Unexplained wealth orders: The NCA claim to have reached a “milestone”

Unexplained wealth orders: The NCA claim to have reached a “milestone”

The National Crime Agency (NCA) has recovered almost £10 million worth of properties and cash from a Leeds-based businessman, Mr Mansoor Mahmood Hussain, in civil recovery proceedings emanating from an unexplained wealth order (UWO).[1]

Commenting on the announcement, the NCA Director General of the National Economic Crime Centre, Mr Graeme Biggar, said: “This case is a milestone, demonstrating the power of Unexplained Wealth Orders, with significant implications for how we pursue illicit finance in the UK.”[2]

What are UWOs?

UWOs were introduced in January 2018 by the Criminal Finances Act 2017. A UWO is an order that can be issued by the High Court (in England) or Court of Session (in Scotland) in respect of property valued at more than £50,000.

To issue a UWO, the court must be satisfied that the respondent holds the property, and that there are reasonable grounds for suspecting that the known sources of the respondent’s lawfully obtained income would have been insufficient for the purposes of enabling the respondent to obtain the property. Additionally, the respondent must either be: (i) a politically exposed person (PEP); or (ii) there must be reasonable grounds for suspecting that they are, or have been, involved in serious crime (whether in the United Kingdom or elsewhere), or that a person connected with the respondent is, or has been, so involved. The order against Mr Hussain was obtained on the latter basis.

It is important to note that a UWO is not an asset recovery power in and of itself; rather, it complements other civil recovery powers that exist under Part 5 of the Proceeds of Crime Act 2002 (POCA).

Where a UWO is issued, the respondent must provide certain information about their ownership of the property within a set period (e.g. the nature and extent of their interest in the property and how it was obtained). If the respondent complies (or purports to comply) with the UWO, the enforcement authority – either the NCA, the Crown Prosecution Service, the Financial Conduct Authority, the Serious Fraud Office or Her Majesty’s Revenue and Customs – has 60 days to decide what further enforcement or investigatory actions ought to be taken. If the respondent fails without reasonable excuse to comply with the UWO, the property is presumed to be recoverable property in any subsequent civil recovery proceedings under Part 5 of POCA, unless the contrary is shown.

Is this a “milestone”?

Mr Hussain’s case is significant because it is the first time the NCA has successfully recovered property following a UWO. In that sense, the NCA is right to describe it as a “milestone”. There is, however, an important caveat. After the High Court upheld the UWO, Mr Hussain settled the civil recovery proceedings, voluntarily handing over the bulk of his properties and cash. It may be that, having already made the case that there were reasonable grounds to suspect Mr Hussain of involvement in crime, the NCA did not have to go much further to prove (to the civil standard) that these assets represented the proceeds of crime. It will be interesting to see how the NCA fares in UWO cases (including those obtained against PEPs, such as Ms Hajiyeva) if the ensuing civil recovery proceedings are contested.

[1] NCA v Hussain & Ors [2020] EWHC 432 (Admin)

[2] https://nationalcrimeagency.gov.uk/news/businessman-with-links-to-serious-criminals-loses-property-empire-after-settling-10m-unexplained-wealth-order-case

[3] https://www.nationalcrimeagency.gov.uk/news/nca-secures-unexplained-wealth-order-against-properties-owned-by-a-northern-irish-woman

Jonathan Flynn is an employed barrister at BCL specialising in criminal and regulatory law. He has particular expertise in fraud, bribery and corruption, restraint and confiscation proceedings, and general crime. Jonathan has acted in a number of high-profile, complex and multi-jurisdictional cases, including investigations/prosecutions by the SFO, FCA, HMRC, and NCA.