The recent investigation of a woman who spent £16 million in Harrods has raised interest in Unexplained Wealth Orders, a type of financial investigatory power designed to tackle fraud and corruption. But what is a UWO, who can issue them and what are the implications for those being investigated?
What is an Unexplained Wealth Order (UWO)?
An Unexplained Wealth Order (UWO) is a relatively new type of financial investigatory power, created following a recent amendment to the Proceeds of Crime Act 2002 (POCA).
UWOs are designed to allow investigating authorities to examine the finances of someone who can reasonably be suspected of involvement – either directly or indirectly – in serious crime.
An UWO requires an individual to explain the nature and extent of their interest in particular property (for example cash or other assets) and to explain how it was obtained, in cases where their known lawful income would be insufficient to allow them to obtain it.
In the case of Zamira Hajiyeva, the wife of an ex-state banker from Azerbaijan who was issued with an UWO after spending £16 million in Harrods, there is a question over how she was able to afford to spend such a significant sum based on her and her husband’s income alone.
Who can issue an Unexplained Wealth Order?
Unexplained Wealth Orders are issued by a High Court Judge, on application by certain investigating authorities, including HMRC, the Serious Fraud Office and the National Crime Agency.
The power to issue an UWO is not available to the wider law enforcement and prosecution community, including the police, except by referral to an eligible authority.
It is possible that other regulatory public bodies with powers of investigation and enforcement, such as specialist police departments, the Environment Agency, the Office of Fair Trade and the Charity Commission, may in future seek to issue UWOs in order to tackle serious and organised crime in specific sectors.
What are the implications of Unexplained Wealth Orders for those under investigation?
Being issued with an Unexplained Wealth Order does not automatically imply any wrongdoing. However, those who are under investigation are required to provide information on their lawful ownership of a property, and the means by which it was obtained.
This information may be referred as evidence to another body to consider criminal or civil action, although it cannot automatically be used against the person who provided it in any subsequent criminal prosecution.
A failure to provide a response to an UWO may be viewed as grounds for civil recovery action. However, 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.
If a person who has been issued with an UWO knowingly makes a false or misleading statement in purported compliance with the order, they may be liable for a hefty fine and/or a sentence of up to two years in prison.
To avoid inadvertent implication of wrongdoing and to ensure that proper procedures are being followed, those finding themselves under investigation by an UWO should seek legal advice as soon as possible.
For more information on matters involving Unexplained Wealth Orders, please contact Regan or Gemma at at firstname.lastname@example.org, or call 0121 201 3765.