Money, money, money: It’s a rich man’s world!

In February 2018, the National Crime Agency (NCA) successfully obtained two Unexplained Wealth Orders (UWO) on properties in the UK – one in the exclusive Knightsbridge area of London and the second, a golf course in Berkshire, collectively worth £22 million.

The first target of the UWOs challenged the UWOs on a variety of grounds but lost on every point.

What are UWOs?

UWOs were introduced under the Criminal Finances Act 2017 which came into force on 31 January 2018. UWOs are an investigative tool granted by the Court pursuant to s.362A(1) of the Proceeds of Crime Act 2002 (POCA) requiring a person to explain the origin of property that appears to be disproportionate to their known income.

In particular, the recipient will need to explain:

• the nature and extent of their interest in the property; and
• how they obtained the property. A UWO may also require the production of documents.

Failure to comply with the UWO ‘without reasonable excuse’, means the property (or the respondent’s interest in it) is presumed to be recoverable by enforcement authorities under POCA.

When can a UWO be issued?

Only specified law enforcement authorities can apply to the court to issue a UWO, and they must satisfy the court of three conditions:

• that the respondent holds the property, or properties, in question and its collective value is greater than £50,000;
• that there are reasonable grounds to suspect that the known sources of the respondent’s lawfully obtained income would have been insufficient for the purposes obtaining the property; and
• that either:
  • the respondent is a Politically Exposed Person (PEP); or
  • there are reasonable grounds to suspect that the respondent, or a person connected with them, is or has been involved in serious crime (in the UK or elsewhere).

Who is Zamira Hajiyeva and why was she targeted?

Zamira Hajiyeva is the wife of Jahangir Hajiyeva, a former chairman of the state-owned International Bank of Azerbaijan. Mr Hajiyeva is currently serving a 15-year sentence in Baku after being convicted of a number of offences, including embezzlement, abuse of office, and fraud during his time at the Bank of Azerbaijan. In addition to his imprisonment, Mr Hajiyeva has had to pay penalties totalling approximately £30 million.

The NCA alleges that Mr Hajiyev is a PEP, who obtained his wealth from the embezzlement of public funds. Mrs Hajiyeva insisted that her husband is not a PEP but gained his wealth legitimately through a sequence of ventures before taking up a role with the Bank of Azerbaijan.

However the NCA, had pointed out that Mr Hajiyev had been a state employee from 1993-2015, and would not have been able to legitimately amass the wealth traced to the couple. The NCA also presented Mrs Hajiyeva’s lavish spending habits to the court as evidence, including:

• Spending £16 million at Harrods over a period of 10 years
• The couple having two bays within the private Harrods car park
• Mrs Hajiyeva purchasing a $42 million Gulfstream jet

What next?

Having lost her challenges against UWOs, there is now a presumption, unless successfully rebutted by Mrs Hajiyeva, that the properties were bought with illegitimate funds.  Therefore Mrs Hajiyeva will now have to explain how she was able to afford the two UK properties, despite arguing that only her husband can answer such questions.  It has been reported that Mrs Hajiyeva is appealing this judgment.

On Friday 2 November 2018 it was reported that jewellery worth £400,000 linked to Mrs Hajiyeva was seized from Christie’s auction house where it was being valued ahead of a sale.  Clearly, the NCA are not finished with her yet…