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Economic Crime (Transparency And Enforcement) Act 2022

Contents

Part 2 - Unexplained Wealth Orders 

The Responsible Officers 

Section 45: Imposition of unexplained wealth orders on officers etc of property holder: England and Wales and Northern Ireland

  1. This section inserts a new category of persons who may be specified in a UWO, referred to as "responsible officers".  
  2. The definition of specified responsible officer is given in new section 362A(8), and means that, in a case where the respondent is not an individual, the application may also specify a person who is a responsible officer of the respondent (a "specified responsible officer"); and a person specified may include a person outside the United Kingdom.  
  3. In practice, this means increasing the scope of existing powers to enable UWOs to seek information more easily from persons who are officers of legal entities thought to have control over the asset, and therefore subject to the obligation to provide the information sought by it, even though the responsible officer is not the property holder. This is to ensure that individuals cannot hide behind complex ownership structures.  

Section 46: Imposition of unexplained wealth orders on officers etc of property holder: Scotland 

  1. This section amends section 396A of POCA to provide equivalent provisions for the new category of specified responsible officers in Scotland. 

The Income Requirement 

Section 47: Alternative test to the income requirement: England and Wales and Northern Ireland

  1. This section amends the existing income requirement to include a new test, which focuses upon there being reasonable grounds to suspect that property that is the subject of the UWO application has been obtained through unlawful conduct.  
  2. When seeking a UWO against a respondent, an enforcement authority will have the flexibility to satisfy the court that either the existing income requirement in section 362B (3) of POCA or the new alternative income requirement (to which this note corresponds) can be met.

Section 48: Alternative test to the income requirement: Scotland

  1. This section amends section 396B (3) of POCA to provide equivalent provisions for the alternative test to the income requirement in Scotland. 

The Interim Freezing Order time limit 

Section 49: Power to extend period for which interim freezing order has effect: England and Wales and Northern Ireland

  1. This section amends sections 362D and 362K of POCA, and inserts sections 362DA and 362DB into POCA to allow the High Court to grant an additional 126 days to enforcement authorities who receive material provided in response to a UWO on application. Subsection (1) of new section 362DA outlines the safeguards which must be met before an extension can be made.  
  2. In practice this increases the maximum statutory time period afforded to enforcement authorities to review material provided to them in response to a UWO before a corresponding freezing order expires. This strikes an appropriate balance between the rights of the individual and the time needed for law enforcement to have sufficient time to investigate a case.  
  3. This allows for the initial 60-day time period to be extended in intervals of up to 63 days, totaling a review period of no more than 186 days.  

Section 50: Power to extend period for which interim freezing order has effect: Scotland

  1. This section amends section 396D of POCA and inserts sections 396DA and 396DB into POCA to provide equivalent provisions enabling the Court of Session to extend the period for which the interim freezing order has effect in Scotland.

Annual Reports

Section 51: Annual report on unexplained wealth orders

  1. This section inserts a new requirement into section 362IA of POCA which imposes a statutory obligation on the Secretary of State to lay an annual report on UWOs during the relevant period of 12 months. This report will specify the number of UWOs made by the High Court and the number of applications across all enforcement authorities.

Costs of Proceedings 

Section 52: Limits on costs orders in relation to unexplained wealth orders: England and Wales and Northern Ireland  

  1. This section inserts a new section 362U into POCA to provide for the High Court to limit an enforcement authority’s liability by protecting them from any costs which could be awarded against them in UWO proceedings, unless the applicant enforcement authority seeking the UWO has acted dishonestly, unreasonably, or improperly. The relevant proceedings are listed in subsection (1). 

Section 53: Limits on costs orders in relation to unexplained wealth orders: Scotland 

  1. This section inserts a new section 396V into POCA to provide equivalent provisions for limits on costs orders in relation to UWOs in Scotland.

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