Since 31 January 2018, the UK courts have had the power to make Unexplained Wealth Orders (“UWOs”), which require the respondent to explain how he paid for assets that he owns in the UK.
An UWO can be made at the application of various UK law enforcement authorities against a non-EEA politically exposed person (“PEP”), or a person the court reasonably believes to be involved in, or connected to a person involved in, serious crime, with assets in the UK.
An UWO requires the respondent to set out the nature and extent of his interest in a particular asset, and explain how he obtained and paid for it. It can be accompanied by a freezing order in respect of the asset in question, if that is necessary to avoid the risk that any further enforcement action is frustrated by a disposal of the asset.
These new powers have been the subject of considerable media discussion, particularly concerning the possibility of their use against prominent foreign citizens.
In this memo, we discuss the requirements for the court to make an UWO, what effect one would have, and consider who may be targeted.