Order, order – Unexplained Wealth Order

There’s nothing new under the sun, they say, and Unexplained Wealth Orders certainly comply with that dictum.  On 21 April 2016 the UK government announced its action plan (these days a simple plan is not enough: it must be galvanised and girded with action) to tackle money laundering and terrorist financing.  As part of the action, there are now two live consultations – one on the UK’s AML supervisory regime (which came in for much criticism from Transparency International) and the other on AML legislation.  (Of course I will be sending in my comments.  Have you ever known me to ignore a call to express my view on anything to do with money laundering?)  One of the proposed changes to the legislation is the introduction of UWOs, to (as the consultation has it) “require individuals to declare their sources of wealth”.

Of course MLROs and their staff have been making, or trying to make, enquiries into their clients’ (or at least, their high risk clients’) source of wealth for years.  But this would be a court order – a legal compunction.  UWOs already exist in a few jurisdictions, including Ireland (where they are known as POCA Orders, as they are provided for in the Proceeds of Crime Act 1996) and Australia.  They have been very successful in the former country and rather a damp squib in the latter.  And I know this because the Americans have very thoughtfully done a lot of research into UWOs and published their findings.  Transparency International has also had a think about them, and they consider that – with “guarantees to avoid the mechanism to be abused and to ensure constitutional guarantees, such as due process and presumption of innocence, are respected” – UWOs could be a useful anti-corruption tool.

No doubt Mrs May and her advisers are alert to all of these deliberations and discussions, and will address all concerns in a timely fashion.  MLROs, meanwhile, will probably smile indulgently and wish her the best of luck with what has proven, in their experience, to be very much easier said than done.

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One Response to Order, order – Unexplained Wealth Order

  1. Robert James Long says:

    I can see the use for them, but I do fear UWO a bit as a tool that could easily be a bit repressive if not implemented properly.

    Personally given the nature of the last few UK governments (Of both main parties I might add) and their treatment of wealthy individuals (sorry, “high net worth” individuals) as absolutely vital for our economic well being I suspect any UK UWO will be easy to avoid, ineffectual or used only on individuals it is politically expedient to use it against (so for example at present I could see it being used against Russian oligarchs given the political situation but not against wealthy Saudi Individuals as the country is our “ally”).

    Honestly I think the issue with AML in the UK from my limited perspective is ntot hat of new legislation or need for new powers, it is political will to take some tough stances and a acceptance that while it is ultimately for the long term good, there may be a bit of short term pain.

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