Can you imagine having to “explain your wealth” to a police officer, knowing that if they are not satisfied with your answer, they can seize your home in the name of the law?
This is now legal under certain circumstances. And from my perspective, this is just the beginning – as time wears on, and authoritarianism continues its march to power, you will see the state seizing more and more private property.
The recently passed Criminal Finances Bill allows courts to issue an “Unexplained Wealth Order”, or UWO. What this does is forces individuals or companies to prove how they afforded assets they own which are worth more than £50,000 – like property, or jewellery.
Neither the asset, nor the company or individual, needs to be in the UK. And if the company or individual on the receiving end of the UWO cannot satisfy the court in the time frame given, then law enforcement can seize the property.
The best part? You don’t even need to have committed a crime for your assets to be seized. This is from LexisNexis, the legal research provider (emphasis mine):
The wide definitions of relevant terms mean that the above criteria will permit enforcement authorities to apply for UWOs (and ultimately seek to apply powers of confiscation) against a respondent who may have only a very tenuous connection to a crime, or indeed where it is not established that a crime has been committed by anyone.
So what are the limits on the state’s new weapon? For the moment, the UWO is a bullet that can only be fired at certain targets: Politically Exposed Persons, those suspected of committing a serious crime, and anybody connected to either of those.
A Politically Exposed Person, or PEP, is essentially any foreign politician or official. And in this case, neither they, nor their close associates or family members need to be suspected of any crime whatsoever, to be issued a UWO – plenty of opportunities for diplomatic warfare.
And plenty of opportunities for war on private wealth generally. Given the scope of what could constitute a “serious crime”, the likelihood of being related to a suspect of isn’t all that rare. When taking action to protect your privacy and liberty (like using cryptocurrencies to be financially anonymous) is viewed as the habit of drug runners, money launderers or worse, it doesn’t take much to become a suspect of serious crime.
Policing for profit
“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.”
― Frédéric Bastiat
There potential for the UWO to be abused is huge. We have already witnessed the nightmare of asset forfeiture in the states, where police departments fund themselves by routinely shaking down citizens who can’t afford to fight the state in court. Police departments pay themselves huge salaries and buy increasingly militarised equipment with cash that was confiscated from civilians never convicted of any crime.
Of course, every step taken in advancing the power of the state is done in the name of the greater good. In this case, the reason private property rights must be trampled is to prevent foreign money laundering. Think drug cartels, corrupt politicians or maybe that guy that keeps flushing €500 notes down the toilet.
Transparency International, the non-governmental organisation which pushed hard for the Criminal Finances bill to be passed, paints a picture of Russian mobsters buying vast quantities of London property to launder their ill-gotten gains.
You are always guilty
From their perspective, individuals using anonymous companies (based in Panama or other jurisdictions which value privacy) to buy property in London is a problem that must be solved by the government, even if it means shifting the fundamental burden of proof from the accuser to the accused. Your accuser does not need to prove that you are guilty; you must instead prove that you are innocent. Can’t prove how you afforded that house? We don’t need to prove you bought it with dirty money, now hand it over.
This reasoning is incredibly dangerous. Should it bleed into other sectors of the law we will be in serious trouble. Accused of theft? The person accusing you doesn’t need to offer any evidence – instead you must prove you’re not a thief!
Keeping the state out of your life will become harder and harder in the future. Where do you think you’ll draw a line? Or are shackles on your liberty and privacy worth it, for Big Brother’s warm embrace? I’d love to hear your views: [email protected]
Until next time,
Boaz Shoshan
Capital & Conflict
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Category: Geopolitics