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Unexplained Wealth Orders ‘should be used outside of London for greater impact’

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In 2014, Britain issued 1,172 “investor” visas. Applicants were not subject to background checks, but when these were introduced in 2015 the number of visas dropped dramatically to 192. What should we read into this?

Transparency International certainly think it tells a story and they went as far as providing the police with a list of suggested targets of Unexplained Wealth Orders (UWO). While they stopped short of making direct allegations, they pose difficult questions about how named individuals could afford specified properties.

This is all very well, but a sudden increase in the use of a new tool such as UWOs in the enforcement kit can cause problems, especially if the first few are not properly prepared. It erodes their value and encourages later recipients to aggressively defend the allegations. We have seen this before with Deferred Prosecution Agreements and elements of the Bribery Act.

Subject to Treasury backing, politicians see the short term business case, but getting it wrong from the starting blocks can make enforcement difficult in the longer term. The ‘low hanging fruit’ approach is preferred in order to develop expertise, improve protocols and test the judges.

The real long term benefit of UWOs to the government may lie outside of London. It is in the regions, where a greater number of lower value (but still significant) assets are waiting to be identified. However, enforcement resources are scarce and the temptation is to ignore the regional organised crime gangs for the sake of grabbing a headline with an order against a notable oligarch or two; subject of course to maintaining Foreign Office relations with the country from which the target originates. One can see how targets might be chosen by committee, including an assessment of ‘who will we offend?’

London constituents have been complaining for some time to their MPs about unoccupied expensive properties in high rent areas. The volume of those complaints does not easily carry outside the M25. The prosecuting agencies will want to ensure that lessons learned from their London examples can be cascaded to the regional enforcement units, so that scare resources can be reliably applied to more tricky cases where the evidence might not be as transparent as Transparency International would have us all think.

A failure to do this will make it more difficult to obtain credit facilities from the Treasury and will result in more contested applications. The first to complain will be the very politicians who pressed the agencies into greater use of the orders in the first place. As ever, enforcement can either be small steps forward or three steps forward and two steps back. Political sensitivities and pressure on funding mean that the former is more often preferred.




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