Unexplained Wealth Orders The High Court recently upheld an Unexplained Wealth Order (UWO) against Zamira Hajiyeva, the wife of the former chairman of the state-owned International Bank of Azerbaijan. Mrs Hajiyeva allegedly spent £16m in Harrods over a ten year period and owned a house in Mayfair, a golf club in Ascot and a private jet. She now faces a criminal investigation and the loss of her property. The UWO against Ms Hajiyeva was the first to be issued but the National Crime Agency (NCA) is understood to be preparing a number of other applications. John Martyn, a senior associate in the Business Crime team at Howard Kennedy explains how a UWO is obtained and gives some advice on responding to a UWO. How is a UWO obtained? An enforcement authority (including the NCA, HMRC and SFO) can obtain a UWO against the holder of property (for convenience I will refer to the holder as the owner although the scope of 'holding' property is wider than simple ownership) if it satisfies the High Court that: • The property concerned is valued at £50,000 or more; • There are reasonable grounds for suspecting that the known sources of the owner's lawfully obtained income would be insufficient to enable them to obtain the property; and • The owner is either: o a "PEP" (politically exposed person, i.e. an individual who is, or has been, entrusted with prominent public functions by an international organisation or non-European Economic Area (EEA) state, or someone connected to such an individual); or
o There are reasonable grounds for suspecting that the owner is, or has been, involved in serious crime anywhere in the world (provided that it would amount to an offence in the UK) or a person connected with the owner is, or has been, so involved. A UWO can be granted in relation to property located outside the UK and against a person who is not resident in the UK. However, it is unlikely that a UK enforcement authority would apply for a UWO if there is no obvious British connection. The UWO requires the owner of the property to provide a statement: • Setting out the nature and extent of their interest in the property; • Explaining how the property was obtained (including, how any costs were met); • Supplying other information specified in the UWO;
• If the property is held by trustees of a settlement, any details of the settlement specified in the UWO. An interim freezing order will often be put in place at the same time as the UWO. A freezing order is likely to prohibit the property owner (or any other person with an interest in the property) from selling it or dealing with it in anyway. A UWO will usually be made in private without any prior notice to the owner. The first that an owner is likely to know of a UWO application is when he or she receives a copy of the UWO and freezing order. The owner will have no opportunity to argue against the UWO being imposed. From an owner's perspective the only thing to be said for a "without notice" UWO is that it should not attract publicity.