Three Unexplained Wealth Orders (UWOs) have been secured as part of a National Crime Agency (NCA) investigation into London property linked to a politically exposed individual believed to be involved in serious crime. The UWOs, which were obtained at the High Court last week, are for three residential properties in prime locations originally bought for more than £80 million and held by offshore companies.
Investigators are currently looking into the funds used to purchase the properties. Interim Freezing Orders have also been granted which means that the properties cannot be sold, transferred or dissipated while the investigation continues.
Andy Lewis, head of asset denial at the NCA, said: “This is the second time the NCA has successfully secured UWOs since the new legislation was enacted. They’re a powerful tool in being able to investigate illicit finance flowing into the UK and discourage it from happening in the first place. The individuals behind these offshore companies now have to explain how the three properties were obtained. The NCA will not shy away from complex and detailed investigations against high-profile individuals and professional enablers.”
Graeme Biggar, director general of the National Economic Crime Centre (NECC), added: “The purchase of prime property in London is a tactic used to launder money and we will use all the powers available to us to target those who try to do this. A priority for the NECC is to ensure that we explore every opportunity to deny assets linked to illicit finance. Our aim is to prevent misuse of the UK’s financial structures which undermines the integrity of the UK’s economy and institutions.”
As part of a separate case in February last year, the NCA obtained UWOs against two London properties believed to belong to jailed Azerbaijani banker Jahangir Hajiyev and his wife Zamira Hajiyeva.
Fight against money laundering
Responding to the NCA’s news, Chris Laws (head of product and strategy at Dun & Bradstreet) observed: “The NCA’s investigation into potential corruption in the London housing market is another example of the continuing fight against money laundering. There was a 20% increase in money laundering last year compared to 2017. Financial crime is often hard to identify, making prosecution challenging. While this is a focus for Government, the responsibility to stamp out illicit or nefarious activities shouldn’t just sit squarely with regulators.”
On that note, Laws continued: “Businesses have a role to play to ensure they have robust compliance processes in place to identify whether suppliers, customers or other agents they work with are involved in corruption, money laundering or bribery. Advanced Know-Your-Customer and Know-Your-Vendor solutions use Artificial Intelligence (AI) to map business relationships and untangle a large volume of data to develop an accurate view of compliance activities. Investment in AI can also reduce the amount of time spent on manual processes, therefore allowing compliance experts to devote their attention to investigating any suspicious activity and mitigating risk.”
Opening of the floodgates?
Aziz Rahman of business crime solicitors Rahman Ravelli commented: “It’s coming up to a year since the NCA’s director of economic and cyber crime Donald Toon said his team was examining between 120 and 140 individuals to see if they could be suitable for UWOs. Since that comment there has been the high-profile 2018 case of UWOs against two London properties believed to be owned by Jahangir Hajiyev, the jailed former chairman of the International Bank of Azerbaijan, and his wife Zamira Hajiyeva whose lavish spending in Harrods has been the subject of national media headlines. Now we have this latest case.”
Rahman continued: “It will be interesting to see whether this latest UWO case represents an opening of the floodgates for the NCA as the Agency works its way through its list of up to 140 potential targets. On the other hand, if this case is followed by another equally long wait until the next one, the effectiveness of UWOs could well be called into question. After all, with only two cases since UWOs were introduced in January last year, they’ve hardly proven to be a game-changer in targeting the proceeds of crime – at least, so far.”
Rahman added: “It’s interesting to note that the Serious Fraud Office, Her Majesty’s Revenue and Customs and the Crown Prosecution Service are yet to use UWOs, even though they have this tool at their disposal. It’s also worth considering that, while these latest UWOs have been secured by the NCA, this is really only the start of the process. The person being targeted by them will now begin the process of challenging them. While UWOs are a new tactic, the seizing of the assets that they target relies on civil recovery proceedings and they are nothing new. For the target of these UWOs, the real battle begins now. Civil recovery is the battleground where the success or failure of these UWOs will ultimately be determined.”