On 3 October 2018, the UK High Court dismissed a challenge made by a woman known as "Mrs A" against an Unexplained Wealth Order ("UWO"). The National Crime Agency ("NCA") had issued a UWO against Mrs A on 28 February 2018 requiring her to explain how she afforded two British properties worth £22m.
A UWO is an investigative court order requiring a person to explain the origin of property that appears to be disproportionate to their known income. In order to issue a UWO, the Court must be satisfied that:
- The respondent holds the property in question and its value is greater than £50,000;
- There are reasonable grounds to suspect that the known sources of the respondent's known income is insufficient to have obtained the property;
- The Respondent is either:
- A Politically Exposed Person ("PEP"), family member, or "close associate" of a PEP;
- Or reasonably suspected of being "involved in serious crime"; or somebody connected with such a person
The NCA suspect that Mrs A bought the properties, via a BVI company, using funds embezzled by her husband when he was employed at non-EEA bank. The NCA consider Mr A to be a PEP on the basis of the bank which employed him being a "state-owned enterprise". The NCA say that Mr A is currently in custody abroad having been convicted of fraud and embezzlement offences in relation to the bank.
However, Mrs A challenged the order on the basis that her husband was not a PEP working at a state owned bank and therefore the test to issue a UWO was not satisfied. Counsel for Mrs A also argued that Mr A was simply an international banker whose wealth had covered his wife's expenditure. However, the Court rejected the arguments that the defence put forward.
An appeal against the judgment is expected and Mrs A has until 10 October to lodge the appeal, in the meantime her and her husband's anonymity has been preserved. If Mrs A loses her appeal, she will have to explain how she afforded the two properties. Failing which, the properties will be presumed to be the proceeds of crime and could be subject to confiscation. Should Mrs A refuse to comply with the UWO she could face proceedings for contempt of court which could result in a prison term of up to 24 months.
It is reported that the NCA is poised to obtain UWOs in nine cases imminently but that hundreds more are under consideration. In our earlier article on this case, we posed the question as to whether the NCA picked the right battle for its debut UWO due to the difficulties involved. Now that the NCA has had the green light from this test case, we expect that there will be a proliferation of these orders in the coming months.
For more information on about UWO's see our previous blog here.
Should you have any questions regarding UWOs please contact Jo Rickards or Min Weaving.