A partner at Charles Anthony LLP, an international
law, business crime and asset recovery firm in Lagos, Jonathan
Akinsanya, practices as a senior criminal defence barrister in
London. He has over 20 years experience at the England & Wales’
Bar. In this article, he writes that following recent changes to
United Kingdom’s law, Nigerians risk losing their
assets.
Last year, the Federal Republic of Nigeria implemented an
opportunity for all tax payers to regularise their tax status. The
concern was that Nigeria’s low tax revenues are at variance with
the lifestyle of a large number of its people and their worldwide
assets. In light of these factors Nigeria signed up for the
establishment of the Beneficial Ownership Register at the
Anti-Corruption Summit in London in 2016.
On the 3rd February 2018 the Minister of Finance of the Federal
Republic of Nigeria, Hon. Mrs Kemi Adeosun advised Nigerians with
property in the United Kingdom (UK) to take advantage of Nigeria’s
Voluntary Assets and Income Declaration Scheme (VAIDS) in order to
escape ‘the hammer of the UK’s new Unexplained Wealth Orders’.
Proceeds of crime have been a problematic issue all over the
world for many years. The UK has been at the forefront of
establishing legal frameworks in an attempt to deal with it.
However, despite the UK government’s attempts to plug the holes, it
was considered that critical gaps remained in the legal framework
that enabled those, be it individuals or companies, with corrupt
intent were taking advantage. A taskforce of professionals in the
area of asset recovery identified that the current asset recovery
regime has a number of deficiencies, namely:
‘The levels of asset recovery are relatively low.
The law enforcement agencies are given Inadequate time to
investigate suspicious transactions – currently the investigators
have 31 days to investigate and build sufficient evidence to act on
suspicious transactions
Law enforcement agencies are under resourced.
The current legal framework for asset recovery is reliant on a
conviction in the origin country’
In order to remedy the aforementioned gaps in the legislation
the UK Government has relatively recently introduced Unexplained
Wealth Orders (UWO).
So what is a UWO?
It is a measure inserted into the Proceeds of Crime Act 2002
(hereinafter “POCA”) by Part 1 of the Criminal Finances Act 2017.
The new section 362A POCA now gives any law enforcement agency the
power to make an application to a High Court judge for a UWO and
such an application may be made Ex-parte, i.e. without notice. Any
application made under this provision must contain various details
including naming the relevant property and who is said to own
it.
Before a High Court judge makes a UWO he must be satisfied that
there is reasonable cause to believe that the respondent in the
said case holds the property, and that the value of the property is
greater than £50,000.
In addition, a High Court judge must be satisfied that there are
reasonable grounds for suspecting that the known sources of the
respondent’s lawfully obtained income would have been insufficient
for the purposes of enabling him to obtain the property with is the
subject of the UWO.
The Act sets out what criteria can constitute “reasonable
grounds” for the High Court and this includes “known sources of the
respondent’s income are the sources of income that are reasonably
ascertainable from information at the time of the making of the
application for the order”. Income is lawfully obtained if it is
obtained lawfully under the laws of the country from where the
income arises”.
The specified person (hereinafter “the respondent”) must be a
politically exposed person, or there are reasonable grounds for
suspecting that the respondent is, or has been, involved in serious
crime (whether in the UK or elsewhere) or a person connected with
the respondent is, or has been so involved. The Act defines a
politically exposed person. What is this definition?
What is the Practical effect of a UWO?
The practical effect of a UWO is that, once the order is made
the respondent is required to provide to the court an explanation
of how he/she obtained the property which is the subject of the
UWO.
What is the Effect of non-compliance with
UWO
If the respondent fails to comply with the requirements of the
UWO without reasonable excuse before the end of the response period
set by the court, the presumption is that the property is
recoverable (forfeited) for the purposes of any proceedings taken
in respect of the property unless the contrary is shown – the
presumption only applies in relation to the property:
Relating to the respondent’s interest in the property, and Only
if the value of that interest is greater than £50,000
Does the UWO carry criminal liability?
The Unexplained Wealth Order has no criminal liability attached
to it, save where there are false or misleading statements made in
the purported compliance with a requirement imposed by the UWO.
It is an entirely civil measure which allows the law enforcement
agencies to recover and/or restrain (forfeit) the property without
resorting to criminal procedures and/or sanctions. Its use is
limited to perceived illicit assets owned by government officials
(including family members or close associates) or those with links
to serious crime –serious crime includes money laundering, bribery
and corruption, fraudulent evasion of income tax. Another important
feature is that it shifts the burden of proof onto the respondent
to demonstrate the legitimacy of the funds used to acquire the
property, the subject matter of the UWO.
It is clear that we have entered a new dawn in Nigeria – the
Federal Ministry of Finance is gathering information on individuals
(and companies) through international asset tracing professionals
and where there is evidence of politically exposed persons or a
Nigerian is involved in serious crime e.g. tax evasion, money
laundering who have acquired property in the UK then a complaint
can be made to a law enforcement agency in the UK who will proceed
to apply for a UWO from the High Court. The days of being able to
hide assets in the UK appear to be over!
A partner at Charles Anthony LLP, an international
law, business crime and asset recovery firm in Lagos, Jonathan
Akinsanya, practices as a senior criminal defence barrister in
London. He has over 20 years experience at the England & Wales’
Bar. In this article, he writes that following recent changes to
United Kingdom’s law, Nigerians risk losing their
assets.
Last year, the Federal Republic of Nigeria implemented an
opportunity for all tax payers to regularise their tax status. The
concern was that Nigeria’s low tax revenues are at variance with
the lifestyle of a large number of its people and their worldwide
assets. In light of these factors Nigeria signed up for the
establishment of the Beneficial Ownership Register at the
Anti-Corruption Summit in London in 2016.
On the 3rd February 2018 the Minister of Finance of the Federal
Republic of Nigeria, Hon. Mrs Kemi Adeosun advised Nigerians with
property in the United Kingdom (UK) to take advantage of Nigeria’s
Voluntary Assets and Income Declaration Scheme (VAIDS) in order to
escape ‘the hammer of the UK’s new Unexplained Wealth Orders’.
Proceeds of crime have been a problematic issue all over the
world for many years. The UK has been at the forefront of
establishing legal frameworks in an attempt to deal with it.
However, despite the UK government’s attempts to plug the holes, it
was considered that critical gaps remained in the legal framework
that enabled those, be it individuals or companies, with corrupt
intent were taking advantage. A taskforce of professionals in the
area of asset recovery identified that the current asset recovery
regime has a number of deficiencies, namely:
‘The levels of asset recovery are relatively low.
The law enforcement agencies are given Inadequate time to
investigate suspicious transactions – currently the investigators
have 31 days to investigate and build sufficient evidence to act on
suspicious transactions
Law enforcement agencies are under resourced.
The current legal framework for asset recovery is reliant on a
conviction in the origin country’
In order to remedy the aforementioned gaps in the legislation
the UK Government has relatively recently introduced Unexplained
Wealth Orders (UWO).
So what is a UWO?
It is a measure inserted into the Proceeds of Crime Act 2002
(hereinafter “POCA”) by Part 1 of the Criminal Finances Act 2017.
The new section 362A POCA now gives any law enforcement agency the
power to make an application to a High Court judge for a UWO and
such an application may be made Ex-parte, i.e. without notice. Any
application made under this provision must contain various details
including naming the relevant property and who is said to own
it.
Before a High Court judge makes a UWO he must be satisfied that
there is reasonable cause to believe that the respondent in the
said case holds the property, and that the value of the property is
greater than £50,000.
In addition, a High Court judge must be satisfied that there are
reasonable grounds for suspecting that the known sources of the
respondent’s lawfully obtained income would have been insufficient
for the purposes of enabling him to obtain the property with is the
subject of the UWO.
The Act sets out what criteria can constitute “reasonable
grounds” for the High Court and this includes “known sources of the
respondent’s income are the sources of income that are reasonably
ascertainable from information at the time of the making of the
application for the order”. Income is lawfully obtained if it is
obtained lawfully under the laws of the country from where the
income arises”.
The specified person (hereinafter “the respondent”) must be a
politically exposed person, or there are reasonable grounds for
suspecting that the respondent is, or has been, involved in serious
crime (whether in the UK or elsewhere) or a person connected with
the respondent is, or has been so involved. The Act defines a
politically exposed person. What is this definition?
What is the Practical effect of a UWO?
The practical effect of a UWO is that, once the order is made
the respondent is required to provide to the court an explanation
of how he/she obtained the property which is the subject of the
UWO.
What is the Effect of non-compliance with
UWO
If the respondent fails to comply with the requirements of the
UWO without reasonable excuse before the end of the response period
set by the court, the presumption is that the property is
recoverable (forfeited) for the purposes of any proceedings taken
in respect of the property unless the contrary is shown – the
presumption only applies in relation to the property:
Relating to the respondent’s interest in the property, and Only
if the value of that interest is greater than £50,000
Does the UWO carry criminal liability?
The Unexplained Wealth Order has no criminal liability attached
to it, save where there are false or misleading statements made in
the purported compliance with a requirement imposed by the UWO.
It is an entirely civil measure which allows the law enforcement
agencies to recover and/or restrain (forfeit) the property without
resorting to criminal procedures and/or sanctions. Its use is
limited to perceived illicit assets owned by government officials
(including family members or close associates) or those with links
to serious crime –serious crime includes money laundering, bribery
and corruption, fraudulent evasion of income tax. Another important
feature is that it shifts the burden of proof onto the respondent
to demonstrate the legitimacy of the funds used to acquire the
property, the subject matter of the UWO.
It is clear that we have entered a new dawn in Nigeria – the
Federal Ministry of Finance is gathering information on individuals
(and companies) through international asset tracing professionals
and where there is evidence of politically exposed persons or a
Nigerian is involved in serious crime e.g. tax evasion, money
laundering who have acquired property in the UK then a complaint
can be made to a law enforcement agency in the UK who will proceed
to apply for a UWO from the High Court. The days of being able to
hide assets in the UK appear to be over!
Read more https://nairalaw.com/why-nigerian-property-owners-in-uk-are-at-risk/