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War on illicit wealth

Member: Nifa

Earlier this year, the Government introduced new powers in the form of Unexplained Wealth Orders, which allow the authorities to seize assets valued at more than £50,000 until the owners account for how those assets were acquired.

The idea behind these orders is to help curb the UK’s status as a haven for ill-gotten gains.  According to estimates, around £90 billion of illegal cash is laundered in the UK every year, much of it passing through London’s financial firms and the city’s property market.  An Unexplained Wealth Order requires an individual to explain how they obtained property if it cannot be accounted for by that person’s known income.

Dozens of targets have already been identified, with two test cases being readied for the Courts. Anyone receiving such an Order has to explain the source of the asset within the time period set by the Court.

If they are unable or refuse to explain adequately the source of their wealth, the property is presumed to be recoverable property through the civil recovery regime under the Proceeds of Crime Act.  According to Security Minister, Ben Wallace, the Government is sending criminals the message that “we will come for you, for your assets and we will make the environment that you live in difficult.”

Unexplained Wealth Orders will entail potentially extensive forensic investigations, which can demonstrate the origins of an individual’s wealth and whether it has travelled through illegal channels to fund a property purchase or a luxurious lifestyle.

Unexplained spending can signal that money has been obtained through illegal means and is one of the tests forensic accountants apply when looking for evidence of illicit gains.

Author: Roger Isaacs, 12 February 2018

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