Last week, the National Crime Agency (NCA) saw its Unexplained Wealth Orders (UWOs) against the daughter and grandson of a former president of Kazakhstan overturned by the High Court.
UWOs are an extension to prosecutors’ powers which were introduced by the Criminal Finances Act 2017. They require a person to disclose to the NCA details of how he/she obtained certain property specified in the UWO. Where the respondent fails to adequately describe the source of funding, the property in question can be confiscated. The NCA has only used these powers on a few occasions previously. In 2018 it successfully obtained UWOs against Zamira Hajiyeva, the wife of Jahangir Hajiyev, the former chairman of the International Bank of Azerbaijan. In 2019 it obtained UWOs against a person in Northern Ireland in connection with an investigation into organised crime.
The NCA had obtained the UWOs and interim freezing orders over three properties in London (with a combined value of £80 million) in 2019. Though occupied by family of the former Kazakh president Nursultan Nazarbayev, the properties were held by offshore companies. The NCA alleged there were reasons to believe that the properties were linked to a politically exposed person involved in serious crime and imposed the orders to facilitate their investigation into whether these were vehicles for money laundering.
Mr Aliyev and Dr Nazarbayeva, the beneficial owners of the properties, appealed to the High Court to have the orders overturned. At a remote hearing Mrs Justice Lang discharged the UWOs. The Court held that the owners of the property had filed sufficient “cogent evidence” of the legitimate source of the funds. The NCA’s assumptions regarding the source of the money used to purchase the properties were said to be “unreliable”.
The NCA has stated that it will appeal the High Court decision, adding that while it had “always expected” significant legal challenges to UWOs, it is vital to ensure the correct precedents are set.
This decision shows that in practice, although the burden to prove untainted funds lies with the property owner, the courts will be rigorous in ensuring that the NCA provides the necessary evidence to justify its use of the powers.