Unexplained Wealth Orders: Rightly Celebrated or Overrated?
13 November 2020
UNEXPLAINED WEALTH Orders were first introduced on 31 January 2018 by the Criminal Finances Act 2017, which itself amended the Proceeds of Crime Act 2002. Here, Nicola Sharp considers the attention afforded to them in today’s world and places a strong emphasis on the fact that they can indeed be challenged.
In essence, an Unexplained Wealth Order (UWO) requires any individuals who are suspected of being involved in – or otherwise associated with – serious crime to explain their interests attached to any property or assets worth upwards of £50,000 and, further, how the funds used to acquire the property/assets under scrutiny were obtained.
UWOs will usually be brought alongside a Freezing Order, which will freeze the property/assets suspected of being the result of proceeds of crime.
There’s little doubt that many sectors of the media – and their readers – enjoy a story that involves UWOs. They do, after all, have the key ingredients that many look for in a good tale: allegations of wrongdoing on a large scale, someone being made to hand over assets worth more than most people will earn in a lifetime and the sense that justice has been seen to be done.
In one of the latest UWOs, which was widely covered in the media last month, Leeds businessman Mansoor Mahmood Hussain was compelled to hand over property worth just short of £10 million after being accused of acting as a money launderer. He has been ordered to surrender the assets because the National Crime Agency (NCA) believed Hussain’s wealth was due to the proceeds of crime and so considered him a suitable target for a UWO.
UWOs can be sought without any civil or criminal proceedings having begun. There’s no need for the subject of a UWO to have been convicted of an offence or to have had a civil law judgement against them. Agencies can apply to the High Court for UWOs against any property valued at over £50,000 if the person owning it is reasonably suspected of being involved in serious crime (or connected to a person who is) and there are reasonable grounds to suspect that a person’s lawfully-obtained income would be insufficient to allow that person to obtain that property.
Like Zamira Hajiyeva before him, Mansoor Mahmood Hussain’s inability to provide a credible and innocent explanation for his wealth has cost him and generated headlines into the bargain.
Hajiyeva may be best known for somehow racking up £16 million of expenditure at Harrods, but this only became known when she was the first person to be the subject of an Order. The NCA expected her to explain how she had bought an £11.5 million Knightsbridge house and a £10.5 million golf course in Ascot (bearing in mind that her husband is the former head of the state-owned International Bank of Azerbaijan, commanded an annual salary of no more than $70,000 and was convicted of fraud and embezzlement).
Earlier this year, Hajiyeva lost her appeal against the UWO, thus enabling the media to re-run her story and giving the NCA the chance to make approving noises about UWOs being a valuable tool when it comes to tackling illicit finance.
Before anyone rushes to applaud UWOs, it should be remembered that the NCA’s relationship with them has been something of a chequered one to say the least.
Since becoming available to the NCA, the agency’s success rate with UWOs has been patchy at best. This is despite the standard of proof for UWOs being significantly lower than that required in criminal cases.
Last year saw the NCA granted three UWOs for London property valued at £80 million. Yet less than a year later, these UWOs were discharged, with a Judge criticising the NCA’s “unreliable’’ assumptions and “artificial and flawed’’ reasoning. The Court of Appeal then refused the NCA permission to appeal this decision.
UWOs are tools that enable law enforcement agencies to seize assets they believe are the proceeds of crime without anyone ever being convicted. However, they don’t yet appear to have become the great weapon against illicit wealth that many would have hoped. Of the four cases initiated since UWOs were first introduced, two are still being contested. Mansoor Mahmood Hussain’s case is the first time that a ingle UWO has successfully led to the recovery of assets from an individual.
Although they can be seen as effective in certain situations, the UWO will often be considered the most – and, perhaps, only – viable option when a prosecution has failed or when the authorities don’t believe there’s enough evidence for a realistic chance of a conviction.
When being confronted with an UWO, it should be remembered that, while agreeing to settle and hand over property isn’t an admission of guilt, anyone facing a UWO must consider very carefully how they respond to the authorities. It’s vitally important to take the right advice. Deciding how to proceed when assets worth millions are at stake can be the biggest decision a person ever has to make.
In such circumstances, it will often be the case that an intelligent, robustly-argued challenge to an UWO – and, in particular, to the allegations being made by the law enforcement agency seeking the UWO – will bring success. That success will very much depend on knowing precisely how to respond – and who to turn to – if and when an individual becomes the intended target of an UWO.
Nicola Sharp is Legal Director at Rahman Ravelli