“This case has highlighted major weaknesses in the UK’s defences against dirty money that should be addressed urgently. Secretive corporate ownership continues to be a pervasive issue across the UK with tens of thousands of properties owned by opaque offshore vehicles... The government should require transparency over who really owns secretive offshore companies holding UK property, making it easier to identify property bought with suspicious wealth and giving the corrupt no place to hide.”
The Unexplained Wealth Order (UWO) was incorporated into UK law in January 2018 as part of the Criminal Finances Act 2017. It is a type of court order issued to compel someone to reveal the sources of their unexplained wealth related to assets that are worth more than £50,000. UWO is intended to provide regulators and law enforcement more tools to combat tax evasion, money laundering, and terrorism financing.
UWO is somewhat similar to the U.S. Geographic Targeting Orders in detecting the use of high-value assets as tools for illicit activity or financial concealment. The UK has recently seen effects on foreign purchases of real estate that mirror the reduction in cash-for-property transactions in South Florida reported in summer 2017.
"There are, however, reasons to be wary of perceiving the introduction of UWOs as a cure-all for the UK’s money laundering problems. These court orders are ineffective as soon as a defendant can provide an explanation for the source of their wealth... Legal difficulties and costs are other factors that can lead to delays in the UK’s fight against money laundering, while information obtained via a UWO cannot be used in criminal proceedings against the respondent."
In her judgment Justice Lang said she was not satisfied that the NCA had proved that the homes were bought with dirty money. The NCA said it disagreed with today’s decision and would appeal. The NCA was trying to seize the houses, including one on the so-called billionaires row in Hampstead, from relatives of Kazakhstan’s former dictator Nursultan Nazarbayev. Nurali Aliyev – who owned one of the houses – is the son of Rakhat Aliyev, who died in Austrian prison in 2015 awaiting trial for murder. He was head of Kazakhstan’s tax police, deputy chief of its security service and first vice foreign minister. He amassed a fortune during his time in government and was formerly married to the daughter of Kazakhstan’s former dictator.