Defending your assets
With law enforcement agencies looking increasingly keen to seize the assets of those in business via unexplained wealth orders, Aziz Rahman of business crime solicitors Rahman Ravelli explains how to protect what is yours.
It appears we are now in an era where the authorities are out to seize people’s assets more than ever before.
Back in February, the National Crime Agency (NCA) announced that it had secured its first unexplained wealth orders (UWO’s) on two properties valued at £22m. A matter of days ago, the FCA let it be known that it had identified between 120 and 140 possible targets for future UWO’s. UWO’s have become a reality – something that many in business may well face in the future.
Those in business, therefore, need to know what UWO’s are and what they are used for.
UWO’s were introduced by the Criminal Finances Act 2017. A UWO can be obtained by the NCA, the Serious Fraud Office, the Crown Prosecution Service, HM Revenue and Customs or the Financial Conduct Authority. It requires an individual to provide information about how a particular asset, for example a house or a car, was acquired. If that individual does not provide an explanation, or provides unsatisfactory evidence, the authorities then have the ability to seize that asset under the Proceeds of Crime Act 2002.
It is a sharp but effective process that gives the authorities a great deal of power – at the expense of anyone who is the subject of a UWO. While the FCA has been the first to use UWO’s, there is no reason to think the other agencies will not follow suit.
UWO’s may be deployed against individuals, companies or trustees. Putting it bluntly, anyone involved in business could be the subject of one if the authorities’ suspicions are aroused, for whatever reason.
UWO’s are controversial as they mean the authorities do not have to prove the person’s assets are the proceeds of crime. A UWO simply assumes criminal activity and makes it the responsibility of the subject to prove that is not the case. And, as UWO’s are a civil law device rather than a criminal law one, when it comes to applying to the court for one, the authorities only have to show that a crime was committed on the balance of probabilities – the civil law standard of proof – rather than beyond reasonable doubt, which is the criminal standard.
So what can someone do if faced with a UWO? First, they need to check to see if the NCA, SFO or whichever agency has applied for the UWO has been completely open with the judge in the application. At application hearings, the person who is the intended subject of the UWO will not be present so the agency making the application is under a duty to put forward any defence point that would have been made had the proposed subject of the UWO been in attendance. The authorities’ failure to do this has, in the past, led to the likes of search warrants and production orders being discharged. It is likely that the same challenges can be made in respect of UWO’s.
It is early days for UWO’s. But the indications are that they will be used against many people in business who the authorities have suspicions about. We are at a time when UWO’s are no longer simply a legal device created by statute: their effect is about to be felt by many.
Anyone who finds themselves on the wrong end of an UWO must take action quickly. This means taking advice about their options and the best way to argue their case. It also means being able to call on clear, accurate and up-to-date business records that can be used as evidence to back up your arguments.
A failure to do so could mean the loss of assets – regardless of whether they were earned legitimately.
Aziz Rahman is founder of Rahman Ravelli; a top-ranked business crime law firm in national and international legal guides.