National Crime Agency v Javanshir Feyziyev & Ors

A property freezing order under Part 5 of the Proceeds of Crime Act 2002 requires a good arguable case that the property is recoverable or associated property. The person against whom the order is made need not have participated in the unlawful conduct that tainted the property.

The statutory conditions do not expressly require proof of dissipation risk. However, the court’s discretion to make or continue an order is unlikely to be exercised where there is no risk. The relevant risk is a real risk of unjustified dissipation established by solid evidence. A good arguable case of dishonesty is highly relevant but does not automatically establish that risk.

On a discharge application, the court independently assesses the evidence. Material non-disclosure or unfair presentation may justify discharge, but the sanction is discretionary and the order may continue where the evidence independently supports it.

The National Crime Agency obtained a without-notice property freezing order over 22 London properties, rental income and funds in a Liechtenstein account. The order was made under Part 5 of the Proceeds of Crime Act 2002.

The first and second respondents applied to discharge the order. They argued that there was no real risk of dissipation, that the NCA had failed in its duties of full and frank disclosure and fair presentation at the without-notice hearing, and that there was no good arguable case that the property was recoverable.

The central issues were whether the statutory threshold was met, how dissipation risk affected the court’s discretion, and whether the alleged failures at the without-notice hearing required discharge.

1. Recoverable property. The court held that the NCA had established a good arguable case under section 245A of the Proceeds of Crime Act 2002 that the properties and other assets were recoverable property. The tracing evidence linked funds obtained through unlawful conduct, including money laundering, with the acquisition of the assets. The statutory scheme does not require proof that the respondents themselves committed a specific criminal offence or knew that the property was tainted.
2. Risk of dissipation. Although section 245A does not expressly make dissipation a condition, it is a material consideration in exercising the discretion to make or continue an order. The court adopted the principles summarised in Lakatamia: the risk must be real and concern unjustified dissipation; it must be established by solid evidence; dishonesty is insufficient unless it points to a risk that assets may be dissipated; offshore structures are relevant but not determinative; and the assessment is fact-specific and cumulative. The tracing evidence, the alleged dishonest money laundering, overseas connections and the ability to place the assets beyond reach established a real risk.
3. Without-notice conduct. The NCA had made no material non-disclosure and had presented the respondents’ position fairly. Errors and omissions identified by the respondents did not materially affect the original decision. The court was not acting as an appellate court reviewing the first judge and was independently satisfied that the order remained justified. Discharge on the penal basis discussed in Fundo Soberano would in any event be exceptional where the evidence supported continuation.
4. Proportionality and order. The interference with Article 8 and Article 1 of Protocol 1 rights was lawful and proportionate in pursuit of preventing crime. The property freezing order was continued over all the specified property, including the family home. The NCA was required to commence civil recovery proceedings or apply for continuation by 22 June 2024, failing which the order would be set aside.

First instance decision on an application to discharge a property freezing order made without notice by Mrs Justice Heather Williams. The order was continued by Mr Justice Poole.