Unexplained wealth order

An unexplained wealth order (UWO) is a type of court order issued by a British court to compel the target to reveal the sources of their unexplained wealth.[1] UWOs were introduced by sections 1–2 of the Criminal Finances Act 2017 and are governed by sections 362A–362T of Part 8 of the Proceeds of Crime Act 2002. Persons who fail to account are liable to have assets seized after the National Crime Agency makes a successful appeal to the High Court.

The power of UWOs in fighting money laundering lies in their reverse onus principle. Consistently, information obtained in the context of an UWO cannot be used in a criminal proceeding.[2] The statutory and regulatory scheme for UWOs is set out in paragraphs 11–18 of Hajiyeva v National Crime Agency [2020] EWCA Civ 108 (05 February 2020).[3]

The two first Unexplained Wealth Orders were issued in 2018 to Zamira Hajiyeva, the wife of Jahangir Hajiyev, the former chairman of the International Bank of Azerbaijan.[4] In February 2020, Ms Hajiyeva lost her appeal against the NCA's bid to seize her London property. She was thus required to "provide the NCA with a full account of the sources of her wealth – including how she was able to buy her £15m home and the Mill Ride Golf Course in Berkshire".[5]

In May 2019, the NCA secured three further UWOs as part of an investigation into "London property linked to a politically exposed person believed to be involved in serious crime". The three properties, originally bought for more than £80m and held by offshore companies, were subsequently identified in an investigation by BBC News, Finance Uncovered and Transparency International into the ownership of London property by members of Kazakhstan's political elite.[6] Nurali Aliyev (Nursultan Nazarbayev's grandson) and his mother Dariga Nazarbayeva "have denied all wrongdoing – saying they can prove independent and legitimate wealth for their UK property investments".[7] On 8 April 2020, the High Court of Justice subsequently ruled that the case against the two be dismissed and that the properties be unfrozen "after they spoke more candidly about the sources and scope of their wealth".[8]

As of July 2020, the NCA is the only body to have secured UWOs. The Serious Fraud Office, HM Revenue & Customs, Financial Conduct Authority and Crown Prosecution Service have authority but have so far not used the legislation. At the same time it was reported that UWO investigations into “politically exposed persons” had proved much more difficult than the UK authorities had expected[9].

British media sometimes refer to UWOs as "McMafia laws" after the McMafia crime drama series on British television and Misha Glenny's original book McMafia: A Journey Through the Global Criminal Underworld on organised crime.[10]

See also

References
  1. "Circular 003/2018: unexplained wealth orders". GOV.UK. Retrieved 10 October 2018.
  2. "How The Unexplained Wealth Order Combats Money Laundering". forbes.com. Retrieved 31 October 2018.
  3. "Hajiyeva v National Crime Agency [2020] EWCA Civ 108 (05 February 2020)". British and Irish Legal Information Institute. Retrieved 11 March 2020.
  4. Casciani, Dominic (10 October 2018). "Woman who spent £16m in Harrods revealed". BBC News. Retrieved 10 October 2018.
  5. Casciani, Dominic (5 February 2020). "Woman in £16m Harrods spend loses wealth seizure challenge". BBC News. Retrieved 11 March 2020.
  6. Casciani, Dominic (10 March 2020). "Unexplained Wealth Order focuses on London mansion". BBC News. Retrieved 11 March 2020.
  7. "London Mansion Linked To Nazarbaev Family At Center Of British Court Battle". RFE/RL. 10 March 2020. Retrieved 11 March 2020.
  8. "Kazakhstan: Nazarbayev wealth ruling dismays transparency campaigners". Eurasianet. 9 April 2020. Retrieved 9 April 2020.
  9. Reporter, Sean O’Neill, Chief. "£1.5m legal bill forces rethink over McMafia wealth orders". ISSN 0140-0460. Retrieved 13 July 2020.
  10. https://www.cityam.com/woman-who-spent-16m-in-harrods-loses-appeal-against-first-mcmafia-wealth-order/


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