Unexplained wealth orders: The UK’s newest weapon in the war against dirty money

 
Louis Ashworth
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Zamira Hajiyeva was the subject of the NCa’s first unexplained wealth order

It’s not easy to spend £1.6m a year in Harrods. Head to the website of the iconic department store – a shopping staple for London’s extremely well-to-do – filter the gift selection by the aspirational “Over £2,000” category, then sort them from highest to lowest price, and the most expensive thing you will find is an 18-carat white gold Cartier love bracelet, encrusted with 204 diamonds (“for that special someone”) – yours for a paltry £48,400.


To spend £1.6m in a year, you’d need to buy the equivalent of that bracelet once every 11 days. That might seem hard, but it’s exactly what Zamira Hajiyeva – the wife of an Azerbaijani banker who was thrown in jail for defrauding the state-owned bank he worked for – managed to blow at Harrods between 2006 and 2016, clocking up a £16.3m bill overall.

Hajiyeva, who is alleged to have also used money stolen by her husband to purchase two UK properties, together worth £22m, had her identity revealed by the Court of Appeal earlier this month – named as the subject of an unexplained wealth order (UWO), obtained by the National Crime Agency (NCA).

Turning the table

The UWO – a new tool in the NCA’s crime-fighting arsenal – reverses the burden of proof, forcing those suspected of gaining assets illegally to prove they were obtained within the confines of the law. Already used in Australia, they came into effect in the UK in January. The NCA’s case against Hajiyeva (known as “Mrs A” until her identity was revealed) marked the UWO’s first outing in the UK.

If the subject of a UWO fails to respond, the property under question may subsequently be presumed to be recoverable, meaning it was acquired unlawfully – allowing it to be seized as part of a subsequent civil action. To be a candidate for a UWO, the purchaser of the property in question must be a politically-exposed person (or PEP – in Hajiyeva’s case, her husband), meaning they are at a higher risk for potential corruption.


“UWOs haven’t, so far, been the game-changing enforcement tool they were touted as,” said Emma Allen, a senior associate at law firm Taylor Wessing. She said agencies may have been reluctant to seek the orders because they are seen as “susceptible to challenge” – a perception that the Hajiyeva case could have shattered.

Cracking down

With the UWO over its first big legal hurdle, the NCA is preparing to roll it out more widely, as it tries to staunch the flow of dirty money through London. The agency, tasked with battling serious and organised crime, has looked at 140 cases where it could use a UWO, and expects to make applications for small number – fewer than 10 – in the coming months.

“Where we cannot determine a legitimate source for the funds used to purchase assets and prime property it is absolutely right that we ask probing questions to uncover their origin,” said Donald Toon, the NCA’s director for economic crime. “Unexplained wealth orders have the potential to significantly reduce the appeal of the UK as a destination for illicit income. They enable the UK to more effectively target the problem of money laundering through prime real estate in London and across the UK, and we will now seek to move further cases to the High Court.”

Transparency International, an anti-corruption NGO, said it has identified £4.4bn worth of property across the UK that it believes has been bought with suspicious wealth, all of which could be made a target for future UWOs. But for some critics, the problem isn't scale – it’s the UWO itself.

“While there is clearly political support for the NCA’s use of these powers, there are some troubling aspects to them which should concern us all – even those of us who don't spend £16m at Harrods,” said Ben Rose, a partner at corporate crime law firm Hickman & Rose. “The key problem is that these orders invert the burden of proof. English law has, for centuries, relied on the principle that an accuser has to prove guilt. UWOs mean the accused now has to prove their innocence.”

“At the moment the public seems to accept this radical change,” Rose added. “Perhaps it is because of who is being accused in this case and others like it. But if this principle were to be applied to ordinary people, in other areas of law, there would be outcry.”

Despite the criticisms, it’s unlikely that the NCA will be knocking on your door and demanding to know how you bought your TV anytime soon. UWOs still have to be granted to enforcement agencies, and can only be brought against PEPs with big assets and demonstrably-shady backgrounds.

The problem for prosecutors, however, is that these very limitations mean those people most likely to be the subject of an UWO are those most able to defend themselves against one. Extraordinarily-wealthy, internationally-mobile and often in possession of funds from countries with less-than-ideal standards of book-keeping, they have the legal resources to drag the NCA and other agencies into protracted fights over each and every UWO that is granted.

The next few months will prove a key test of the UWO, as the NCA attempts to recreate the success of its first run. The Hajiyeva case marks a breakthrough, but the NCA’s slow, selective approach may prove vital if it is to make a success of its newest weapon against corruption.

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