A flagship “McMafia” law designed to target illict wealth brought into Britain by corrupt oligarchs from Russia and elsewhere is “failing to turn the tide” on dirty money, campaigners warned today after an official report revealed that it has not been used for the past two years.
Unexplained Wealth Orders came into force in 2018 under legislation trumpeted by ministers as a powerful weapon for targeting corrupt and criminal money flowing into London property and Britain’s financial system.
It was used for the first time soon after in an attempt to force a London woman, Zamira Hajiyeva, to explain the source of the money used to buy her £15 million Knightsbridge home, a golf course in Berkshire and a £16 million of luxury items from Harrods.
Enforcement action against her by the National Crime Agency is continuing, but only three other people, including an alleged crime gang money launderer from Leeds, have been targeted since and ministers have now admitted in report to Parliament that no new applications have been sought for more than two years.
The Home Office report, which covers asset recovery from 2016 to 2021, gives no explanation for the failure, but states: “There have not been any UWOs obtained since July 2019”.
One likely cause, however, is an expensive defeat for the National Crime Agency last year when the High Court threw out unexplained wealth orders secured in May 2019 that were targeting three London homes worth £80 million owned on behalf of Nurali Aliyev and his mother Dariga Nazarbayeva, both members of the Kazakh elite. The pair had denied any wrongdoing and the judge in the case, Mrs Justice Lang, dismissed as “unreliable” the NCA’s argument that the source of the money used to buy the homes was Mr Aliyev’s notorious father Rakhat Aliyev, who was accused of crimes including murder before his death in prison.
Campaigners today expressed dismay and warned that under-funding of the National Crime Agency and police was to blame for the failure to use the legislation – which was dubbed the “McMafia law” after the BBC series of corrupt Russian oligarchs in Britain – more extensively.
Susan Hawley, from the campaign group Spotlight on Corruption, said that Unexplained Wealth Orders “are languishing unused on the books” and that changes were needed to stop law enforcers “from facing massive bills when they go wrong”.
Helena Wood, from the Royal United Services Institute think tank, added:”Despite the promise of UWOs being a turning point in the UK’s fight against dirty money, lack of investment means they have failed to turn the tide. Crime still pays in the UK and we see no signs of this changing”.
Duncan Hames, a former MP and now a director at Transparency International, said the lack of new Unexplained Wealth Orders was “disappointing”, although he cautioned that the threat of litigation might be encouraging some with suspect assets to reach settlements with law enforcers to avoid coming to court.