It is estimated that around £100 billion a year is being laundered through Britain’s financial and professional services.
An investigative tool called the Unexplained Wealth Order (“UWO”) was introduced under the Criminal Finances Act 2017. This allows law enforcement agencies to require individuals to explain how they were able to buy assets of a value greater than £50,000, in the circumstances that their lawfully obtained income would be insufficient to enable them to obtain the property. It can also be used if the respondent is a Politically Exposed Person or there are reasonable grounds for suspecting that they are, or have been, involved in serious crime.
On 19 February 2018, the National Crime Agency filed a without notice application for a UWO, together with an application for an interim freezing order, against Zamira Hajiyeva in relation to a property purchased for £11.5 million in 2009.
She is married to Jahangir Hajiyeva, the former chairman of the International Bank of Azerbaijan, who was convicted of fraud and embezzlement and sentenced to 15 years in prison.
Interestingly, court documents revealed that Mrs Hajiyeva spent over 16 million pounds in Harrods between 29 September 2006 and 14 June 2016, with many of these transactions being linked to her husband’s bank account.
The purchases include:
• Boucheron Jewerelly: £3.5 million.
• Cartier Jewellery: £1.4 million.
• Dennis Basso, US fashion designer: £402,000.
• Sandwich by Tom: £332,000.
• Perfume Counters: £160,000.
She was granted permission to appeal on the basis that the appeal raised issues in relation to what was the first UWO case to come before the courts, and that it would be beneficial to have guidance from the Court of Appeal on the scope of statutory powers underlying UWOs.
However, in the Hajiyeva v National Crime Agency  EWCA Civ 108, the court dismissed the appeal on all five grounds and said that Mrs Hajiyeva would also have to pay all the National Crime Agency’s costs.
The court ruled that as there was evidence that the Azerbaijan state had more than a 50% shareholding in the bank, Mr Hajiyeva fell within the definition of a Politically Exposed Person because he was the chairman. The court concluded that as she was a family member of Mr Hajiyeva, she was also a Politically Exposed Person. Mrs Hajiyeva must now explain where the money to buy her house is South West London came from. Failure to do so may result in the property being seized.
The Court of Appeal said you cannot rely on a foreign conviction in support of an application for an Unexplained Wealth Order if the conviction was obtained in a manner that would have infringed on the defendant’s right to a fair trial. (In this case, the wife appealed against her UWO on the basis that she said her husband did not receive a fair trial in Azerbaijan when he was convicted of fraud and embezzlement).
An Unexplained Wealth Order could result in evidence that may lead to a prosecution being sought by another country (where they then try to discover how the money was obtained to buy the assets). This may place a burden on the National Crime Agency and result in them having to supply information. It is important to weigh up the pros and cons of a UWO being granted.
As a result of the case being found in favour of the National Crime Agency, it will likely see UWOs used as a tool to recover assets in future cases.
Sarah Pritchard, director of the National Crime Agency’s National Economic Crime Centre, said: “This is a significant result which is important in establishing unexplained wealth orders as a powerful tool helping us to investigate illicit finance generated in, or flowing through, the UK”.
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