Zamira Hajiyeva made headlines in May 2019 after it was revealed she spent £16 million in Harrods over ten years. Mrs Hajiyeva’s spending at the luxury store prompted the National Crime Agency (NCA) to investigate and take action against her and, as a result, she is currently fighting the UK’s first unexplained wealth order (UWO).
In this post, we take a look at the use of UWOs and the concerns this raises for high-net-worth individuals. If you require further information about UWOs or any other financial crime matter, please get in touch.
What are unexplained wealth orders (UWOs)?
UWOs were introduced by the Criminal Finances Act 2017. They are issued by the High Court and require a person to explain how they obtained certain property or assets where it appears the property is disproportionate to their income.
UWOs specifically target individuals who are suspected of being involved in, or connected to someone involved in, serious crime.
This civil investigatory tool is designed to help enforcement agencies uncover money laundering and other forms of serious criminality.
Why is Zamira Hajiyeva subject to a UWO?
It was Hajiyeva’s spending activity at Harrods that prompted the interest of the NCA, however there were other factors at play. Mrs Hajiyeva is married to Jahangir Hajiyev, the former chairman of the International Bank of Azerbaijan, who is serving a 15-year custodial sentence for serious fraud. In addition to the £16 million spent at Harrods, Mrs Hajiyeva also purchased an £11.5 million house in Knightsbridge using an offshore company.
Mrs Hajiyeva’s lawyers have stated that “spending money, however exorbitant, is not a criminal offence”. However, it is where this money comes from that is of concern, and a UWO is a means to determine if the source of the funds is lawful.
In what circumstances can a UWO be granted?
When convincing the High Court that making a UWO is justified, the body applying for the order must establish certain requirements:
- There must be reasonable grounds to suspect that the respondent’s lawfully obtained income would not have been adequate to obtain the property.
- The respondent must be either a politically exposed person PEP, involved, or previously involved, in serious crime in the UK or abroad, or connected to a person who has been involved in serious crime in the UK or abroad.
If the Court determines that a UWO is justified, the respondent must explain their interest in the property and how they obtained it. If the respondent does not comply with the order, the property set out in the UWO may be seized or frozen.
What concerns are there regarding the use of UWOs?
UWOs are designed to support the courts and enforcement agencies in tackling corruption and financial crime, however the impact for those targeted can be significant. Hajiyeva’s case shows how effective UWOs are in requiring high-net-worth individuals to disclose extensive details about their income. Further, there is concern over their potential to breach privacy rights. Mrs Hajiyeva was initially protected by an anonymity order; however, this was later discharged and her name and details of her spending became public, drawing much attention from the media.
The process in which the Court grants a UWO is, to an extent, subjective. “Reasonable grounds” to suspect that the respondent’s lawful income would be insufficient to acquire the property is not a test based on fact. This element of the test relies heavily on information about the respondent’s lawful income being readily available and the Act refers to sources of income that are “reasonably ascertainable from available information at the time of making the application or order”. In practice, this could mean that a lack of readily available information could be used as grounds for a UWO.
Further, the second part of the test means that the respondent need not have been involved in serious crime themselves but need only have “a connection” to a person involved in serious crime. This is a potentially far-reaching test, which could result in a weak connection being used as grounds for issuing a UWO.
Due to the concern that these measures have the potential to be abused by the authorities, if you become the subject of a UWO it is vital to seek specialist advice as quickly as possible from a legal team that fully understands the technicalities of this area of law.
Our solicitors will work hard to challenge the UWO – for example on the facts relied on by the enforcement agency to apply for the order or on the grounds that the order violates your privacy rights – and mitigate as far as possible the impact on your personal and professional life.
Contact Our Fraud and Financial Crime Defence Lawyers, London
Lewis Nedas is a highly regarded City law firm, ranked in Chambers and Legal 500 for our fraud defence service. Our Financial Crime and Fraud Solicitors routinely handle investigations into clients' affairs by a range of regulatory agencies, including the FCA, the police and the NCA. We appreciate the strain that these investigations can put on individuals and businesses, and the significant reputational damage that can be done.
We believe in handling matters carefully to reduce the impact NCA's activities can have on our clients. While we will respect the NCA's mandate to guard against serious crime, we will not permit unnecessary intrusion into your affairs where there is no just cause. Our many years of experience have taught us that protecting your interests is a matter of priority. We will work with you throughout the investigation, advise you during any interviews and represent you in court proceedings should the situation warrant it.
To discuss your needs, please call us today on 020 7387 2032 or complete our online enquiry form.
