UWO: taking the proceeds of crime from those who cannot prove legitimate provenance.

Unexplained Wealth Orders (UWOs) are powerful tools for combating corruption and recovering the proceeds of crime.

• UWOs are civil orders, meaning they do not require a criminal conviction to be enforced.
• This makes them particularly effective in cases where proving a direct link between assets and criminal activity is challenging.
• They shift the burden of proof to the property owner, who must demonstrate that their wealth has a legitimate origin.
• These orders have been used in high-profile cases [3 below], highlighting their role in tackling illicit finance and corruption.

“UNEXPLAINED WEALTH ORDERS: TOWARD A NEW FRONTIER IN ASSET RECOVERY” A WORLD BANK REPORT PUBLISHED IN JUNE 2023.

• The report explores the use of Unexplained Wealth Orders (UWOs) as a tool for asset recovery, particularly in cases involving corruption and kleptocracy.
• The report aims to guide policymakers in considering the implementation of UWO systems, emphasising the need for these systems to be part of a comprehensive legal framework tailored to each country’s specific context.

WORLD BANK REPORT [JUNE 2023] KEY POINTS:

• Purpose of UWOs: UWOs require individuals suspected of serious crimes to explain the origins of their wealth when there is a significant discrepancy between their income and assets.
• Civil Action: Unlike criminal proceedings, UWOs are civil actions, making them valuable tools for tracing and recovering assets across borders.
• Policy Recommendations: The report suggests developing UWO policies and recommends future efforts to combat money laundering and corruption.
• Global Context: It places UWOs within the broader context of asset recovery tools and discusses their potential to fill gaps in existing systems.

UK

• Introduced in the UK by the Criminal Finances Act 2017, UWOs compel individuals to explain the source of their wealth when it appears disproportionate to their known income.
• The assets can be seized if they cannot provide a satisfactory explanation.

JERSEY

• In Jersey, authorities utilise Unexplained Wealth Orders (UWOs) as part of their broader strategy to combat financial crime and money laundering.

IN JERSEY HERE IS HOW THEY APPLY THE CONCEPT:

1. Legal Framework: Jersey’s approach is governed by the FORFEITURE OF ASSETS (CIVIL PROCEEDINGS) (JERSEY) LAW 2018. This law allows for the civil forfeiture of assets without a criminal conviction.
2. Application of UWOs: Authorities can issue UWOs to individuals or entities suspected of holding assets disproportionate to their known income. The burden of proof is shifted to the asset holder, who must demonstrate that their wealth was acquired through legitimate means.
3. Impact on Trusts: Given Jersey’s status as a financial centre with numerous trusts, UWOs can significantly impact offshore trusts. The law enables authorities to target assets held within these trusts if there is suspicion of illicit wealth.
4. Case Examples: Notable cases have involved UWOs and the non-conviction confiscation regime, providing insights into the courts’ approach to tackling financial crime through civil proceedings.
5. Since 2018, Several successful applications have already been made, with the proceeds now held in the Criminal Offences Confiscation Fund (COCF), ultimately benefiting the people of Jersey.

TWO JERSEY EXAMPLES FROM 2019

• The most significant successful application under the 2018 Forfeiture of Assets Law was concluded in 2019, with more than US$ 10 million paid into Jersey's Criminal Offences Confiscation Fund (COCF).
• The case is referred to as the Truk Settlement below.
• The Truk Settlement is a notable case involving confiscating assets linked to organised crime.
• Also, Ian Joseph Ellis, a taxi driver from Glasgow, was involved in a notable case of tax evasion and money laundering.
• In the case of Ian Joseph Ellis, the amount seized was £33,804.52. This sum was held in a dormant account at Standard Chartered Bank in Jersey and was confiscated due to its connection to tax evasion and money laundering activities.
• https://www.comsuregroup.com/news/jersey-s-confiscations-under-the-forfeiture-civil-law-jersey-s-uwo/

THREE CASES

The following Three notable cases show how the authorities used UWOs to investigate suspicious assets:

1. Zamira Hajiyeva - The Harrods Shopper Case (UK)
1. Zamira Hajiyeva, wife of a jailed Azerbaijani banker. She owned an £11.5 million London house through a British Virgin Islands company and a golf club in Berkshire through a Guernsey trust structure
2. Her husband's official banker's salary couldn't explain this wealth.
3. When served with a UWO, her unsuccessful attempts to fight it eventually led to the seizure of over £20 million in property, plus £3.2 million worth of jewellery still being contested.
4. https://nationalcrimeagency.gov.uk/news/court-dismisses-uwo-appeal-by-zamira-hajiyeva
2. Mansoor Hussain - The Property Developer Case (UK)
1. Property developer Mansoor Hussain was forced to hand over £10 million in assets after receiving a UWO.   
2. Hussain provided a 76-page statement and 127 evidence binders when ordered to explain his wealth.
3. This extensive documentation helped investigators identify even more suspicious property!
4. The case ended with him surrendering 45 properties, cash, and other assets.
3. General Sani Abacha's family - The Nigerian Dictator's Assets (🇮🇪 Ireland)
1. In an international case, Ireland's Criminal Assets Bureau tracked down US$6.5 million in investment bonds connected to the late Nigerian dictator General Sani Abacha's family.
2. The money trail showed funds were taken directly from Nigeria's Central Bank and laundered through Switzerland, London, and New York before reaching Ireland.
3. In 2020, Ireland and Nigeria signed an agreement to return these assets.

SOURCES

• https://www.comsuregroup.com/news/jersey-s-confiscations-under-the-forfeiture-civil-law-jersey-s-uwo/
• https://star.worldbank.org/publications/unexplained-wealth-orders-toward-new-frontier-asset-recovery
• https://star.worldbank.org/sites/default/files/2023-06/StAR-wealth-report-08.pdf
• https://openknowledge.worldbank.org/entities/publication/356d005d-cf01-4e6f-8ecd-d5e6f33e9766
• Developing external threats to offshore trusts: unexplained wealth .... https://academic.oup.com/tandt/article-abstract/26/5/420/5827772.
• UNEXPLAINED WEALTH ORDER AS AN ANTI-CORRUPTION TOOL - Knowledge Hub. https://knowledgehub.transparency.org/assets/uploads/helpdesk/Unexplained_wealth_order_as_an_anti-corruption_tool_2015.pdf.
• Unexplained Wealth Orders - Collas Crill. https://www.collascrill.com/articles/unexplained-wealth-orders/.
• Unexplained Wealth Orders – the key issues - Taylor Wessing. https://www.taylorwessing.com/en/insights-and-events/insights/2019/01/unexplained-wealth-orders-the-key-issues.
• Developing external threats to offshore trusts: unexplained wealth orders and forfeiture of assets under the Forfeiture of Assets (Civil Proceedings) (Jersey) Law 2018 = https://doi.org/10.1093/tandt/ttaa030. / https://academic.oup.com/tandt/article-abstract/26/5/420/5827772?redirectedFrom=fulltext