Overview

This bill amends the Criminal Finances Bill, primarily focusing on unexplained wealth orders, compensation for wrongly frozen assets, and information sharing regarding beneficial ownership. It clarifies the definition of "holding" property, introduces compensation mechanisms for those affected by interim freezing orders, and enhances cooperation between UK authorities and overseas territories on beneficial ownership information.

Description

The bill makes several key changes:

Unexplained Wealth Orders

The amendments lower the threshold for unexplained wealth orders from £100,000 to £50,000. They also broaden the scope of the orders to encompass situations where property is held through trusts or settlements, and clarifies the definition of "holding" property to include effective control, trusteeship, or beneficiary status. It expands the definition of "respondent's interest" to include assets connected to persons involved in serious crime or politically exposed persons.

Compensation for Interim Freezing Orders

New clauses introduce a compensation mechanism for individuals whose assets were subject to interim freezing orders that were later discharged or recalled due to serious errors by enforcement authorities (High Court in England & Wales, Court of Session in Scotland). The bill sets out a three-month timeframe for applications and conditions for compensation eligibility.

Beneficial Ownership Information

A new clause mandates a report by July 2019 on information sharing arrangements between the UK and other territories (Channel Islands, Isle of Man, British Overseas Territories) regarding beneficial ownership. The report must assess the effectiveness of these arrangements.

Other Amendments

Various other amendments clarify existing procedures, including extending certain timeframes, clarifying the scope of disclosure requirements, and streamlining the process for further information orders, and legal expense payments. The bill also extends the scope of recoverable property to include betting receipts.

Government Spending

The bill's financial impact is difficult to quantify precisely. It could lead to increased costs for compensation payments if successful claims are made under the new compensation mechanisms. There might also be costs associated with preparing and publishing the report on beneficial ownership information. Conversely, successful enforcement actions might lead to increased asset recovery generating revenue for the government. The net effect on government spending is uncertain.

Groups Affected

• Individuals subject to unexplained wealth orders: May face increased scrutiny and potential asset seizures.
• Individuals with assets frozen under interim orders: May be eligible for compensation if the orders are discharged or recalled due to serious errors.
• Law enforcement agencies: Will have altered powers and responsibilities related to unexplained wealth orders, information sharing, and the new compensation scheme.
• Trusts and settlement trustees: Will face increased reporting requirements.
• Politically exposed persons and their associates: May face more stringent scrutiny of their wealth.
• Businesses in the regulated sector: Will face increased demands for information sharing.
• Local authorities in Scotland: Will receive notice of applications for decree of removing and warrant for ejection.
• Tenants in Scotland: May face eviction as a result of asset recovery proceedings.

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