The National Crime Agency announced last week that it has secured three Unexplained Wealth Orders as part of its investigation into London property linked to “a politically exposed person believed to be involved in serious crime.” We are told that the UWOs are for three residential properties in prime locations – originally bought for more than £80m and held by offshore companies.
Interim Freezing Orders have also been granted which means that the properties cannot be sold, transferred or dissipated while the investigation continues.
Tackling illicit finance
Unexplained Wealth Orders (UWO), introduced under the Criminal Finances Act 2017, have been available to law enforcement since February 2018. They are a key part of the Government’s campaign to challenge illicit finance and give law enforcement to the tools it needs to tackle high value money laundering.
UWOs are intended to bolster the Proceeds of Crime regime, by making it easier for law enforcement agencies to seize assets suspected of representing criminal property. Dubbed, the McMafia law, the first UWO, relating to a “Mrs A”, was issued in February 2018. She was later revealed to be Zamira Hajiyeva, the wife of the former chairman of a state-owned bank in Azerbaijan who was imprisoned on fraud charges.
Read more on this case: Unexplained Wealth Orders: What we know one year on. Mrs A was back in the news last week as the media carefully scrutinised her spending habits and “£16m bill at Harrods”.
In its announcement the NCA stated that: “”the individuals behind these offshore companies now have to explain how the three properties were obtained”, underlining that it “will not shy away from complex and detailed investigations against high profile individuals and professional enablers.”
Indeed, there is an increased focus on professionals – including lawyers, accountants, and tax advisors – and the role they can play in setting up vehicles through which funds can be illegally processed (see our related blog: AML: targeting the professional enablers – action not just talk)
The 2017 National Risk Assessment of Money Laundering (NRA) identified “a particularly high risk” in super-prime property in London, confirming that property continues to be an attractive vehicle for criminal investment, in particular for high-end money laundering. Indeed, as set out in the NRA, a significant amount of intelligence about possible proceeds of corruption in London is generated by transactions relating to the acquisition or sale of such super-prime property.
The potentially dire consequences for those respondents targeted by a UWO means that this remains a key area for development over the coming months and years. Last April the NCA referred to “100s of cases” that were being considered for an UWO.
HNWIs, PEPs and their advisors should keep a close watching brief and seek specialist legal advice if they have any concerns that they might be of interest to the NCA, SFO or other agencies with the power to obtain a UWO.