Unexplained Wealth Orders (UWOs) under the Proceeds of Crime Act 2002 (POCA) are investigative court orders targeting illicit wealth. When facing a UWO, respondents must produce a defence that details the source of their assets and wealth. UWOs are usually accompanied by freezing orders to prevent respondents selling off or transferring their property under investigation. If the respondent fails to comply with the UWO, the property becomes ‘recoverable’ where civil recovery proceedings can commence.
Freezing orders: Action correspondent to UWOs
UWOs alone cannot freeze or seize assets; therefore, they are frequently supplemented by court issued Interim Freezing Orders (IFOs). By preventing the respondent from dissipating, transferring or selling the assets under investigation, the property is ‘locked’ in place to allow proper investigation to take place without third party interference.
IFOs can be varied to allow limited access to funds to pay for reasonable living expenses or costs for legal assistance. The purpose of an IFO is not punishment, but rather to protect assets, ensuring their condition and ownership remain intact pending a final determination.
Procedure for obtaining a freezing order
Whenever a UWO is made, an IFO usually comes hand in hand, and it is common practice for enforcement authorities to apply for the freezing order at the same time as the UWO application. Such applications are typically made ex parte with the respondent will only being informed when both orders are served on them.
In granting an IFO alongside a UWO, it must be demonstrated that it is ‘necessary’ on the facts of the case, where there is a real risk of the assets being sold or transferred. The order, once effected, is usually in place until the enforcement authority decides on next steps.
Responding to a UWO and a freezing order
If you are served with a UWO, it is crucial to seek legal assistance as soon as possible to formulate a defence. Evidence and a clear timeline must be collated to prove the origin of your assets, how it was acquired, and where the funds to purchase assets, or the funds, came to be. Failure to respond by the deadline results in an automatic presumption of the targeted property having criminal origins. Non-compliance almost always results in the seizure and recovery of the assets under POCA 2002.
UWOs may also come with penal notices, resulting in contempt of court if ignored. It is possible that an incomplete defence may result in part of the property being recovered, and part of it being returned. It is imperative that you are honest in your defence as knowingly providing false information or failing to exercise care in verifying evidence before submission, constitutes a criminal offence.
In summary, if a UWO and IFO are served on you, it is important you seek urgent legal advice right away to construct a defence explaining the source of your wealth and assets. To contact Nath Solicitors, please call us on 0203 983 8278 or email us at enquiries@nathsolicitors.co.uk.