Two lawyers have shared their concerns with this publication over the UK's wide-reaching Criminal Finances Act.

Lawyers have warned that the UK's Criminal Finances Act, described by one as a “highly intrusive power”, could see certain people unjustly caught in prosecutors' cross-hairs if investigations are not properly policed.

Last week, the Criminal Finances Act 2017 received Royal Assent and is therefore on course to take effect later this year. According to the UK government's website, this will give law enforcement agencies and partners further capabilities and powers to recover the proceeds of crime; tackle money laundering, tax evasion and corruption; and combat terrorism financing. 

Among the most notable provisions of the Act is the ability to create Unexplained Wealth Orders, which can require those suspected of crime or corruption to explain the sources of their wealth.

Although many may consider this a logical step as the UK looks to shake its reputation as a safe haven for dirty cash, one lawyer has warned that the wide-reaching legislation could target the wrong type of people.

“This is a highly intrusive power,” said Ross Dixon, a partner at law firm Hickman & Rose. “It can be applied against a vast range of targets, since politically exposed persons [PEPs] are no more than people with prominent positions in public life, catching a huge range  of politicians, civil servants and their families and friends.”

He continued: “A suspicion of crime, which in this context refers to the categories listed in the Serious Crime Act 2007, can mean no more than fraud, computer misuse or money laundering, however minor in scale.”

Dixon went on to explain that the Act gives the Secretary of State “almost unlimited power” to make regulations revoking, repealing or amending its provisions, and this will extend to the provision of guidance. 

“Such guidance, and any necessary revocations, should be directed at ensuring this legislation does not follow the path of many previous money laundering initiatives designed to catch the big fish, but more often used against minnows,” he said. 

The Act also creates new criminal offences for corporations that fail to prevent their staff from facilitating tax evasion. It also allows authorities to seize the proceeds of crime and terrorist money stored in bank accounts.

Jonathan Grimes, a criminal litigation partner at Kingsley Napley, echoed Dixon's concerns over the scope of the Act. 

He explained that the UK has ended up with lower threshold provisions than initially expected because the Bill was rushed through Parliament before it was dissolved before 8 June's general election.

“This strengthens the hand of law enforcement agencies and potentially gives greater scope to investigations,” Grimes said.

He continued: “From an individual defence perspective, it should be noted that a person could be convicted of a criminal offence now if they make false or misleading statements in response to an Unexplained Wealth Order. [They] are an important new measure for a government which has promised to crack down on dirty money and terrorist financing.

“Whether the authorities have the resources to police it properly is another matter.”