National Crime Agency v Hajiyeva (Rev 1)

A court may make an unexplained wealth order where the statutory requirements are met at the investigative stage. A politically exposed person includes a family member of an individual entrusted with prominent public functions by a non-EEA State. Whether an enterprise is state-owned is determined under UK law by ownership and control, rather than its status under foreign law. A foreign conviction may be considered when assessing the income requirement, even where serious concerns exist about the fairness of the foreign proceedings, unless the conviction resulted from a flagrant denial of justice of the relevant kind. The statutory consequences of non-compliance with an unexplained wealth order do not exclude committal proceedings for contempt. The privilege against self-incrimination and spousal privilege may be excluded by necessary implication and by statute.

The National Crime Agency obtained an unexplained wealth order under the Proceeds of Crime Act 2002 concerning a London property purchased through a British Virgin Islands company. The order was made against Mrs A, who was said to be the wife of the former chairman of a majority state-owned bank in a non-EEA country. Her husband had been convicted there of serious financial offences.

Mrs A applied to discharge the order, challenging the politically exposed person requirement, the income requirement, reliance on the foreign conviction, the penal notice, alleged interference with property rights, privilege, and the exercise of discretion. The central issues were whether the statutory conditions were satisfied and whether any of those matters required the order to be discharged.

1. Application dismissed. None of the eight grounds for discharging the unexplained wealth order was made out.
2. The bank was a state-owned enterprise for the purposes of article 3(9)(g) of Directive 2015/849/EU. The Government had a majority shareholding and ultimate control. The question was to be determined under UK law by ownership and control, not by the bank’s legal status under foreign law.
3. The words in section 362B(7)(a) requiring prominent public functions to have been entrusted by an international organisation or by a State other than the United Kingdom or another EEA State did not impose an additional substantive condition. They primarily excluded UK and EEA politically exposed persons. The husband was therefore a politically exposed person, and Mrs A was a politically exposed person as his family member.
4. The income requirement was satisfied. There were reasonable grounds for suspecting that the known sources of lawfully obtained income were insufficient to acquire the property. The NCA could have regard to the husband’s foreign conviction at this investigative stage. There was no general exclusionary rule preventing reliance on a conviction obtained in allegedly unfair proceedings, and the evidence did not establish the exceptional circumstances required to ignore it.
5. Section 362C provided for the effect of non-compliance on the recoverability of property. It did not constitute a complete code excluding the court’s power to attach a penal notice or enforce compliance through committal proceedings under CPR Part 81. The penal notice therefore did not invalidate the order.
6. Any interference with property rights was proportionate. The order imposed a modest investigative burden and pursued the legitimate aim of investigating suspected unlawful wealth. The privileges against self-incrimination and spousal incrimination did not assist Mrs A. Section 14(1) of the Civil Evidence Act 1968 did not extend to foreign criminal liability; there was no real and appreciable risk of UK prosecution; and the privileges were excluded by necessary implication from the UWO regime and, on the facts, by section 13 of the Fraud Act 2006.
7. Possible foreign prosecution was relevant to the court’s discretion but did not justify discharge. The order was investigative and was made against Mrs A, who had represented that she was the beneficial owner of the property-holding company. Questions about ensuring a fair trial could be addressed if civil recovery proceedings were later brought.

First-instance application to discharge an unexplained wealth order. The application was dismissed by the High Court (Administrative Court).