Further developments in the first (so-called) “McMafia” case (see my related blog Media focus on first 'McMafia law' challenge) were reported yesterday when the National Crime Agency (NCA) secured the seizure of a “high value Cartier diamond ring”.
The NCA reports that the ring, with a retail value in excess of £1.1m, has been seized by investigators as part of an ongoing Unexplained Wealth Order (UWO) case focussing on property purchased by Jahangir Hajiyev, an Azerbaijani banker jailed in his home country for fraud offences, and his wife Zamira Hajiyeva. The item was seized - from a jewellers where it had been taken for repair - under the ‘listed assets’ provisions introduced by the Criminal Finances Act 2017. The NCA believes the source of the funds used to purchase the jewellery requires “further investigation”. The NCA also refers to its seizure of a further 49 items of jewellery (with a combined value of more than £400,000) from an auction house in London where they were being valued for Mrs Hajiyeva’s daughter.
This seizure relates to the first UWO issued in February 2018 in respect of two properties with a combined value in excess of £22m. A third UWO was issued by the NCA last year (see Anti-Corruption Strategy 1 Year Update) and the NCA’s Economic Crime Director Donald Toon informed reporters back in April 2017 that he expected five more UWO to be issued in the coming months and that “there were about another 100 cases [his] officers were working on”. The publicity that this case has attracted is likely to stimulate the appetite of law enforcement agencies for more of these draconian measures.
What is a UWO?
Introduced under the Criminal Finances Act 2017, UWOs have been in force since February 2018. They are intended to bolster the Proceeds of Crime Act 2002 (POCA) regime, by making it easier for law enforcement agencies to seize assets suspected of representing criminal property. Several authorities are empowered to apply to the court for such orders, including HMRC, the National Crime Agency (NCA), the Serious Fraud Office (SFO) and the Financial Conduct Authority (FCA).
The NCA’s appetite to apply for UWOs, and the dire consequences for those respondents either unable to provide a satisfactory explanation, means that this is a key area for development over the coming months and years. HNWIs, PEPs and their advisors should keep a close watching brief.