News 25th Jul 2018

First UWOs challenged in Court

Ben Cowdock

Investigations Lead

Ben is responsible for leading research into corrupt money entering the UK. He joined TI-UK as an intern in September 2015, helping support the work of the UK advocacy and research team. Ben holds an MA in Governance and Corruption from the University of Sussex.

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This week Transparency International UK has been present at court hearings where claimants are seeking to challenge the first two unexplained wealth orders (UWOs) used by the National Crime Agency at the end of February this year.

UWOs – an investigative tool to help law enforcement act on corrupt assets – were brought into use at the beginning of 2018 after TI-UK successfully campaigned for their introduction in the Criminal Finances Act in 2017. The powers are intended to help UK law enforcement tackle illicit wealth being invested into the UK. In 2017 TI-UK identified £4.4 billion worth of property bought with suspicious wealth.

The individuals involved in the hearings – being held at the Royal Courts of Justice – have been anonymised in line with reporting restrictions around their identities or those of the properties involved. What is known is that Mrs A – the wife of Mr A, a banker from a non-EEA country – is seeking to overturn UWOs targeted against two properties worth a total of £22 million. As a result of the UWOs being granted these properties are currently frozen, meaning Mrs A cannot sell them.

If Mrs A is successful she will not have to answer how she came to be able to afford the properties and they will be unfrozen. If unsuccessful, the UWOs will stand and Mrs A will have to produce evidence showing that she bought the properties with legitimate funds.

As the hearing has progressed it has emerged that the NCA has already identified a number of details relating to the case which they regard as suspicious, including complex corporate structures featuring a British Virgin Islands company and trusts in Guernsey used to hold the properties. The NCA also presented evidence of Mrs A spending millions of pounds over the course of ten years at Harrods, including tens of thousands of pounds in purchases in some weeks.

The court also heard evidence indicating that the family of Mrs A benefited from Tier 1 investor visas. In 2015 Transparency International UK identified that this scheme was vulnerable to money laundering between 2008 and 2015 due to a lack of due diligence checks on visa applicants by banks or the Home Office.

TI-UK is pleased that UWOs are starting to be applied in practice and also welcome the decision by Justice Supperstone to hold the hearing in public, in the interest of open justice. We will continue to monitor this case closely as well as the broader use of UWOs in the fight against dirty money in the UK.