National Crime Agency v Baker & Others  EWHC 822 (Admin)
On 19 June 2020, the Court of Appeal (“CA”) dismissed an application to appeal the discharge of three Unexplained Wealth Orders (“UWO”) on the basis that any appeal had ‘no real prospect of success’. The ruling follows the High Court’s finding that there were serious errors in the National Crime Agency’s (‘NCA’) approach to obtaining and maintaining the orders.
In the CA’s decision, Lang J held that the Respondents to the orders had provided “cogent” rebuttal evidence showing that the Property did not in fact belong to a person who was alleged to be connected and involved in serious crime. The slamming judgment also exposed significant holes in the investigation carried out by the NCA, during which it appeared that the only lines of enquiry pursued were those that went against the case of legitimate ownership. The case represents a blow to the NCA, who has continuously taken an overly broad interpretation of the requirements for obtaining UWOs (particularly with regard to the definition of who is a “Politically Exposed Person”) since their introduction in 2018.
In granting UWOs, the High Court must be satisfied that:
- the respondent “holds” property worth over £50,000;
- there are reasonable grounds to suspect that the respondent’s lawful income would not be sufficient to purchase the property;
AND that one of the following apply:
- the respondent is a Politically Exposed Person (“PEP”) or connected to a PEP (e.g. a family member);
- there are reasonable grounds to suspect that the respondent is, or has been, involved in serious crime; or
- a person connected with the respondent has, or has been, involved in serious crime.
In addition to this, the anti-money-laundering toolkit contained in Sections 1-2 of the Criminal Finances Act 2017 allows the High Court to grant an Interim Freezing Order (‘IFO’) over the assets of the respondent, giving them what is often a short period of time to disclose how they legitimately came to own them. Where the subject of such an order fails to comply or the information provided is deemed to fall short of a satisfactory explanation as to the financing of such property, there is a legal presumption that the property is ‘the proceeds of crime’ for the purposes of any future civil recovery proceedings to confiscate the property.
This decision represents a major setback for the NCA and they are now faced with not only a very public humiliation in respect of the case but also a large bill for costs. It may make the NCA more cautious in seeking UWOs in similar circumstances in the future and may impact how the NCA responds to any new information which emerges after having served a UWO on a respondent.
Anyone who is concerned about Unexplained Wealth Orders and would like advice should not hesitate to contact a member of our team. Our firm has considerable experience handling asset forfeiture and confiscation proceedings and is still instructed in the ongoing legal challenge to the first ever UWO which has been running now since 2018.
The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please don’t hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.