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UWOs really do hit home: first UWO upheld as ‘Mrs A’ is named

  • United Kingdom
  • Fraud and financial crime

11-10-2018

In National Crime Agency v A [2018] EHWC 2543 (Admin), the National Crime Agency (“NCA”) has successfully resisted a challenge to the first unexplained wealth order (“UWO”) made pursuant to the powers introduced by the Criminal Finances Act 2017.

UWOs, a new investigative power, allow UK enforcement agencies to challenge the owners of assets when the conditions below are met and where the assets are worth more than GBP 50,000. The applicant for a UWO must apply to the court, requiring the respondent to explain how they came to obtain such assets. In granting a UWO, the court has to be satisfied that:

(i)            there are reasonable grounds for suspecting that the respondent’s known sources of lawfully obtained income would be insufficient to enable them to own such assets (the “income requirement”); and

(ii)           that the respondent is a politically exposed person (“PEP”), or that there are grounds for suspecting that the respondent is involved in serious crime.

Under the UWO regime, the burden of proof is reversed; instead of enforcement agencies having to prove assets were obtained illegally, the owner has to show that any assets were obtained by legitimate methods. UWOs were introduced to assist in the fight against money laundering, forcing individuals suspected of involvement in corruption to account for their wealth.

On 28 February 2018, the NCA obtained a UWO against the assets of Mrs A, who has now been named as Zamira Hajiyeva. The UWO was obtained against a property, allegedly acquired illegally, in London. The property was purchased by Vicksburg Global Inc, a company incorporated in the British Virgin Islands (“BVI”). On 3 June 2015, Mrs Hajiyeva informed the Home Office in her application for indefinite leave to remain that she was the beneficial owner of the BVI company.

Mrs Hajiyeva’s husband, Jahangir Hajiyev, was the Chairman of a partially state-owned bank in a non-EEA country; now named as the International Bank of Azerbaijan. The bank was the largest bank in the country. Mr Hajiyev has been imprisoned after convictions for misappropriation, abuse of office, large scale fraud and embezzlement. The NCA allege that the money used to purchase the UWO properties was cash embezzled through Mrs Hajiyeva’s husband’s role at the bank. Details of Mrs Hajiyeva’s lavish spending were also aired in court including millions of pounds spent on jewellery from Harrods, private jets and luxury homes.

The UWO was granted on a without notice application, and Mrs Hajiyeva applied to have it discharged. Mrs Hajiyeva’s lawyers argued that the UWO ought to be discharged as, amongst other grounds:

-       Mr Hajiyev was not a PEP;

-       That the NCA, in their ex-parte assertion that that there were reasonable grounds to suspect any monies of Mrs Hajiyeva, originating from Mr Hajiyev, were not lawfully obtained, had not established the “income requirement” to the relevant standard, as Mrs Hajiyeva could have had independent capital or income;

-       The UWO offended Mrs Hajiyeva’s Article 1, Protocol 1 ECHR rights to the peaceful enjoyment of her property; and

-       The UWO offended the privilege against self-incrimination and spousal privilege.

In a High Court judgment handed down on 3 October 2018, Mr Justice Supperstone dismissed Mrs Hajiyeva’s challenge to the UWO on all eight grounds. Mrs Hajiyeva was also refused permission to appeal.

Mrs Hajiyeva’s failure to discharge the UWO means that she will have to account for how she came to afford this property, or face having them seized.

This success for the NCA seems likely to mean that we will see more UWOs over the coming months and years; particularly as the extent of money laundering in the UK property sector continues to be uncovered, publicised and momentum gathered to combat it.

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