The UK government is planning to limit the financial risk law enforcement agencies face from using unidentified wealth orders as part of efforts to stop dirty money flowing through the City of London.
The reforms, which will be part of the long-delayed Economic Crimes Act, will limit the costs of pursuing unsuccessful UWOs by letting courts assess appropriate costs, set pre-determined rates or award no costs at all.
According to a government document seen by the Financial Times, officials are concerned that the potentially high cost of failed UWO applications has prevented investigators from using them. It said that “agents should not be exposed to high financial risks if they act in good faith and present sound cases”.
The UK’s “loser pays” cost system means the loser usually pays the other side’s costs, which can be huge legal bills for cash-strapped law enforcement agencies.
UWO has been rarely used since its launch in 2018. Although they are available to many agencies including HM Revenues & Custom and the Serious Fraud Office, only the National Crime Agency has so far provided the service.
The NCA has issued UWOs in only four investigations, but the High Court struck down them in one case. The orders are designed to help tackle the huge amount of ill-gotten money looted through the UK, allowing investigators to question suspects with assets in excess of £50,000 to explain how they can afford it if their income appears to be insufficient.
Alun Milford, a former prosecutor and now a partner at the law firm Kingsley Napley, said the public sector budget meant the crime-fighting agency “had little capacity to pay the total seven figures”, adding that “the government needs to do something” Creative approx. . . financial support. . . to cover unfavorable costs, or to change the rules. “
Other potential reforms in the Economic Offences Act would make it easier to seek UWOs where assets are held in complex corporate structures.
The government has been criticized for delaying the introduction of the new bill to parliament, which influential Conservative MPs believe will help communicate Ukraine issues to Russian President Vladimir Putin.
The legislation aims to address some of the loopholes responsible for £100bn of ‘dirty money’ NCA is estimated to flow through the UK each year.
The bill is also expected to contain changes to company buildings, which officials say will make it “more difficult to set up companies” and increase transparency for overseas owners of British property.
Other measures envisaged in the bill aim to use the crypto market to address money laundering. “We know that cryptocurrencies are heavily used for money laundering, and we are looking at how to ensure that there is a reasonable, legal regulatory regime for seizing funds,” an official said.
The government did not immediately respond to a request for comment.
In addition, the Ministry of the Interior comfirmed On Thursday, it will immediately scrap the so-called “golden visa” system. The Tier 1 ‘Investor Visa’ route has in the past attracted wealthy Russian and other international investors who resettled in the UK under the scheme.