Fighting global illicit financial flows at home

Challenge

Evidence shows that corrupt individuals, including from developing countries, can use OECD countries, including the United Kingdom, to move and store their illicit finances, for example, in the real-estate sector. The United Kingdom considers that corruption is a major impediment to global sustainable development and a threat to national security. Fighting corruption has therefore become a priority for its development co-operation and foreign policy. As part of its response, the United Kingdom has adopted a whole-of-government approach to tackling illicit financial flows and corruption. A particular challenge is obtaining investigative information leading to the recovery of the proceeds of crime, especially, for example, where other jurisdictions are not co-operative.

Approach

The Criminal Finances Act 2017 introduced the Unexplained Wealth Orders (UWOs) tool. UWOs assist law enforcement in obtaining information which cannot be obtained any other way. Key features of the tool include:

• Reversing the burden of proof based on three important requirements:

  • The total property has a value of at least GBP 50 000.

  • The owner is reasonably suspected to be involved in or connected to a serious crime or is a politically exposed person (or is associated with one) from outside the United Kingdom or the European Economic Area.

  • There are reasonable grounds for suspecting that the owner’s lawfully obtained income would be insufficient for acquiring the property.

• Use in civil recovery proceedings. If a respondent fails to comply with the UWO without reasonable excuse, the property concerned will be presumed to be recoverable.

• A new property freezing power to accompany the UWO. An Interim Freezing Order (IFO) can be sought alongside a UWO if there is deemed to be a high risk of the property being dissipated.

• Use reserved for specialised agencies only. Only five agencies in the United Kingdom can make use of UWOs. They have specialist knowledge and skills, work on cases linked to serious and organised crime, and can use civil recovery in court.

Results

Since their introduction in January 2018 until April 2021, UWOs have been granted in four cases against property worth more than GBP 140 million, including in cases where wealth was suspected to have been acquired in developing countries. Interim freezing orders were obtained in all these cases. All four cases were led by the UK National Crime Agency.

In October 2020, GBP 10 million was recovered from an individual linked to serious crime following the use of a UWO (NCA v. Hussain).

In April 2020, four UWOs in one case were discharged following an appeal by the respondents (NCA v. Baker & Others).

Due to the nature of potential respondents, especially politically exposed persons, agencies may face high costs when using a UWO.