Unexplained wealth orders (UWOs) have become a powerful legal tool in the fight against financial crime. Initially used by only the UK National Crime Agency, there has been a recent change, with the UK Serious Fraud Office issuing its first UWO.
Introduced as part of the UK government’s effort to combat illicit wealth, UWOs compel individuals to explain the source of their assets, where it is suspected that they have been obtained through unlawful means. However, their implementation has sparked considerable debate and controversy.
In this blog, we will break down what UWOs are, how they work, and why they have been a topic of discussion among legal experts, businesses and individuals alike. We will also highlight Gherson’s role in this area of law, particularly in handling high-profile UWO cases.
What is a UWO?
A UWO, which came into force in January 2018, is a court order that requires an individual or an organisation to explain how an asset (such as property) has been acquired. It is typically issued when there are reasonable grounds to believe that assets belonging to an individual or an entity far exceed their known legitimate income. These orders aim to prevent money laundering and ensure that assets do not remain in the hands of those who have obtained them through illegal means.
What are the legal criteria for a UWO?
The following conditions must be met for a court to grant a UWO:
- The individual or organisation in question must hold property, which must be worth over £50,000.
- There must be reasonable grounds to suspect that either:
- the individual or organisation’s known sources of income would not be sufficient to obtain said property, or
- the property was obtained through unlawful conduct.
If these conditions are met, an enforcement agency will apply to the High Court for a UWO against the individual or organisation in question.
Who can be targeted by a UWO?
UWOs are primarily targeted at three categories of individuals or entities:
- Politically Exposed Persons (PEPs) – Individuals in positions of political power or those closely connected to them.
- Persons suspected of serious crime – This includes individuals who are or have been involved in criminal activities such as fraud, corruption or money laundering.
- Persons connected to criminal activity – Individuals or entities (including corporate bodies) linked to someone suspected of engaging in serious crime.
How are UWOs issued?
- A relevant enforcement authority (such as the National Crime Agency) makes an application to the High Court for a UWO.
- The court is entitled to issue a UWO without prior notice to the individual or organisation in question.
- At the same time, the court can impose an interim freezing order, preventing the individual or organisation from selling or transferring the property in question.
What are the UWO requirements?
An individual or organisation served with a UWO must provide a detailed statement within a strict timeframe in response to specific questions from the High Court, with the latter then making a discretionary ruling on it. The statement must explain:
- The respondent’s interest in the property.
- How the property was acquired.
- The sources of funds used to purchase the property.
- Contain any supporting documentation to validate the respondent’s claims.
What are the consequences of failing to comply with a UWO?
If the respondent fails to comply with the UWO:
- The property in question will be presumed as ‘recoverable’ under the Proceeds of Crime Act 2002.
- Law enforcement agencies can then seize the property under civil recovery proceedings.
- Making a false or misleading statement in response to a UWO is a criminal offence, punishable by imprisonment.
Can a UWO be issued against non-UK residents?
Yes, a person does not need to be a UK resident for a UWO to be issued against them. This has significant implications for individuals with international assets or business dealings.
Why are UWOs controversial?
Despite their intended purpose, UWOs have faced significant criticism due to several key concerns:
- Reversal of the burden of proof – Unlike traditional legal proceedings where the burden of proof lies on law enforcement, UWOs require the targeted person to prove their innocence.
- Lack of conviction requirement – Authorities can issue UWOs against individuals or organisations without proof of criminality.
- Risk of misuse – There is a concern that law enforcement may use UWOs to target individuals or organisations based on weak or politically-motivated allegations.
- Impact on families and associates – The scope of UWOs extends beyond the accused individual or organisation and can affect their family members or business associates, potentially leading to unjust consequences.
What is Gherson’s role in UWO cases?
Gherson LLP has been at the forefront of handling UWO cases and has played a pivotal role in shaping the legal landscape around this controversial tool.
How Gherson can assist
At Gherson LLP, we understand that navigating the intricacies of white-collar crime requires expertise, caution and a proactive approach.
Unexplained wealth orders are a powerful but controversial legal instrument. While they play a crucial role in tackling financial crime, their potential for misuse and impact on individuals and entities without proven criminality make them a topic of significant debate.
Gherson remains a leading authority in defending individuals facing UWOs, ensuring that due process is followed, and that clients receive the best legal representation possible.
If you have any questions about UWOs or require legal advice, contact Thomas Cattee, Partner and expert in White Collar Crime at Gherson LLP.
Please do not hesitate to contact us for further advice, send us an e-mail, or, alternatively, follow us on X, Facebook, or LinkedIn to stay up-to-date.
Updated: 14 February 2025
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 do not 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.
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