Legal challenge issued against unexplained wealth order

Out-Law News | 27 Jul 2018 | 9:44 am | 2 min. read

The wife of a jailed banker has lodged a legal challenge against an 'unexplained wealth order' obtained against her by the National Crime Agency (NCA) in the UK, according to the BBC.

Unexplained wealth orders were only introduced earlier this year. In February, the NCA announced that it had secured the first two such orders that had been granted as part of its investigations into "assets totalling £22m that are believed to ultimately be owned by a politically exposed person (PEP)".

In applying to the High Court for an unexplained wealth order,the NCA or other agencies that have the power to obtain them, such as HM Revenue & Customs (HMRC) and the Serious Fraud Office, have to show there is reasonable cause to believe the individual who would be subject to the order holds property worth more than £50,000 and that there are reasonable grounds for suspecting that the individuals' known income would not explain the ownership of the property.

To grant the order the judge also needs to be satisfied that the individual is a politically exposed person, or there are reasonable grounds for suspecting that they or a person connected with them have been involved in serious crime, including tax evasion.

An individual who receives an unexplained wealth order has to explain the source of the asset within the time period set by the court. If they are unable or refuse to explain adequately the source of their wealth, the property is presumed to be recoverable property through the civil recovery regime under the Proceeds of Crime Act.

According to the BBC's report, the NCA's unexplained wealth orders relate to assets owned by 'Mr A', an unnamed former state banker from a country outside the European Economic Area who was jailed overseas for fraud.

Mr A's wife, Mrs A, was issued with one of the unexplained wealth orders obtained by the NCA in February. The BBC reported that Mrs A has challenged the decision to issue an order against her and that, in a hearing before the High Court, she had rejected claims made by the NCA that Mr A had used stolen funds to buy two UK properties and instead said the properties had been bought using money earned through Mr A's legitimate overseas business dealings. Identifying details of the couple cannot be reported, the BBC said.

Specialist in anti-corruption and regulatory compliance Laura Gillespie of Pinsent Masons, the law firm behind, said: "The NCA clearly wants to send a message of its intention to tackle international corruption. The first order was secured within weeks of the legislation coming into force and at that time, the director for economic crime in the NCA clearly stated that unexplained wealth orders would enable it to 'target the problem of money laundering through prime real estate in London and elsewhere'."

"Whilst not a direct remedy in itself, the clear advantage of unexplained wealth orders is that they expose the source of funds and enforcement agencies can then take a decision on how to use that evidence; whether that be through criminal or civil proceedings," she said.