Hajiyeva v National Crime Agency

An unexplained wealth order is an investigative measure. For the politically exposed person condition in section 362B(7)(a) of the Proceeds of Crime Act 2002, the focus is on the status of the individual occupying a listed prominent public function, not the mechanism by which the function was conferred. A majority state shareholding and ultimate control may establish a state-owned enterprise. The income requirement may be established by reasonable suspicion based on the acquisition, lawful income and wealth evidence, without relying on a foreign conviction. Privileges against self-incrimination and spousal incrimination are limited to United Kingdom offences and penalties and are impliedly abrogated by the statutory scheme. Prosecution risks may inform the discretion to make an order, but negligible risks and existing safeguards do not require further undertakings.

The National Crime Agency obtained unexplained wealth orders concerning property in London. Mrs Hajiyeva applied to discharge them on eight grounds, including the interpretation of the politically exposed person condition, whether her husband’s bank was a state-owned enterprise, the sufficiency of the income evidence, privilege against self-incrimination and spousal privilege, and the proportionality of the orders.

Supperstone J rejected each ground and dismissed the application in a judgment reported at [2018] EWHC 2534 (Admin). Permission to appeal was granted on five grounds. The central issues before the Court of Appeal were the scope of the statutory requirements for a UWO and the extent to which privilege and foreign prosecution risks affected the making of such an order.

Appeal dismissed. The Court of Appeal upheld the decision refusing to discharge the unexplained wealth orders.

1. Politically exposed person. The phrase in section 362B(7)(a) of the Proceeds of Crime Act 2002 focuses on the status of the person entrusted with a prominent public function, rather than the manner in which the function was conferred. The statutory words exclude functions entrusted in the United Kingdom or another EEA State. Article 3(9) of Directive 2015/849/EU was to be applied in determining whether the relevant status existed. A person occupying one of the listed roles is, provided the statutory geographical condition is met, treated as entrusted with a prominent public function.
2. State-owned enterprise. A majority state shareholding, together with ultimate control, entitled the judge to conclude on the facts that the bank was a state-owned enterprise. The issue was to be determined under English law and did not require a close analysis of Azerbaijani law. The husband was therefore a politically exposed person as chairman of the management body, and the appellant was a politically exposed person as his family member.
3. Income requirement. The requirement in section 362B(3) was satisfied by reasonable suspicion that the known sources of lawfully obtained income were insufficient to fund the property. The acquisition process, the husband’s income as a state employee, and the unexplained or vague evidence of his wealth were sufficient independently of his foreign conviction. The court accepted, as an alternative observation, that a foreign conviction obtained in circumstances involving a breach of jus cogens norms might not properly support such suspicion.
4. Privilege. Section 14 of the Civil Evidence Act 1968 applies only to United Kingdom criminal offences and penalties. A real and appreciable risk of prosecution was required; a bare assertion of privilege did not suffice. The UWO scheme impliedly abrogated the relevant privileges, since otherwise the statutory power to require information and documents would be substantially undermined. The use-immunity provision in section 362F supported that conclusion.
5. Discretion and safeguards. Risks of prosecution in the United Kingdom or abroad could in principle inform the discretion under section 362A(1) of the Proceeds of Crime Act 2002. On the facts, the risks were negligible. The NCA’s public-law and statutory safeguards meant that no additional undertaking or other safeguard was required.

• Court of Appeal (Civil Division): dismissed the appeal against the refusal to discharge the unexplained wealth orders.
• Administrative Court (Queen’s Bench Division): Supperstone J dismissed the application to discharge the orders and refused leave to appeal in the judgment reported at [2018] EWHC 2534 (Admin).