Unexplained Strategy: Putting Unexplained Wealth Orders to Work

The eye-catch­ing ele­ment of the British government’s response to eco­nom­ic crime has, dur­ing the course of 2018, been the much-antic­i­pat­ed debut of unex­plained wealth orders (UWOs). These were designed, in part, to tar­get the exten­sive wealth of cor­rupt and klep­to­crat­ic ‘polit­i­cal­ly exposed per­sons’ (PEPs) from non-European Economic Area coun­tries that has been stashed in real estate and oth­er valu­able assets in the UK. Anti-cor­rup­tion cam­paign­ers have high expec­ta­tions of the way in which these new pow­ers will be deployed – Transparency International UK claims to have iden­ti­fied £4.4 bil­lion-worth of UK prop­er­ties bought with sus­pi­cious wealth and has even offered a handy list of tar­gets for the police to consider.

The gov­ern­ment has done lit­tle to tem­per these expec­ta­tions. In ear­ly 2018, as UWO pow­ers went ‘live’ – and in the wake of the hit BBC TV series McMafia – Security and Economic Crime Minister Ben Wallace said ‘I have put pres­sure on the law enforce­ment agen­cies to use [UWOs] soon because too many gov­ern­ment mea­sures get passed but no one gets into the habit of using them’. Later in the year, fol­low­ing the suc­cess­ful defence of the first UWOs in the High Court in October, the National Crime Agency (NCA) com­mit­ted to ‘seek to quick­ly move oth­ers to the High Court’ adding that the agency is ‘deter­mined to use the pow­ers avail­able to … their fullest extent where we have con­cerns that we can­not deter­mine legit­i­mate sources of wealth’.

Yet is this (thus far not par­tic­u­lar­ly well demon­strat­ed) com­mit­ment to tar­get the tools – such as enablers and Scottish lim­it­ed lia­bil­i­ty part­ner­ships – and the pro­ceeds of cor­rupt and klep­to­crat­ic for­eign offi­cials, hid­den often in plain sight in the UK, what is real­ly required? Should valu­able and scarce resources and fund­ing be tied up in long, com­plex and expen­sive inves­ti­ga­tions where the chances of suc­cess and – most impor­tant­ly – impact on UK crim­i­nal­i­ty and the relat­ed harm inflict­ed on UK cit­i­zens, are so low? Would it not make more sense to com­mit these resources to tack­ling the pro­ceeds of the seri­ous and organ­ised crime that, we are told by the home sec­re­tary, rep­re­sent ‘the most dead­ly nation­al secu­ri­ty threat faced by the UK’?

At the launch of the UK government’s lat­est Serious and Organised Crime Strategy in November, the con­tra­dic­tion in the government’s pol­i­cy was laid bare. Hosted in a five-star hotel with the City of London as its back­drop, sup­port­ed by the ample ref­er­ences made by the min­is­ter to (again) the BBC series McMafia, the mes­sage seemed clear. The focus of gov­ern­ment efforts is to be on ‘high-end mon­ey laun­der­ers’, their assets, laun­dered through com­plex cor­po­rate struc­tures, and their facil­i­ta­tors (lawyers, accoun­tants, cor­po­rate ser­vice providers and estate agents).

Yet in response to a ques­tion from this author as to whom will hold the gov­ern­ment account­able for this effort, his response was, ‘my con­stituents’. A review of press report­ing and crime sta­tis­tics for the minister’s Wyre and Preston North con­stituen­cy in Lancashire sug­gests that the activ­i­ties of organ­ised crime groups – par­tic­u­lar­ly drugs traf­fick­ing – are almost cer­tain­ly a far more press­ing issue of con­cern for the minister’s con­stituents than high-end mon­ey laun­der­ing by ‘well-cut suits’ swan­ning around London.

Prioritising the deploy­ment of scarce resources and fund­ing against the unex­plained wealth of organ­ised crime groups not only makes polit­i­cal sense; it also makes strate­gic, tac­ti­cal and eco­nom­ic sense. Firstly, on top of address­ing the gen­uine con­cerns of vot­ers, who on the whole are not direct­ly affect­ed by oli­garchs and klep­to­crats, the threat posed and harm inflict­ed by organ­ised crime is real and – dis­taste­ful though it may be to admit – is in con­trast to the rel­a­tive­ly benign impact (from a harm per­spec­tive) of ques­tion­able wealth parked in London real estate or pass­ing through the tills at retail estab­lish­ments such as Harrods. Taking prop­er­ty and oth­er assets off organ­ised crime groups has a real impact. The house(s), car(s), holiday(s) and sta­tus bought with the pro­ceeds of crime mat­ter to the organ­ised crime group boss­es and to their wives (most often) and fam­i­lies that ben­e­fit too. Secondly, where­as tar­get­ing the cor­rupt gains of oli­garchs and pub­lic offi­cials will inevitably involve law-enforce­ment agen­cies in extend­ed and expen­sive legal bat­tles they can ill afford, mem­bers of organ­ised crime groups are far less like­ly to engage or be able to afford lengthy legal representation.

While it may be eye-catch­ing to tar­get a £20-mil­lion house in Mayfair, the impact on ‘the most dead­ly nation­al secu­ri­ty threat faced by the UK’ and the lives of MPs’ con­stituents would be far bet­ter-served – and more like­ly to achieve mean­ing­ful out­comes – if the UK focused our law enforce­ment atten­tion on the £250,000 house in Belfast, Manchester or Birmingham and empow­ered police forces out­side the M25 to use these new tools against tar­gets – used to liv­ing above the law – that are all-too well-known to them.

Should we turn a blind eye to those cor­rupt PEPs that take advan­tage of the finan­cial and invest­ment ser­vices that London has to offer to enjoy the stan­dards of liv­ing avail­able here? Absolutely not. But if we are seri­ous about tak­ing the fight to the crim­i­nals and remov­ing the pro­ceeds of the crime that allow them to live off oth­er people’s mis­for­tunes and hard-earned wages then the strat­e­gy pro­mot­ed by the gov­ern­ment should empow­er and sup­port police forces across the coun­try to do just that, in par­tic­u­lar by build­ing exper­tise in civ­il con­fis­ca­tion in wider UK polic­ing beyond the NCA where the focus is con­fined to the high-end, mul­ti-mil­lion tar­gets. This should be the year when, final­ly, new and exist­ing asset-freez­ing and con­fis­ca­tion pow­ers are used against the crim­i­nal­i­ty that threat­ens the lives of UK cit­i­zens every day in real life, not on TV.

Tom Keatinge is Director of RUSI’s Centre for Financial Crime and Security Studies.

BANNER IMAGE: The City of London as seen from the Thames. Courtesy of Kim Hansen/Wikimedia

The views expressed in this Commentary are the author’s, and do not nec­es­sar­i­ly rep­re­sent those of RUSI or any oth­er institution.

By Tom Keatinge

Unexplained Strategy: Putting Unexplained Wealth Orders to Work

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