Syed Rahman details the National Crime Agency’s securing of funds under POCA.
For the first time in the UK, the National Crime Agency (NCA) has secured the forfeiture of sanctioned funds under the Proceeds of Crime Act (POCA).
The money, which the NCA argued was held for the benefit of Russian oligarch Petr Aven, despite not being in his name, had been frozen since 2022, when he was sanctioned by the UK for supporting the government of Russia. Mr Aven is the former head of Russia's largest commercial bank.
The NCA believed that attempts to relocate the funds - and transactions made after March 15, 2022 - by Mr Aven's estate manager, Stephen Gater were in breach of the sanctions imposed on Aven. These transactions included the payment of salaries to over 20 members of Mr Aven's household staff, and the sale of a Bentley Bentayga worth £160,000. Under the Russia Regulations, it is prohibited for UK persons to deal with funds owned, held or controlled by a designated person.
In 2022, the NCA obtained nine Account Freezing Orders over accounts linked to Mr Aven, together with two sets of detained cash. The agreement between the NCA and Stephen Gater for the forfeiture of £783,827.34 was ratified at Westminster Magistrates Court yesterday (29 July 2024). It is understood that this was a civil recovery order made under Part 5 of POCA, whereby the relevant funds must be determined as property obtained through unlawful conduct (i.e. recoverable property) or intended for use in unlawful conduct. The attempted relocation of the funds effectively made it recoverable property. The agreement, however, resulted in the NCA not needing to establish that the property was recoverable property and therefore avoiding any litigation risk.
For the NCA, this is a notable milestone that brings to an end a lengthy and involved investigation by its Combatting Kleptocracy Cell.
Despite Mr Aven agreeing to forfeit the funds in this matter, the case is nonetheless a clear signal of the NCA’s intention to enforce misconduct related to sanctions using both civil and criminal powers at its disposal. While it is newsworthy for being a first time in the UK that the NCA has secured the forfeiture of sanctioned funds under POCA, this may well prove to be the first of many such cases.
This case is a sharp reminder that best practice policies should be incorporated and acted upon as early as possible. It is also an illustration of the criminal risk for individuals and entities when dealing with frozen assets, which UK authorities now have the power to punish on a strict liability basis. In this regard, enforcement authorities place great emphasis on timely disclosure and cooperation. Anything that can be done to satisfy this can only assist with attempts to secure the best possible outcome.
