A group of anti-corruption organisations have put together a briefing for the regulated sector, putting them on notice about suspicious transactions related to Bangladesh.
They have identified red flags in five key areas to help identify potential money laundering and illicit financial flows. Those key areas are:
- Shell company jurisdictions
- Money movement methods
- Transit countries
- Conveyancing
- Suspicions of bribery
According to Transparency International UK, the UK has been a key destination for suspicious funds from Bangladesh. The money appears to have gone into property, high value goods, and private education (among other things).
In this article, we look at the legal routes to recovering those stolen funds in the UK, particularly in relation to three of the key areas identified in the report.
Shell company jurisdictions
Companies incorporated in certain jurisdictions have been used to manage and obscure wealth. Typically, those jurisdictions are: British Virgin Islands, Isle of Man, Singapore, United Arab Emirates, and the UK.
In the UK, we can use asset tracing tools, to uncover concealed beneficial ownership, and / or identify where obscured wealth has ended up.
Those tools include Norwich Pharmacal Orders, which allow us to obtain documents from a third party. Those documents may lead to the ultimate beneficial owner, or to the whereabouts of the funds.
We can also use letters of request to foreign courts to obtain evidence in support of proceedings in other jurisdictions. These letters of request can retrieve information from registered agent of company to get information about the beneficial ownership, shareholding, and directors of companies which appear to be involved in a fraud or illicit activity.
Freezing injunctions are another powerful tool in UK proceedings. Where there is a real risk of dissipation of the assets, the Court can freeze them, putting strict prohibitions on who can deal with the assets and how.
Conveyancing
Transparency International UK found almost £400 million worth of UK property owned by a small group of regime insiders who are under investigation in Bangladesh.
In the UK, we can apply to the courts to freeze assets linked to alleged corruption. After an investigation, the asset may be considered “recoverable property” for the purposes of a civil recovery order under the Proceeds of Crime Act 2002. It may then be forfeited.
Suspicions of bribery
The briefing identifies another area of concern to be offshore bribes paid to regime insiders in exchange for granting overpriced contracts.
In the UK, the Bribery Act 2010 makes it possible to prosecute any company with a UK connection for any bribery committed anywhere in the world. The UK legislation on bribery is considered to be the strictest and most far-reaching anti-bribery legislation in the world.
Under the Act, it is an offence to offer, promise or give a bribe or to request, agree to receive or accept a bribe. There is also a separate offence of bribery of a foreign public official.
Notably, Section 7 of the Act creates a strict liability offence for companies and partnerships of failing to prevent bribery. That means that if bribery is committed in a company’s name, its only defence is to show it had what could be considered adequate procedures in place to prevent bribery.
The Act has international reach so any foreign company that does any business in the UK could be prosecuted. That’s the case even if the bribery was committed outside of the UK.
Penalties under the Bribery Act can be as severe as ten years’ imprisonment and unlimited fines.
Our expertise
At Rahman Ravelli we have experts in civil recovery, asset tracing, and bribery and corruption law. We have years of experience in obtaining civil recovery orders and freezing injunctions.
We also help companies with international investigations into bribery and corruption. Our bribery experts help businesses who find themselves involved in a bribery investigation or who believe that they may be about to be the subject of an investigation. We help with prosecutions, and defences of these sorts of cases.
