Unexplained Wealth Orders

Happy days are here at Harrods

But possibly not for all their customers

It can be handy living just a stone’s throw from your friendly local corner shop. You need to top up on a few household essentials? No problem. Five minutes is all it takes to make your purchase and get yourself safely back home.

A luxury pad worth £15,000,000

Zamira Hajiyeva was a case in point. She was certainly a fan of her neighbourhood store. In fact, so keen was she to support it, that between 2006 and 2016, she filled its tills to the tune of £16,309,077.87. Her corner shop? A little place you may know of called Harrods. Mrs Hajiyeva’s nearby home? A luxury pad valued at a mere £15,000,000. But this spendthrift lady and her precious home may soon be parted. For the National Crime Agency (NCA) is on her case.

The saga kicked off early in 2018, when the UK government, long suspicious of the activities of certain wealthy foreign residents, introduced the first Unexplained Wealth Orders (UWOs). These are a new anti-financial crime power, targeted at foreign government officials and their families. These people are believed to have laundered stolen money through British property – an exercise that the government says it’s determined to root out.

Drowning her sorrows to the tune of £16,000,000

Zamira Hajiyeva’s husband is serving a 15-year sentence in their native Azerbaijan for stealing millions from his state-controlled bank. It seems that the good lady, clearly missing her husband, is drowning her sorrows by spending some of his ill-gotten gains.

Let’s look at a little more closely at Mrs. Hajiyeva’s spending habits. A browse through her Harrods loyalty card records makes fascinating reading. Her early purchases in 2006 are relatively modest – £842 on children’s books, £140 on perfume. But then, slowly but surely, the spending picks up – £1,600 on Miu Miu designer clothes and a further £1,539 on Ferragamo shoes. In March 2007, she spends £10,616 on Miu Miu, followed £17,000 on Tom Dixon designer goods, £1.4 million on Cartier and £35m on Boucheron jewellery.

The total expenditure of over £16m in ten years was made using 54 credit cards, many of which were issued by her husband’s defrauded bank.

Explaining the inexplicable

So what’s the likely outcome of the NCA’s investigations? By law, the onus is on Mrs. Hajiyeva to account for the expenditure. Or, more accurately, to explain how she came across the many millions of pounds that she has spent so freely over the past ten years or more. The High Court has ordered her to disclose how, despite having no income other than interest on her British bank accounts, she had become so inexplicably wealthy. If she can’t account for her riches, the government plans to take over her property.

There is now a second similar case underway. This suspect, a foreign official, is described by the government as a ‘politically exposed person’. As such, the courts are forbidden from naming him. The High Court has frozen his three London homes, held by off-shore companies and valued at over £80m. Unless he can explain the origins of the cash used to purchase the properties, he too will be in danger of losing them.

Harrods - an obligation to blow the whistle?

But what of our little corner shop, thrust into the national limelight by these investigations? Well, it seems to be doing quite nicely. In 2018, Harrods posted an increase in profits of 9%, brought about by an increase in sales of 6.8% to over 2.1 billion pounds.

These healthy figures, posted in an era notoriously difficult for bricks and mortar retailers, are admirable. But they do beg the question. Should there be an obligation on the part of Harrods and its fellow retail giants, to flag up the unnaturally high spending patterns of their customers? Should they be encouraged to turn a blind eye to suspicious retail habits?

Here to help

We’re delighted to be helping clients from all parts of the wealth spectrum. Regardless of their earning or spending power, they all have one thing in common. The advice they receive from us is unfailingly transparent, honest and legal. Do you need help or guidance with any aspect of your personal finances? Give us a call – 020 3008 7820. We are, after all – here to help.

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This legal information is not the same as legal advice and you may not rely on our post as a recommendation of any particular legal understanding. Please, consult an attorney if you’d like to get advice on your interpretation of this article.

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