UK: Explaining Unexplained Wealth Orders

Last Updated: 25 May 2018
Article by Guy Wilkes

Unexplained wealth orders (UWOs) and supporting interim freezing orders were introduced by the Criminal Finances Act 2017 and came into effect on 31 January 2018. Guy Wilkes looks at what they mean for practitioners

What risks do they represent?

A UWO is a court order requiring a person (the respondent) to explain the origin of property that appears to be disproportionate to their known income. A UWO may also require the production of documents.

Within a month of the legislation coming into effect the National Crime Agency (NCA) reported that it had secured two UWOs to investigate assets totalling £22 million that are believed to ultimately be owned by a politically exposed person (PEP).

Failure without reasonable excuse to comply means the property is presumed to be recoverable by enforcement authorities as the proceeds of crime (in proceedings under part 5 of the Proceeds of Crime Act 2002 (POCA)).

When can a UWO be issued?

A judge must be satisfied of three conditions:

  1. that the respondent holds the property in question and its value is greater than £50,000 (this can be a collective value if there is more than one property and it is the value of the property not the value of any equity held in it);
  2. that there are reasonable grounds to suspect that the known sources of the respondent's lawfully obtained income would have been insufficient for the purposes of enabling them to obtain the property; and
  3. that either (i) the respondent is a PEP, or (ii) there are reasonable grounds to suspect that the respondent, or a person connected with them, is or has been involved in serious crime (in the UK or elsewhere).

A PEP is an individual who is, or has been, entrusted with a prominent public function by an international organisation or by a state other than the UK or other European Economic Area state, but also includes family members, known close associates or connected persons.


Applications for a UWO can only be made by specified enforcement authorities:

  • the NCA;
  • the HMRC;
  • the Financial Conduct Authority;
  • the director of the Serious Fraud Office; and
  • the Director of Public Prosecutions.

It is therefore not available to the wider law enforcement and prosecution community, except by referral to an enforcement authority. Applications must be made to the High Court, but can be made ex parte and without notice to the respondent.

Interim freezing orders

An application for an interim freezing order may be made to the High Court as part of a UWO hearing and it should be made at the same time as a UWO. The UWO and interim freezing order may be combined in one document.

An interim freezing order cannot be made in advance of a UWO, nor can it be applied for as an alternative to freezing orders under other provisions.

The only test for the court when considering an application for an interim freezing order is whether making the order is necessary to avoid the risk of frustrating any civil recovery that might subsequently be made. In applying for an interim freezing order, the enforcement authority may also apply for the appointment of a receiver to manage and preserve the property.

In practice it is likely that in most cases an interim freezing order will be sought by the enforcement authority and the NCA reports that the first two UWOs obtained by it were accompanied by interim freezing orders.

The enforcement authority or any person affected by an interim freezing order can apply for the order to be varied or discharged at any time. The power to vary an interim freezing order includes power to exclude property from the order to make exclusions from the dealing with the property to which the order applies. An exclusion may (among other things) make provision to allow for a person to meet their reasonable living or legal expenses or to carry on any trade, business, profession or occupation.

The statement in response

The statement in response to the UWO must be given within the response period set by the court. It must explain the interest in the property, how it was obtained (including, in particular, how any costs incurred in obtaining it were met), details of any trust or settlement by which the property is held, and any other information sought in the order.

The statement can be widely used by law enforcement for investigative and intelligence purposes. It is a criminal offence for a respondent to knowingly/recklessly provide a materially false or misleading statement (punishable by up to two years' imprisonment).

The statement may not be used in criminal proceedings against the respondent, except in a perjury case or where the respondent makes an inconsistent statement in any subsequent prosecution.

Discharging or varying the UWO

Unlike the interim freezing order, there is no express power set out in the Criminal Finances Act 2017 for the respondent or any other person to discharge or vary the UWO. However, the Civil Recovery Proceedings Practice Direction sets out a number of procedural matters in relation to UWOs, including at para.12.1A the power for the enforcement authority or any person affected by the UWO to apply to vary or discharge the order.

For clients who face difficulties in responding to an overly burdensome UWO, consideration should be given to applying to vary the order as an alternative to attempting to comply with those parts which cause difficulty.

However, given that the UWO is an investigation tool only, it is likely that the respondent to a UWO will face a high hurdle in persuading a court to set aside the order. However, failure by the enforcement authority to make full and frank disclosure on the ex parte application may provide grounds

Risk and compliance issues in relation to UWOs

Solicitors acting for clients served with a UWO may in some circumstances have to give thought to their own regulatory obligations, particularly under money laundering legislation. Although in this respect the issues which UWOs present are little different to those present when clients are the subject of similar processes, such as service of civil freezing and disclosure orders.

Anti-money laundering issues

There are few anti-money laundering difficulties to be faced where solicitors are instructed to advise solely on the UWO and related proceedings under POCA. However, solicitors who are or have been separately retained by the client to undertake regulated business as defined in schedule 9 of POCA will have to consider their own obligations under the money laundering regulations and POCA.

Almost certainly the service of a UWO would require a reflection as to whether there are reasonable grounds for suspecting that the respondent is holding the proceeds of crime. The solicitor will accordingly have to consider whether that has triggered an obligation to make a suspicious activity report (SAR) under POCA s.330 in respect of any previous transactions which the solicitor has undertaken for the client or connected person. That will require the solicitor to give careful consideration to the evidence served with the UWO and any information provided by the client, particularly in relation to the source of funds for the transaction in question and source of wealth for the client generally.

While solicitors cannot make disclosure of any privileged information, they will be obliged to disclose non-privileged information regarding the identities of implicated individuals involved in the prior transactions and the location of any property which may comprise the proceeds of crime.

Where a solicitor is retained in respect of an ongoing or anticipated regulated business there are other considerations.

  1. The solicitor will need to consider whether the transaction or any aspect of it is prohibited by any interim freezing order served alongside the UWO.
  2. ill need to revisit the mer due diligence (CDD) previously obtained by the solicitor and consider what further steps are necessary to update and augment the CDD in light of further information obtained in relation to the UWO. For PEPs, solicitors will already have established source of wealth and source of funds and will need to compare and contrast with information served with the UWO, as well as any instructions provided by the client for the purpose of drafting the statement in response. The solicitor will also need to revisit the risk assessment undertaken on the client.
  3. It may be necessary for the solicitor to obtain appropriate consent to undertake the transaction in accordance with ss.335 and 336 of POCA (which the NCA now terms a defence to money laundering or DAML).
  4. The solicitor may also need to advise the client of the need to obtain appropriate consent to undertake the transaction.

In practice, a solicitor instructed to simultaneously advise on a UWO and a separate regulated business retainer will need to carefully weigh up competing obligations to act in the best interests of the client, against the obligation to make appropriate disclosure or disclosures under the SAR regime and duties owed to the court. In some cases a solicitor may decide that it is not possible to do both and may have to terminate either or both retainers.

Who is the client?

By their nature, UWOs are targeted at respondents whom the authorities consider are holding the laundered proceeds of crime. Rarely do money launderers seek to hold property in their own name and, accordingly, the person who holds the property and the ultimate beneficial owner of the property subject to the UWO may be different. In many cases the interests of the holder and beneficial owner will be aligned and the solicitor can act for both. In other cases, there will need to be separate representation.

Difficulties may also present themselves where the holder of the property is a family member or close associate of the implicated PEP, or a person connected to another person who is or has been involved in serious crime. Such an individual may be reliant on the other person involved to give information for the purpose of providing the statement in response to the UWO. In such circumstances, their interests may often be aligned, but in others their interests may conflict (e.g. where an individual's interest derives from an estranged spouse now implicated in wrongdoing).

Looking forward

It remains to be seen how widely UWOs will be used in practice. According to NCA director Donald Toon: 'Unexplained wealth orders have the potential to significantly reduce the appeal of the UK as a destination for illicit income.' However, outgoing director David Green has sought to downplay the extent to which UWOs will be used.

It should be borne in mind that a UWO is a civil power and an investigation tool only and a UWO is not (by itself) a power to recover assets. It is an addition to a number of powers already available in POCA to investigate and recover the proceeds of crime and should therefore not be viewed in isolation. In circumstances where other powers are on hand to obtain relevant information, then a UWO may not be appropriate.

For this reason, the expectation is that UWOs (at least initially) will be used primarily against PEPs rather than persons involved with serious crime where other tools may be available.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions