The High Court of the United Kingdom has discharged three unexplained wealth orders that were issued in May 2019. The UWOs, issued pursuant to part 8 of the Proceeds of Crime Act 2002, required the respondents to provide a statement setting out the nature of their interests in a specified property, and explain how they obtained the property. They concerned three London properties registered to owners named as Villa Magna Foundation, Manrick Private Foundation, Alderton Investments Limited, and Tropicana Assets Foundation.
The respondents challenged the UWOs on the grounds that the UK National Crime Agency did not apply the requirements of POCA section 362B correctly, the UWOs were sought on a flawed basis, and due to a material non-disclosure by the NCA at an ex parte hearing before the judge. As noted by the court, although the onus is on the NCA to satisfy the court that the statutory requirements are met, it is the court that must determine whether there is reasonable cause to believe that the respondent owns the property, is a politically exposed person, and that there are reasonable grounds for suspecting that the known sources of the respondent’s lawfully obtained income would not be sufficient to enable the respondent to obtain the subject property. The court noted further that the purpose of a UWO is to provide law enforcement with a tool for obtaining information about a property, in order to assist the NCA in conducting an investigation into whether property is recoverable under POCA.
According to the court documents, evidence was presented by the NCA inspector to support the claim that the properties were acquired as a means of laundering the proceeds of unlawful conduct by a Kazakh national, Rakhat Aliyev, who died in February 2015. The respondents “voluntarily provided extensive information about the purchase and transfer of the properties, their registered owners, and the [ultimate beneficial owners],” indicating that the properties belong to Aliyev’s wife and son. For this and other reasons, the court found that the NCA had not met its burden, and discharged the orders.
The NCA announced that it would appeal the court’s decision to discharge the UWOs, noting “[t]he NCA is tenacious. We have been very clear that we will use all the legislation at our disposal to pursue suspected illicit finance and we will continue to do so.”