1. Introduction
This guidance is issued to raise awareness and a basic understanding
of the provisions of the “unexplained wealth order” and “interim
freezing order”. It is not a statement of law and is not detailed
guidance or interpretation of the power. It should not be relied upon in
operating the powers or in any related proceedings. Officers operating
the powers must be aware of the provisions in, and the codes of practice
issued under, Part 8 of the Proceeds of Crime Act 2002 (POCA). The
legislation also provides a full definition and description of terms
used and the relevant procedures that may be referred to below.
2. Description
The new powers of “unexplained wealth orders” (UWO) and the
supporting “interim freezing orders” commence on 31 January 2018 (except
they will not come into force in Northern Ireland at that time). A UWO
is an investigation order issued by the High Court (Court of Session in
Scotland) on satisfaction of a number of tests.
A UWO requires a person who is reasonably suspected of involvement
in, or of being connected to a person involved in, serious crime to
explain the nature and extent of their interest in particular property,
and to explain how the property was obtained, where there are reasonable
grounds to suspect that the respondent’s known lawfully obtained income
would be insufficient to allow the respondent to obtain the property.
The test for involvement with serious crime is by reference to Part 1 of
the Serious Crime Act 2007.
A UWO can also be applied to politicians or officials from outside
the European Economic Area (EEA), or those associated with them i.e.
Politically Exposed Persons (PEPs). A UWO made in relation to a non-EEA
PEP would not require suspicion of serious criminality.
A UWO is a civil power and an investigation tool. It requires the
respondent to provide information on certain matters (their lawful
ownership of a property, and the means by which it was obtained). It is
important to note that, as an investigation power, a UWO is not (by
itself) a power to recover assets. It is an addition to a number of
powers already available in POCA to investigate and recover the proceeds
of crime and should therefore not be viewed in isolation.
The ability to apply for a UWO is limited to those agencies defined as an “enforcement authority”, namely, in England and Wales;
- the National Crime Agency,
- Her Majesty’s Revenue and Customs,
- the Financial Conduct Authority,
- the Serious Fraud Office, or
- the Crown Prosecution Service)
The specific mandates of these authorities is provided in an annex to
this circular. These mandates will inform the authorities as to the
types of cases in which they may seek a UWO.
In Scotland, the powers are limited to the Scottish Ministers (who act through the Crown Office).
It is therefore not available to the wider law enforcement and
prosecution community, except by referral to an “enforcement authority”.
If evidence is produced in response to a UWO, then a decision will be made on how to proceed using that material.
The subsequent use of the material may include referring the evidence
to another body to consider criminal or civil action. It is important
to note that evidence compelled under a UWO cannot normally be used
against the person who provided it in any subsequent criminal
prosecution.
A failure to provide a response to a UWO may give rise to a
presumption that the property is recoverable under any subsequent civil
recovery action. Civil recovery is a procedure in the High Court (Court
of Session in Scotland) to recover the proceeds of crime (see Part 5 of
POCA). Civil recovery powers are also only available to the enforcement
authorities listed above.
A person commits an offence if, in purported compliance with a
requirement under a UWO, they make a statement that the person knows to
be false or misleading in a material way, or recklessly makes a
statement that is false or misleading in a material way. A person guilty
of an offence is liable to conviction on indictment to imprisonment not
exceeding two years and/or a fine; or on summary conviction, to
imprisonment not exceeding twelve months and/or a fine.
3. Points of interest
Law enforcement agencies and prosecution agencies who do not have
direct access to the powers can consider referring a suitable case to an
enforcement authority. Prior to making a referral, the referrer should
have reasonable grounds for suspicion that an individual, who is either a
PEP or involved in serious crime, has insufficient legitimate income
for the purposes of enabling the individual to obtain specific
identified property (of a value over £50,000), which can be shown to be
in their possession. The enforcement authority can then determine
whether or not an application should be made.
Agencies, including the enforcement authorities, will be required to
consider their legal powers and abilities to share information. This is
both when referring information to each other either to support an
application for a UWO, or to consider civil or criminal action in
regards to the information obtained in UWO.
If information or evidence is referred to an agency, it needs to be
aware of the existence of any ‘interim freezing order’ against a
property and the deadline by which that will be discharged (i.e. any
other power to secure the property will need to be obtained in that
period).
The codes of practice relating to the investigation powers under POCA
are relevant to UWOs. The legal provisions are in sections 1 to 6 of
the Criminal Finances Act 2017 which introduced new sections 362A – 362R
and 396A – 396U of POCA.
