Wealth Unexplained: High Court uphold the historic first “Unexplained Wealth Order” as NCA indicate there are many more with some explaining to do
In a clear victory for the National Crime Agency (“NCA”), the High Court have upheld the first ever Unexplained Wealth Order (“UWO”). This is an important decision for the prosecuting authorities, who see the use of UWOs as a key weapon in their mission to disrupt organised crime. The judgment also provides those attempting to set-aside an UWO with greater insight into what grounds will, and more to the point, will not succeed.
National Crime Agency v Mrs Zamira Hajiyeva  EWHC 2534 (Admin)
On 3 October 2018 the High Court dismissed a challenge to the first UWO secured by the NCA. The UWO was made back in February 2018 against an individual previously known as “Mrs A”. The High Court’s judgment has now revealed her identity as Mrs Zamira Hajiyeva, the wife of Mr Jahangair Hajiyeva, a former banker convicted of large scale fraud and embezzlement in an non-EEA Country. The order requires her to explain how she came to acquire UK property worth £22m. The property was bought in 2009 for £11.5m via a company in the British Virgin Islands. The judgment sparked immediate press interest, particularly as it revealed Mrs Hajiyeva to have spent £16m at London store Harrods over the past decade.
In his judgment, Mr Justice Supperstone dismissed all of the grounds put forward for discharging the UWO. Specifically, in response to the submission that the NCA had not established the “income requirement” to the relevant standard, the Judge did not depart from his previous finding that “as a state-employee between 1993 and 2015”, it would be very unlikely that Mrs Hajiyeva’s husband would have “generated sufficient income to fund the acquisition of such a property”.
The NCA has responded positively to the High Court decision, stating that they were pleased to be able to continue with this investigation and that they would seek to quickly bring other cases to the High Court.
The full judgement can be accessed here >
What is an Unexplained Wealth Order?
Unexplained Wealth Orders (UWO) are investigative tools to help law enforcement act on corrupt assets. They were introduced to help tackle concerns that the UK had become a safe haven for harbouring corrupt individuals and their assets.
Prior to the Criminal Finances Act 2017, it was thought that little could be done to act on highly suspicious wealth unless there was a conviction in the country of origin. This was problematic where, for example, the origin country was in crisis or the government was corrupt. In such cases, investigations could be protracted or unlikely to produce satisfactory results.
How is a UWO obtained?
Certain enforcement authorities (National Crime Agency, Her Majesty’s Revenue and Customs, Financial Conduct Authority, Serious Fraud Office, and Crown Prosecution Service) are empowered to apply to the High Court for an UWO. The application is made where there is a suspicion that an individual has purchased an asset with money obtained through corrupt means in order to conceal the proceeds of crime. For example, suspicion may arise where a politician on an average salary from a country with a poor record of tackling corruption purchases a flat in London for a sum beyond their means.
Where such an application is made, the court must be satisfied that there are reasonable grounds to suspect that the subject of the proposed order is likely to be the owner of suspicious wealth beyond their means and all of the following conditions are met:
- There is reasonable cause to believe that the individual holds the asset(s) in question and the value of the asset(s) is greater than £50,000 (at the time of the order).
- The individual is either a Politically Exposed Person (PEP) or there are reasonable grounds to suspect that the individual is or has been involved in serious crime (as defined in Part 1 of the Serious Crime Act 2007).
- The individual’s known income is insufficient to obtain the asset(s).
The Future for UWOs
It has been reported that the NCA has recorded 140 cases where the use of an UWO would be regarded as appropriate. Whilst NCA officials had previously forecast relatively slow growth in the use of UWOs, it may be that the robust approach shown by the High Court now sees investigations of a similar nature expedited.
We will be following up on this article with a more detailed analysis of the High Court judgment in due course.
- Money Laundering
- Bribery & Corruption
- Asset Forfeiture & Proceeds of Crime
- Corporate Crime Advisory