

Posted on 19 September 2018 by Tim Thompson and Chris Breaks

Unexplained Wealth Orders likely to rise

Following the release of the names of two Russian nationals wanted in connection with the attempted murder of former Russian spy, Sergei Skripal and his daughter Yulia, reports indicate that the National Crime Agency (NCA) is looking to increase the number of individuals targeted with unexplained wealth orders (UWOs).

UWOs are court orders requiring individuals to account for the origin of their assets if certain conditions are satisfied including, there being reasonable grounds for suspecting that the individual's known sources of income are insufficient to enable them to obtain such assets. For more information on UWOs, see our previous blog here.

UWOs were introduced under the Criminal Finances Act 2017 and came into force on 31 January 2018. Despite having had the power to issue such orders for more than six months, the authorities have received widespread criticism for a perceived lack of action. Since the introduction of UWOs, only three orders have been made. The first UWO was secured in February 2018 when the NCA were granted an order to help them investigate assets worth £22million. The assets are believed by the NCA to be the property of a politically exposed person and consist of real property located in London and the South East of England. The individual's assets have been frozen pending the provision of the information requested by the NCA.

In response to questions in the House of Commons, the Attorney General, Geoffrey Cox QC, reiterated the government's commitment to tackling economic crime. Asked how effective he believed UWOs would be in obtaining funds from criminals and their associates, Mr Cox said that "[UWOs] are a particularly valuable part of the armoury of the law enforcement agencies" and said that he expects that "considerable numbers of them will be used over the coming months".

We have previously pointed out that UWOs cannot be used to target individuals based on their nationality but in the current climate, potential Russian subjects may find that they are a priority. Speaking to the Financial Times, Donald Toon, director of the NCA's economic crime unit confirmed it was preparing to expand the use of UWOs. Mr Toon told the Financial Times "are we looking at potential Russian targets? Of course we are". Mr Toon went on to confirm that the NCA was "looking at high-value Russian assets in the UK" and "whether or not [the NCA] can be in a position to go to the courts [to obtain UWOs]".

Mr Toon also had a warning for lawyers, accountants and other "professional enablers" of financial crime, citing concerns about the effectiveness of customer due diligence and indicating that the number of suspicious activity reports was below what the NCA would expect.

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