The National Crime Agency (NCA) has announced that it has made its first use of the new Unexplained Wealth Order (UWO) regime, within four weeks of it coming into force.
Two orders target properties in London and the South East as part of an NCA investigation into assets totalling £22 million, believed to be ultimately owned by a foreign politician. UWOs require owners of properties to explain how the purchase of the properties was funded. If no explanation is provided, in answer to the UWO, the properties will be presumed to be recoverable by the NCA as the proceeds of crime in civil recovery proceedings, unless the contrary is proved later in court. The NCA has coupled the UWOs with interim freezing orders to prevent the dissipation of these assets.
What are UWOs?
UWOs are court orders requiring the recipient to explain the origin of property which appears to be disproportionate to their known income. A UWO may also require the production of documents. Failure without reasonable excuse to comply with a UWO means the property is presumed to be recoverable by enforcement authorities as the proceeds of crime, in proceedings under Part 5 of the Proceeds of Crime Act 2002. Moreover, it is a criminal offence for a respondent to knowingly or recklessly provide a materially false or misleading statement in response to a UWO.
When can a UWO be issued?
Only specified law enforcement authorities can apply to the court to issue a UWO, and they must satisfy the court of three conditions:
- that the respondent holds the property in question and its value is greater than £50,000 (this can be a collective value if there is more than one property and it is the value of the property not the value of any equity held in it);
- that there are reasonable grounds to suspect that the known sources of the respondent's lawfully obtained income would have been insufficient for the purposes obtaining the property; and
- that either:
- the respondent is a Politically Exposed Person (PEP); or
- there are reasonable grounds to suspect that the respondent, or a person connected with them, is or has been involved in serious crime (in the UK or elsewhere).
For more details on UWOs, see our earlier blog here.
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