What exactly are McMafia laws and what does it have to do with Mrs Hajiyeva spending £16 million in Harrods? Alan Ward, a senior lawyer at Stephenson Harwood specialising in corporate and white-collar crime, uncovers the details of the UK’s controversial anti-money laundering powers of Unexplained Wealth Orders (UWOs), both its background and its problems.
Driven by his passion for fairness and justice, Alan advises clients accused of crimes such as corruption, money laundering and market abuse.
His work has had clients acquitted in an ‘absolute heartbeat’ during a politically motivated extradition case involving British traders who he says were ‘wheeled across the Atlantic and made to stand trial for no good reason’.
McMafia money and UWOs
Headlines sounding the alarm on McMafia money, crimes, and laws have been hard to avoid. The root has been the lobbying and accountancy work of campaign groups such as Transparency International (TI) finding that £4.4 billion of London’s assets derive from the proceeds of crime – that’s right, billion!
In response, in 2018, the UK Government brought into force a piece of legislation to investigate and take back illegally sourced money and assets, or McMafia money, using UWOs ‘an extraordinary form of disclosure order’.
What makes UWOs extraordinary?
Prior to UWOs, for the government to tackle McMafia money it had to prove the criminality to the courts. Instead, UWOs have reversed this burden of proof.
“A UWO says you prove to us that it is not criminal property. And it is extraordinary in that regard as it completely inverts the recovery proceedings”, Alan explains.
£16 million Harrods spend
The first widely publicized case concerned Mrs Hajiyeva whose £16 million spending habits in Harrods didn’t quite add up to her husband’s state salary in Azerbaijan.
To explain the difference, Alan says, is an accountancy nightmare made all the more difficult when the documentation is in another country and in a foreign language.
“Being the recipient of UWOs is tantamount to being accused, very publicly, of being mixed up in McMafia style conduct” he warns. And without clients being given the opportunity to explain themselves, he says, it is an ‘obvious and real unfairness to me’.
Anonymity is said to be a client’s main concern with UWOs. However, if the cat is out of the bag and the media get a scent of who is next to be served, Alan suggests the objective would be for lawyers to work with communications professionals so the public ‘appreciate the unfairness of the process’.
With only a few cases still on the books yet 140 said to be in progress, it is yet to be seen where UWOs will end up.
Discussed in this podcast episode