The Unexplained Wealth Order (UWO) was incorporated into UK law in January 2018 as part of the Criminal Finances Act 2017. It is a type of court order issued to compel someone to reveal the sources of their unexplained wealth related to assets that are worth more than £50,000. UWO provides regulators and law enforcement more tools to combat tax evasion, money laundering, and terrorism financing.
UWO is somewhat similar to the US Geographic Targeting Orders in detecting the use of high-value assets as tools for illicit activity or financial concealment. The UK has recently seen effects on foreign purchases of real estate that mirror the reduction in cash-for-property transactions in South Florida reported this summer.
"The first successful use of a UWO since its implementation is the recent case of Zamira Hajiyeva, who owns millions of dollars in properties in London through offshore companies. Her husband, Jahangir Hajiyev, was convicted and sentenced to 15 years in prison for fraud and misappropriation of public funds, and authorities were able to identify a clear disparity between his income and the couple’s apparent wealth." (Forbes)
The success of this UWO has been fundamental in beginning to reduce the appeal of the UK as a destination for illicit income. In June, mortgage brokers were already reporting that Russian purchases of prime real estate in London had slowed as a result of both government pressure and a tightening of anti-money laundering rules. There are, however, reasons to be wary of perceiving the introduction of UWOs as a cure-all for the UK’s money laundering problems. These court orders are ineffective as soon as a defendant can provide an explanation for the source of their wealth... Legal difficulties and costs are other factors that can lead to delays in the UK’s fight against money laundering, while information obtained via a UWO cannot be used in criminal proceedings against the respondent.
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