Author: Azizur Rahman
15 March 2018
2 min read
A leading business crime lawyer believes many wealthy Russians may face a legal fight to keep hold of their UK assets due to political tensions.
Aziz Rahman, of award-winning legal firm Rahman Ravelli, is concerned that many Russian owners of expensive UK property may become subjects of unexplained wealth orders (UWO’s), as relations deteriorate between the two countries following the Salisbury poisoning of former Soviet spy Sergei Skripal and his daughter.
Mr Rahman has emphasised the need for Russian owners of UK assets to seek immediate legal advice if they believe they may be targeted for a UWO. A UWO is a new way that the UK authorities can seize assets if they believe that a person acquired them through criminal behaviour.
He said: “With the UK retaliating against Russia over the poisoning in Salisbury, the issue of Russians owning large amounts of assets in the UK must be being considered by the authorities here.
“If a UWO is issued against such a person, they could very quickly lose assets that may have cost them huge amounts of money. Anyone who is the subject of a UWO - or fears they are about to be – must act quickly to take advice on how to defend what they own.
“This defence can mean disputing the assumptions that the authorities are making by producing evidence that disproves any allegations. But it can also mean challenging the way the UWO has been obtained against a person – as the authorities can, and do, make mistakes.’’
UWO’s were introduced by the Criminal Finances Act 2017. An Order requires a person to explain how an asset, such as a house, was acquired. If the authorities are not satisfied with the person’s explanation, they may then attempt to seize the assets using powers under the Proceeds of Crime Act 2002.
The UK’s first two UWO’s were issued last month – against a political figure believed to be from a country belonging to the Commonwealth of Independent States (CIS); which consists of ten former Soviet republics as well as Georgia and Azerbaijan.
Land Registry records suggest that 40,000 properties in the capital are now owned by secretive offshore companies. Transparency International says it has identified UK property worth a total of £4.4 billion that should be subject to UWO’s.
Research from estate agents Knight Frank has previously indicated that nearly half of all £1 million-plus properties in London are bought by foreign nationals; with one in ten of these buyers being from Russia or the CIS.
UK authorities may justify sudden interest in Russian-owned properties because of suspected links with money laundering. Russia is considered a country of primary concern for money laundering and financial crime by the US Department of State.
But Mr Rahman believes the use of UWO’s could go beyond the targeting of Russian nationals.
He added: “UWO’s could be used to target owners of UK assets that come from a number of countries that do not have a good reputation when it comes to corruption.
“Russia is not the only country that the US considers to have a money laundering problem. Countries such as Nigeria, Indonesia, the UAE, Iran, Lebanon and India are all viewed in the same way by the US. And none of them are highly-rated by Transparency International for their efforts to tackle corruption.
“With UWO’s now part of the UK legal landscape, we could see many people from such countries being asked to explain how they acquired their prestigious UK assets.
“And without the right legal advice, many could struggle to satisfy the authorities that they should be allowed to keep what is theirs.’’
Aziz Rahman is Senior Partner at Rahman Ravelli and its founder. His ability to coordinate national, international and multi-agency defences has led to success in some of the most significant corporate crime cases of this century and top rankings in international legal guides. He is recognised worldwide as one of the most capable legal experts regarding top-level, high-value commercial and financial disputes.