The National Crime Agency (NCA) has been granted two “unexplained wealth orders” (UWOs) to investigate whether two properties in Britain were purchased with illicit funds by a politically exposed person (PEP) allegedly from Central Asia.
The individual is the first person in the UK to be subject of a UWO, since the order came into force on 31 January 2018.
The property portfolio of the PEP subject to investigation amounts to £22million. The NCA has confirmed that the individual cannot be identified publicly at present, as they have been given time to respond to the orders’ demands for further information and documentation.
The orders relate specifically to a property in London and another property in the south-east of England. At present, the PEP has been barred from selling or transferring the properties while the inquiry is being carried out.
Rachel Davies Teka of Transparency International UK said: “The introduction of UWOs is a significant moment in the fight against dirty money flowing into the UK. They will allow law enforcement to much more easily investigate assets that are highly likely to have been bought using corrupt money, often stolen from populations in some of the poorest parts of the world”.
Transparency International have advocated UWOs since 2014 hope that that the introduction and application of these powers will discourage corrupt individuals from seeking to launder dirty money through prime real estate in the UK in the future.
·Part 1 of the Criminal Finances Act introduced a new measure: Unexplained Wealth Orders – a legal tool that will provide stronger powers for UK law enforcement to seize and repatriate the proceeds of corruption or involvement in serious crime.
·UWOs force subjects to explain assets that do not appear proportionate to their income. A failure to comply truthfully can lead to enforcement agencies arguing in court that the assets in question are likely the proceeds of crime. This information can then be used in a separate civil recovery process.
·Donald Toon, the NCA’S head of economic crime highlighted that the object of the UWOs is “ to reduce the appeal of the UK as a destination for illicit income”.
·PEPs are defined as individuals entrusted with prominent public functions, including: heads of states, deputies or assistant ministers, members of parliament, ambassadors, directors of international organisations, members of supreme courts, etc.
·Final Guidance on the treatment of PEPs from the FCA reinstates how the MLRs set out that all firms must apply a risk-sensitive approach to identifying PEPs and then applying enhanced due diligence measures. The legislation and guidance clarifies that a case-by-case basis is required with the risk assessment of individual PEPs, rather than applying a generic approach to all PEPs.
·The regulations require firms to have in place appropriate risk management systems and procedures to determine whether a customer, or the beneficial owner of a customer, is a PEP (or an associate of a PEP, or a family member of a PEP) and to manage the risks that arise from a firm’s relationship with that customer.
·Lysis work with Financial Crime compliance functions to review their firm’s financial crime provisions and to design and implement improvements. We can review and enhance policies on PEP’s, proceduralise them and provide training on those policies and procedures and on general AML themes.
·Lysis can also review the coverage and capabilities of a firm’s AML regime and recommend improvements.
·Lysis can provide on-going KYC and QA Support Our services provide coverage across the full spectrum of client on-boarding, periodic review and KYC remediation. We also provide AML remediation services. Our services can be delivered on-site at our clients’ premises or near-shore at our secure Operations centre in London.
Lysis can provide on-going KYC and QA Support Our services provide coverage across the full spectrum of client on-boarding, periodic review and KYC remediation. We also provide AML remediation services. Our services can be delivered on-site at our clients’ premises or near-shore at our secure Operatio