A week ago, the Zambia Law Development Commission held a legal seminar to discuss the effectiveness and enforcement of unexplained wealth orders (UWOs) in Zambia. Speaking truthfully, most of us in the team did not fully understand what UWOs were or how they are applied when we embarked on preparing for this seminar. We can proudly say we have learnt new things and we are happy to share our newly acquired knowledge with you.
What are Unexplained Wealth Orders (UWOs)? Unexplained Wealth Orders (UWOs) are a type of court order issued to compel the target to reveal the sources of their unexplained wealth. The order empowers the State to confiscate assets, where the accused has offered no reasonable explanation relating to the sources of the assets, without ever having to prove that the property was obtained from criminal activities. Although there are variations of UWOs, most of them are based on the same concept authorities do not have to prove that assets are derived from a crime; confiscation of assets is based on the discrepancy between a person’s legitimate income or wealth and the observed wealth of the person.
UWOs require the respondent to explain how an asset was acquired. Where a respondent does not provide an adequate explanation or satisfactory evidence, the asset will be considered “recoverable property” for a civil recovery order.
Does Zambia’s legislation provide for UWOs? Yes, it does. They are referred to as non-conviction-based forfeiture orders and are issued pursuant to the 2010 Forfeiture of Proceeds of Crime Act (FPC Act). This Act further provides for the confiscation of the proceeds of crime, the deprivation of any proceeding, benefit or property derived from the commission of serious offences and facilitates the tracing of any proceeding, benefit and property derived from the commission of any serious offence. The Act defines serious offence as ‘an offence for which the maximum penalty prescribed by law is death or imprisonment for not less than 12 months’. The Act also defines tainted property to mean, any property used or intended to be used in, or in connection with, the commission of an offence or proceeds of an offence.
Non-conviction-based forfeiture orders can be enforced against unexplained property i.e. property in respect of which the value is disproportionate to a person’s known sources of income at or around the time of the commission of the offence and for which there is no satisfactory explanation.
Why are UWOs being utilised? Corruption, money laundering and illicit financial flows have become a global threat to economic development and internal security worldwide and Zambia has not been spared. Indeed, efforts to fight corruption have been heightened and Government has indicated the need to combat corruption through legal and institutional mechanisms as envisioned by the 8th National Development Plan and Vision 2030.
Corruption refers to the soliciting, accepting, obtaining, giving, promising or offering of a gratification by way of a bribe or other personal temptations or inducement, or the misuse or abuse of a public office for advantage or benefit for oneself or another person.
Money Laundering means engaging, directly or indirectly, in a business transaction that involves property acquired with proceeds of crime; receiving, possessing, concealing, disguising, disposing of, or bringing into Zambia, any property derived or realised directly or indirectly from illegal activity; or the retention or acquisition of property knowing that the property is, derived or realised, directly or indirectly, from illegal activity.
Illicit financial flows refer to the movement of money across borders that is illegal in its source such as corruption, smuggling, transfers (e.g., tax evasion) or its use (e.g., terrorist financing).
Globally UWOs have become a powerful tool that forms part of the investigative and asset recovery mechanisms for unexplained wealth or tainted property as it is known in the Zambian context. The rationale for enforcing UWO is to prevent persons from reaping the rewards of their illicit endeavours of corruption, money laundering and other illicit financial flows.
Zambia has faced increasing concern over the issue of corruption and money laundering activities. These illicit practices pose a major challenge to enforcement agencies as it becomes more difficult to seize corrupt property without a criminal conviction and as criminal activities become more complex and intertwined. In most cases, there is insufficient or lacking evidence to secure a conviction. This is where the UWO becomes helpful in that a criminal trial does not have to be conducted but rather a civil procedure where a prosecutor from an enforcement agency may apply to the court for such an order in respect unexplained property and the balance of proof is lowered. In some countries such as the UK, the UWO has been a preferred investigative tool because it is regarded as a quicker process to recover assets suspected of being proceeds of crime. Other serious crimes that may lead to a UWO include drug trafficking and tax evasion.
While UWOs are a unique court order and still a relatively new concept, they are proving to be a useful tool in the fight against corruption, illicit financial flows, and money laundering and more so in the recovery of public funds and in ensuring that unexplained wealth finds no refuge in the hands of wrongdoers and hopefully satisfies the public’s desire to see justice done.
Our article next week will look at the human rights concerns of the use of UWOs; we will also share the key recommendations that emanated from our legal seminar.
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