Riches beyond imagination

If you were asked to prove where all of your assets have come from, could you do it?  For myself, I have the mortgage documents for the house, and the original receipt for my car (bought for £4,950 cash in 1987 – yes, that’s 1987), and company accounts since the birth of Thinking about Crime Limited, and personal tax returns for the past seven years.  Whether that would satisfy a court that my assets are legitimately acquired, I cannot say.  But if you are a PEP, or someone suspected of serious criminality, and you have more than £50,000 under suspicion of being dodgy (or, less sensationally, where there are reasonable grounds for suspecting that those assets are disproportionate to your known income), thanks to section 1 of the Criminal Finances Act 2017 (which amends the Proceeds of Crime Act 2002) the UK authorities can now serve you with a unexplained wealth order and compel you to come into court and explain it all.

Opinion is divided on UWOs, as we must learn to call them.  (Reminds me of something vaguely Star War-ish – oh yes, Ewoks.)  Transparency International – the anti-corruption campaigning organisation – is thrilled to see them.  Lawyers are less jubilant, many of them concerned that UWOs are retrospective – in other words, they can be used to target assets that were acquired before UWOs were invented – and that there is no need for proof of criminality to be obtained before an UWO is deployed. If an UWO is “successful” – i.e. it roots out criminal assets – then the next step is likely to be a civil recovery investigation.  And an MLRO might find himself being handed a POCA civil recovery order that is the fruit of an UWO.

We did not invent the UWO, of course – they are already used in other jurisdictions such as Ireland (where they work well) and Australia (where results are more mixed).  And, as far as I know, we have not yet used one.  When we do, lawyers are anticipating numerous challenges, such as how much detail does the respondent have to provide in order to be deemed to have complied with an UWO, and what will be done with the information obtained.  As they say in Ewokese, danvay – or be careful.

This entry was posted in AML, Bribery and corruption, Legislation and tagged , , , , , , , , , , , . Bookmark the permalink.

6 Responses to Riches beyond imagination

  1. CDWOS says:

    So another piece of legislation and/or regulation that may ultimately only defined and scoped by its use!! All we need to do is add “Anti Terrorist” and it will become infinite in its use and scope. The Terrorist has by implication become the friend and accomplice of many Western govts permitting them to bring legislation that is so draconian that it would never otherwise see the light of day – all done in our defence, of course!

  2. Alex Erskine says:

    Continuing in pidgin Ewokese (from, “ta penalty will ehshtee incentive” (the penalty will give incentive).

  3. Pingback: Your money or your life | I hate money laundering

  4. Phil sage says:

    When I am queried by a a client ‘I can’t provide my SOW, or ‘its from investments’ or ‘earned through life’ and they can’t evidence…I don’t believe, HWI are by nature so particular and account for every penny, that’s why they are HWI! They have accountants, they keep records we all do to an extent, so don’t buy the kickback. I can account for every pound earned since 1973 (yes still have first payslip), so if I can a HWI certainly can! If you knock on the door abide by the rules or that door stays close…go elsewhere!

    • Welcome to the blog, Phil, and thank you for your comment. I agree that HWIs are generally good with money because they care about money, and able to afford the best professionals to advise and help them – all of which should generate more records. But I think you are rare in having all your payslips! I keep mine for seven years for the taxman, then another three just for luck, then it’s in the shredder – no room for storage. That said, this is the beauty of the risk-based approach: each firm can make its own decisions about the business it is willing to take, based on the risk it perceives that business to bring. And if you don’t like a HWI with incomplete records, fair enough!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.