Editorial
| DOI | https://doi.org/10.1108/JMLC-08-2018-0051 |
| Date | 01 October 2018 |
| Published date | 01 October 2018 |
| Pages | 478-480 |
| Author | Veltrice Tan |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
Editorial
Unexplained wealth orders: the tussle between combating money-laundering
and protecting fundamental human rights
This paper outlines the recent implementation of the Unexplained Wealth Orders (“UWOs”)
within the United Kingdom, which was effected by the Criminal Finances Act 2017 on the
31st of January 2018. The purpose of this paper is to address potential human rights issues
that may arise from the investigativefunctions of UWOs.
It is a well-established fact that money-laundering remains a pertinent issue within the
financial and banking industry. The implementation of various anti-money laundering
regimes alongside the enhancement of enforcement powersclearly indicates that authorities
are constantly striving to eliminate any potential laundering acts. Apace with the financial
industry, the problem of money-laundering is also entrenched within the real-estate
industry. As money-laundering activities are effortlessly disguised amongst massive
numbers of real-estate transactions, it becomes exceedingly arduous to uncover real-estate
transactions that are affiliated with money-laundering or terrorist financing activities
(Financial Action Task Force,June 2007).
The UK has been recently plagued by the presence of illicit Russian funds which have
infiltrated into the UK’s property market;the scale of dirty money that has been mixed with
legitimate funds remainsarbitrary and undetectable. It is therefore unsurprisingthat the UK
had recently implementedthe Unexplained Wealth Orders (“UWO”), to which it was effected
by the Criminal FinancesAct 2017 on the 31 January 2018.
Essentially, the introduction of UWOs signifies a huge step towards combating money-
laundering due to severalreasons. First, where there is a conspicuous inconsistency with the
legal income of politically exposed persons (“PEP”)or suspected criminals and the value of
an asset (worth £50,000 or more), the burden is on them to explain how they can affordsuch
an asset. The shifting of the burden from the investigators to the investigated provides a
compelling investigative tool for enforcement agencies. This is because enforcement
authorities often have difficultiesin distinguishing illegitimatetransactions from those that
are legitimate, to which the shifting of the burden of prove enhances the likelihood that
authorities maysuccessfully convict alleged offenders for money-laundering.
Second, UWOs are “civil”, and not “criminal”investigative tools. The incorporation of a
civil standard results in the lowering of the burden of proof on part of enforcement
authorities. Thereupon,authorities merely have the burden of showing “reasonable grounds
of suspicion”rather than the criminal standard of “beyond a reasonable doubt”. As the
imposition of UWOs is based on reasonableness and probability, and not certitude, this
gives the impression that UWOs provides an imperative platform for authorities to fight
against money-launderingwithin the real-estate industry.
Finally, UWOs encapsulates a spectrum of properties within its operative scope. Given
the fact that properties can be captured by UWOs regardless of where they are located, the
elimination of the need to prove a nexus between a property and the UK arguably grants
authorities with efficaciousdominance over alleged money launderers.
Notwithstanding the potential for UWOs to act as an effective investigative tool, the
operation of UWOs may contravene fundamental human rights. Ostentatiously, human
rights activists are often galvanized by issues pertaining to the protection of white-collar
criminals; the associationof how white-collar criminals deserve the same rights as any other
criminals is well-founded. Despite assertions that white-collar criminals deserve to be
JMLC
21,4
478
Journalof Money Laundering
Control
Vol.21 No. 4, 2018
pp. 478-480
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-08-2018-0051
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