30.04.2018 NCA secures unexplained wealth orders for the first time

30.04.2018 NCA secures unexplained wealth orders for the first time

Despite the fact that the UK government originally predicted that the unexplained wealth orders (UWOs) would not be used during the first year in which they were available, on 28 February 2018, the UK National Crime Agency (NCA) announced that it had secured the first UWOs to investigate assets totalling £22 million ($30 m) believed to be ultimately owned by a politically exposed person (PEP), less than a month after the legislation was introduced.

A politician from central Asia with a multi-million pound property portfolio became the subject of UK’s first “unexplained wealth order” as authorities attempt to stop the flow of dirty money through London. According to the people familiar with the situation this person was already in the sights of the NCA. The orders relate to two properties, one in London and one in the South East of England and include a house and offices, they added.

In addition to the UWOs, interim freezing orders (IFOs) were granted meaning that the assets cannot be sold, transferred or dissipated while the IFO is in place.

UWOs, which force investigated persons to explain their assets if they appear disproportionate to their income, came into force on 31 January 2018. If they are ignored then law-enforcement agencies can secure a court order to recover the assets since it can be argued they are likely to be the proceeds of illegitimate gains. These are the first orders to be secured under the new legislation and represent the first time the legislation will be tested in court, since UWOs came into force at the end of January.

UWOs apply to politically exposed people, such as foreign politicians and their families, from outside the European Economic Area, or to anyone suspected of being involved in organised crime.

They essentially shift the burden of proof from investigators to the investigated, forcing them to explain assets that appear out of proportion to their known income. If UWOs go unanswered, law-enforcement agencies can argue in court that assets are likely the proceeds of ill-gotten gains, and a civil recovery order can be imposed.

Donald Toon, Director for Economic Crime at the NCA, said: “Unexplained wealth orders have the potential to significantly reduce the appeal of the UK as a destination for illicit income. They enable the UK to more effectively target the problem of money laundering through prime real estate in London and elsewhere.

We are determined to use all of the powers available to us to combat the flow of illicit monies into, or through, the UK.” Campaign groups hope that UWOs can target the estimated £4bn of UK property bought with the proceeds of crime or plundered from developing nations.

Transparency International, which identified properties that could be targets of UWOs across exclusive London neighbourhoods such as Mayfair and Hampstead, welcomed the NCA’s move. Last year Transparency International UK identified London properties worth a total of £4.2 billion ($ 5.8 billion) that were bought by individuals with suspicious wealth.