A joint investigation between the Guardian newspaper and Transparency International UK, published in November 2024, highlighted that nearly £400 million worth of UK property owned by Bangladeshi investors is now under investigation for financial crime.
The working hypothesis is that politically influential figures during Sheikh Hasina’s tenure as Prime Minister of Bangladesh have siphoned off finances from the country and invested them in the UK for their own personal gain. The investigation suggests that illicit funds are tied up in mansions, new-build apartments, and a range of other expensive real estate in London.
Duncan Hames, the Director of Policy at Transparency International UK has urged the British government to work closely with partners in Bangladesh to introduce a sanctions regime. The sanctions would freeze suspicious assets, which would prevent corrupt officials from enjoying their ‘ill-gotten gains.’
In this article we look at the inner workings of sanction regimes which might be applied in the UK to help Bangladesh recover its misappropriated assets.
Recent examples of UK sanctions on kleptocrats
In November 2024 the UK sanctioned three high-profile kleptocrats who siphoned wealth from their home countries, effectively stealing it for their own personal gain. The sanctions extended to their friends and families, and the people who helped them.
- Dmitry Firtash
Mr Firtash extracted hundreds of millions of pounds from Ukraine through corruption. He managed this by virtue of his control of gas distribution. He has hidden tens of millions of pounds of illicit funds in the UK property market. - Isabel Dos Santos
Ms Dos Santos is the daughter of Angola’s former president. She systematically abused her positions at state-run companies to embezzle at least £350 million, depriving Angola of resources and funding for much-needed development. - Aivars Lembergs
Mr Lembergs abused his political position in Latvia to commit bribery and launder money. Mr Lembergs has attempted to hide the proceeds of his corruption in investment trusts and other corporate structures, including in the name of his daughter.
Sanctions against these three individuals and people close to them mark the beginning of a new campaign by the UK Foreign Secretary to clamp down on corruption and illicit finance. They are made under the UK’s Global Anti-Corruption Sanctions Regulations 2021.
It looks as though similar powers may be able to be enforced against former government officials from Bangladesh, who are suspected of investing taxpayers’ money into UK property for their own gain.
The Global Anti-Corruption Sanctions Regulations 2021
The UK’s Global Anti-Corruption Sanctions were introduced in 2021. Under these regulations, the Secretary of State may impose sanctions where:
- there is a reasonable suspicion that the person has been involved in serious corruption, and
- when the designation would be appropriate to prevent serious corruption, and
- the designation is likely to have a significant effect on the person.
‘Serious corruption’ includes the situation where the actions undermine the Sustainable Development Goals, which is likely to be the case for funds taken illegally from Bangladesh.
Once designated as a person under sanction, the person can be targeted with financial or immigration sanctions, or director disqualification proceedings.
Financial sanctions
Financial sanctions will play a role in recovering Bangladesh’s stolen wealth. Under these sanctions, a person’s assets and banks accounts are frozen so that they can no longer deal with them freely.
Freezing orders are imposed in various circumstances, one of which is to protect the value of assets that have been misappropriated from a country until these assets can be repatriated. That is likely to be the reason relied upon when it comes to recovering assets siphoned away from Bangladesh.
Financial sanctions can be implemented through the Sanctions and Anti-Money Laundering Act 2018 (SAMLA). SAMLA gives the UK government the power to impose asset freezes for specified individuals (designated persons), who are listed on the UK Sanctions List.
These sanctions are serious, and act as a valuable way of preserving assets. The UK courts take breaches of these sanctions seriously and a person who breaches them may face a maximum of seven years in prison.
Immigration sanctions
Under the Global Anti-Corruption Sanctions Regulations, the UK Secretary of State may also impose travel bans on designated persons. This means that those individuals will be refused leave to enter the UK, or remain in the UK.
The role of the NCA
The National Crime Agency in the UK undertakes sanctions investigations and it enforces criminal breaches of financial sanctions. As such, it also has the power to forfeit sanctioned funds.
Since 2022, the NCA has had a designated ‘Combatting Kleptocracy Cell’ (CKC) which aims to investigate the evasion of criminal sanctions and the existence of high-end money laundering. The CKC was formed in response to a surge in money-laundering activity from Russia, Ukraine, and Belarus, after Russia’s invasion of Ukraine in February 2022.
However, the remit of the CKC may now extend to the situation affecting Bangladesh. It specifically targets corrupt elites holding assets in the UK.
One of its recent successes came in July 2024, when the NCA secured its first forfeiture of sanctioned funds under the Proceeds of Crime Act 2002. The money had been frozen since 2022, and was allegedly held for the benefit of Petr Aven. Mr Aven was sanctioned by the UK for supporting the government of Russia.
In 2022, the NCA obtained in Account Freezing Orders over accounts linked to Mr Aven. The agreement for the forfeiture of sanctioned funds was ratified at Westminster Magistrates Court on 29 July 2024.
This was a success for the NCA’s CKC, and demonstrates the UK’s ability to enforce the sanctions regime and recover money held unlawfully.
The current framework
There is a framework in place to impose sanctions on certain people suspected of stealing wealth from Bangladesh. Groups of anti-corruptions NGOs have written to the UK’s Foreign Secretary David Lammy to take action to identify, seize, and return assets to Bangladesh. Sanctions may form part of this strategy. At the moment, sanctions are not yet in place, but it may only be a matter of time.
