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Anti-Money Laundering

A (potential) new tool to fight the growth of illicit wealth

Unexplained wealth orders could help stop the flow of illegal money. A recommendation from the Cullen report backs this up

Two business people look at a tablet in an officeUnexplained wealth orders would require individuals spending or transferring inexplicably large sums to identify the source of their money (Getty Images/Morsa Images)

One of the more novel details in the Cullen Commission report had to do with the very last of the commissioner’s 101 recommendations, which calls for a new provincial regime allowing “unexplained wealth orders” (UWO).

“Unexplained wealth orders are a promising tool used in some jurisdictions to address the accumulation of illicit wealth by those engaged in profit-oriented criminal activity,” the report notes, adding that another benefit is that they can discourage foreign corrupt officials and others involved in criminal activity from moving their illicit wealth to British Columbia.

The idea is that, when an individual is suspected to be spending or transferring inexplicably large sums, investigators can apply for a court order requiring the person to show the source of their money. In some cases, UWOs pave the way for court-ordered forfeitures. Since the war in Ukraine began, some countries have used UWOs to go after expat Russian oligarchs. The U.K. was an early adopter, bringing in enabling legislation to allow courts to issue UWOs against individuals with large assets who were suspected of obtaining them without an obvious source of income.

The law’s very first target was Zamira Hajiyeva, the wife of a jailed Azerbaijani banker. In 2020, she lost a Supreme Court appeal seeking to overturn the UWO.

Jeffrey Simser, a former Ontario government lawyer specializing in anti-money laundering, says UWOs potentially accelerate investigations and provide another tool in jurisdictions without robust beneficial ownership rules. “Cullen said criminals are very sophisticated,” he points out. “They know what jurisdictions are uncomfortable to operate in [and] they’ll go to wherever the lower regulatory bar is.”

But some legal experts have raised issues about UWOs. In a brief submitted to the commission, former Supreme Court of Canada justice Thomas Cromwell pointed out that there’s no constitutional reason that would prevent the B.C. government from amending its civil forfeiture legislation to include UWOs. But, he cautioned, if authorities sought courts to issue UWOs to initiate forfeiture proceedings against property that might be used in the future to commit a crime, such moves would exceed the province’s jurisdiction.

“Provisions modelled on the U.K. UWO scheme would not constitute unjustified infringements of any right guaranteed by the Charter,” Cromwell concluded. “However, the use of these powers would give rise to a number of Charter issues, which would, in some respects, limit their usefulness.”


Get insights on the Cullen report, and the potential impact of its recommendations. Plus, hear from anti-corruption expert José Hernandez about what CPAs can do to fight corruption and money laundering.