A London court has dismissed the first challenge to new “dirty money” powers that allow British authorities to force wealthy people to explain how they obtained their riches if the wealth is suspected to be the proceeds of crime, but lawyers are unsure how effective the new enforcement tool will be.
The High Court sided with the National Crime Agency this month and upheld the U.K.’s first ever unexplained wealth order, against the wife of an Azerbaijani banker imprisoned on fraud charges, in a decision that adds impetus to agency’s attempts to stem the hundreds of billions of pounds in dirty money it contends flows through the U.K.
David Corker, a partner at Corker Binning, commented:
“A UWO is intended to kick-start applications for civil recovery orders. After initial fanfare, applications to seize property by this means tailed off in recent years as the Assets Recovery Agency and then the NCA became bogged down in the pitfalls and delay of High Court litigation. The fruit was not as low hanging as initially thought. UWO’s are designed by the Home Office to galvanise the NCA. By nudging the burden proof several degrees further in terms of making it easier for the State to win its case. For a subject of an UWO, they are obliged to show that that their bling was not obtained as a result of criminal conduct somewhere in the world. The Home Office is hopeful that there is plenty of fruit in Knightsbridge and the Home Counties ready for plucking in that shady foreign owners of property there will if they cannot overturn it before it bites, opt not to satisfy a UWO by offering up a blameless CV of themselves for scrutiny by the NCA and the folks left behind back home. Their defiance should then pave the way to seizure by a civil recovery order.
“However there is a potential fly in the ointment. The courts may hold, no such trial having yet occurred where a UWO was deployed, that the NCA cannot win by only proving that the subject is shady and that they ignored their UWO. Judges may hold for example that the respondent’s defiance of their UWO is not nearly as probative of the NCA’s allegations as is hoped. That the State cannot rely predominantly on adverse inferences arising from failures to engage to justify an expropriation. Direct evidence of criminality and of the money trail is necessary also. If the courts take such a demanding approach then the UWO be destined for the retirement home.”
Read the full article in Law360 here.
Account freezing and forfeiture orders
March 4 2024
New Fraud Prevention Offense May Not Make Much Difference
February 21 2024
Maia Cohen-Lask quoted by CITY A.M. on the OFSI’s enforcement of sanctions in light of Russia’s invasion of Ukraine
January 18 2024