On 28 February 2018, the National Crime Agency (NCA) publicised that it has obtained the first two Unexplained Wealth Orders (UWOs) in relation to assets with a value totalling £22m, believed to be owned by an unnamed politically exposed person (PEP). The UWOs represent the first application of the new regime, which only came into force on 31 January 2018, and this demonstrates that the NCA are ready to deploy this new tool in their armoury.
It is unsurprising that the name of the recipient of the first UWOs has not been publicised, given that the legislation allows for the application for such orders to be made ex-parte and in private. According to the NCA website, interim freezing orders were also granted at the same time as the UWOs (which, if sought, must be sought at the same time), leaving the legal owner unable to sell or transfer the relevant assets until the matter has been resolved. At this stage it is unclear how long the process will take but the Court will have granted the recipient of the UWOs a fixed period of time in which to provide a statement in response.
Also unclear is precisely who the NCA will target next. What we do know is that UWOs can be sought against individuals (either PEPs or those suspected of involvement in serious crime, or those connected with them) or structures that hold property such as companies and trusts. The NCA must satisfy the Court that a number of factors exist. Once this relatively low threshold is met however, the burden of proof is reversed and it will ultimately be for the respondent to demonstrate the legitimacy of funds used to acquire the relevant assets. In the absence of a satisfactory statement in response to a UWO, the assets will be deemed to be recoverable.
At first glance, the targets of UWOs are very much on the back foot in the sense that the order will likely be obtained ex-parte with potentially limited time for a response. Therefore, it is essential that those who consider themselves to fall within the scope of the new regime seek specialist legal advice in the first instance. In the event that a UWO is granted, clients may be best advised to engage in the process from an early stage. Every case will need to be assessed on its merits but from what can be understood from the legislation thus far, individuals who behave proactively from the outset will minimise the risk to which they expose themselves to further along in the process.
For more information in relation to UWOs and for details of the specialist legal advice that BCL can provide in relation to the Criminal Finances Act 2017, please see the article The Arrival of Unexplained Wealth Orders and the profile of partner John Binns.