New British Columbia Law Will Target Source Of Luxury Wealth In Crackdown On Money Laundering

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British Columbia plans to introduce a new law that will allow authorities to seize luxury homes and cars if the owners cannot explain the source of the money to pay for them.

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New Prime Minister David Eby announced at the weekend that legislation will be introduced this spring to create unexplained wealth orders, which are earmarked for the proceeds of crime.

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Such measures have been in place in some jurisdictions, such as the UK, since 2017.

The unexplained wealth order is a tool recommended by the BC Cullen Commission on money laundering which delivered its findings this summer and a 2019 BC government-commissioned report on money laundering in real estate.

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James Cohen, executive director of Transparency International Canada, a global anti-corruption advocacy group, said the effectiveness of unexplained wealth orders will depend on how new legislation is crafted.

It would help to take privacy concerns and personal intrusion into account, target high-level crimes, and make them a civil measure rather than a criminal one, he said.

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“There is definitely guidance from the Cohen commission on how to move forward with this. So let’s see what the British Columbia government does,” said Cohen, whose organization has long been an advocate of unexplained wealth orders.

Rather than a presumption of innocence, under an unexplained estate order, the onus is placed on the alleged perpetrator to explain where the money came from to purchase their assets.

If the alleged perpetrator does not provide the information and does not rebut the presumption that the property was purchased with illicit funds, the property will be forfeited.

The Cullen Commission recommended that unexplained wealth orders will only be used in civil proceedings for the confiscation of assets. Information provided in response to an unexplained estate order cannot be used in criminal proceedings.

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The BC Civil Liberties Association (BCCLA), of which Eby was the director before going into politics, opposes inexplicable wealth orders.

The BCCLA said it is not in favor of taking a tough-on-crime approach to money laundering with the introduction of unexplained wealth warrants, the aggressive pursuit of civil forfeiture, increased surveillance and extensive information gathering and sharing. “These invasive measures undermine constitutional rights, have not been adequately tested, and would be costly to implement,” wrote BCCLA’s Stephen Chin and Jessica Magonet.

On Sunday, Eby said the introduction of unexplained wealth orders is aimed at removing the profit incentive for organized crime.

He acknowledged that the proposal is a departure from existing civil forfeiture rules in BC and Canada and said he had no doubt the new law would be challenged in court.

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But he said he doesn’t want British Columbia to be a place where organized crime is welcomed, money laundering is tolerated and people flaunt luxury items earned through the pittance of exploiting people on the streets. “We want to send a strong message,” Eby said.

Unexplained wealth orders have had limited success in the UK Several failed efforts to seize luxury London properties owned by residents of Central Asian countries formerly part of the Soviet Union.

An arrangement was reached in a case where a Leeds businessman, who had ties to a convicted murderer, agreed to turn over 45 properties and other assets totaling $15 million.

in a forum on unexplained wealth orders tuesday Hosted by the University of British Columbia’s Anti-Corruption Law Program, panelists also noted that the way in which unexplained wealth orders are constructed matters and that they cannot stand on their own in the fight against money laundering.

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“If you pass an (unexplained estate order law) and you don’t go to law enforcement, it will fail and it will fail spectacularly,” said Jeffrey Simser, one of the panelists and former legal director of the Ontario Ministry of the Prosecutor. General.

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