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FINANCIAL CRIME
In October, we learnt that these UWOs had
been issued against Zamira Hajiyeva, the wife
of Jahangir Hajiyev, an Azerbaijani banker who
is serving a 15-year prison sentence for
embezzlement. This case offers a glimpse into
how this still relatively new power is likely to be
used by UK authorities. Will this headlinegrabbing case become a benchmark for the
future use of UWOs, with the NCA claiming that
it has 140 or so cases waiting in the pipeline?
Combining opinions from members of our UK
and US teams, we consider why the
introduction of UWOs is such a significant
development, and how UWOs may be utilised
by UK investigators in the future.
UWOs are investigative orders made by the High Court
compelling a person(s) holding property to provide
prescribed information, including details of their interest
in the property, and how they acquired and paid for it.
UWOs can be directly sought by certain authorities –
namely HM Revenue and Customs, the Financial
Conduct Authority, the Crown Prosecution Service, the
Serious Fraud Office and the NCA – upon an application
to the High Court. Other agencies can refer their
evidence to one of these authorities and request
that a UWO application be made.
Crucially, the respondent does not need to have been
convicted of a criminal offence, nor the property shown
to be the instrument in, or the proceeds of, crime for a
UWO to be issued. As such, UWOs have sought to plug
a perceived gap in prior civil recovery cases, where a lack
of evidence of identifiable income to obtain a property
was deemed insufficient to justify a recovery action.
To issue a UWO, the Court need only be satisfied – if the
respondent is not a Politically Exposed Person (PEP) –
about their connection to serious crime. Although UWOs
cannot be used as evidence in criminal proceedings, they
could play a crucial part following, or in tandem with,
criminal prosecutions or civil asset recovery.
A year on, certain significant features of UWOs continue
to make them a particularly important development
in UK law enforcement, as well as from an international
perspective.
•Once a UWO has been obtained, the burden of proof
is reversed – the respondent must prove a legitimate
source of wealth for the property. This is fundamentally
different from the standard that applies in most
criminal proceedings worldwide. However, the UK was
not the first country to implement such a process.
Authorities in Ireland, Australia and Colombia have
similar powers, and in such cases there is no prerequisite to prove that a criminal offence has been
committed before the equivalent order is obtained,
and the burden of proof is similarly reversed.
•UWOs may be coupled with interim freezing orders,
which prevent the property from being dissipated
before the respondent answers – as was the case
with the UWOs against Mrs Hajiyeva. As such, UWOs
provide a far broader power to restrain suspicious
property than has previously existed in the UK or in
most other countries. In the US for example, before
authorities may restrain the property of a suspect,
they must first demonstrate probable cause to believe
that the property is “tainted” – i.e., that it was derived
from or involved in criminal activity. Under the UK’s
UWO scheme, by contrast, property may effectively
be presumed tainted, in the absence of evidence of
a legitimate source, for the purpose of issuing a
freezing order.
SAMANTHA PAUL
Knowledge
Development
Lawyer, London
34/

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