KLEPTOCRACY UWO Unexplained Wealth Orders

U.K. Takes Fight To Kazakhstan’s Wealthy Elite Over Unexplained ‘Billionaires’ Row’ Mansion

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Snow Leopard Foundation Gala 2019, Nur-Sultan City, Kazakhstan
Nurali Aliyev speaks at the Snow Leopard Foundation Gala 2019 at Astana Arena on July 04, 2019 in Astana, Kazakhstan. (Photo by Ferhat Zupcevic/Getty Images for the Snow Leopard Foundation) GETTY IMAGES FOR SNOW LEOPARD FOUNDATION

A man­sion owned by Nurali Aliyev, the grand­son of Kazakhstan’s for­mer President Nursultan Nazarbayev has been “frozen” by the U.K.’s High Court after the sec­ond use of a so-called ‘McMafia’ Wealth Order.

Known offi­cial­ly as an “Unexplained Wealth Order”, the “inves­tiga­tive tool” gives the U.K.’s National Crime Agency the pow­er to seize the assets of a what’s known as a “polit­i­cal­ly exposed per­son” if they are unable to explain the source of their wealth.

One of the three prop­er­ties in ques­tion is found on London’s “Billionaires’ Row” and is owned by com­pa­nies locat­ed off­shore. The street was described by David Ireland, chief exec­u­tive of the Homes From Empty Homes group in the Guardian as an area where “high val­ue” prop­er­ties are used as an “extreme invest­ment vehi­cle.”

Snow Leopard Foundation Gala 2019, Nur-Sultan City, Kazakhstan
Nurali Aliyev attends the Snow Leopard Foundation Gala 2019 at Astana Arena on July 04, 2019 in … [+] GETTY IMAGES FOR SNOW LEOPARD FOUNDATION

Today In: Billionaires

The three prop­er­ties are said by Transparency International to be worth over £80 mil­lion.

The BBC report that the “high secu­ri­ty man­sion” is on “one of the most expen­sive roads in Britain” and the 10-bed­room home has an “under­ground pool, trop­i­cal show­ers, a glass domed roof, a ded­i­cat­ed cin­e­ma and sep­a­rate quar­ters for staff.”

Reacting to the devel­op­ments, Duncan Hames from Transparency International, one of the authors of the report that led to the even­tu­al leg­is­la­tion, told Forbes, “Senior politi­cians and their cronies have embez­zled mil­lions of pounds worth of assets that ought to belong to the pop­u­la­tions that they were meant to be serv­ing. And instead [they] extract­ed them for their own ben­e­fit. People become inex­plic­a­bly wealthy and [they] hold that wealth in places like London.”

CIS and EEU Summits in Saint Petersburg
Russian President Vladimir Putin ® greets First Kazakh President Nursultan Nazarbayev (L) dur­ing … [+] GETTY IMAGES

Documents seen by Forbes con­firm that the man­sion was frozen before two com­pa­nies Manrick Private Foundation, incor­po­rat­ed in Curacao, and Alderton Investments Ltd, incor­po­rat­ed in Anguilla, could final­ize the sale. The two off­shore com­pa­nies that own the prop­er­ties have applied to have the orders quashed. Mr Nurali Aliyev is list­ed in the doc­u­ments as the “Occupier.” 

Transparency adds that should the appeal today fail, the respon­dents will have to show how they were law­ful­ly able to afford £80m worth of London prop­er­ty. An inad­e­quate expla­na­tion could be used to con­fis­cate the prop­er­ties.

A lawyer for Nurali Aliyev told the BBC, “Nurali Aliyev has sought to assist the NCA by pro­vid­ing them with rel­e­vant infor­ma­tion in rela­tion to this case. He is now chal­leng­ing the NCA’s approach and will robust­ly defend the pro­ceed­ings. ”

Clare Montgomery QC, act­ing on the off­shore com­pa­nies’ behalf did not respond to Forbes.

Story So Far

In May 2019 the U.K’s National Crime Agency (NCA) announced that an Unexplained Wealth Order for three London prop­er­ties “linked to a polit­i­cal­ly exposed per­son believed to be involved in seri­ous crime”, had been secured. Until today we did not know the own­er or the address of these prop­er­ties. 

Andy Lewis, Head of Asset Denial at the NCA, said at the time that Unexplained Wealth Orders are “a pow­er­ful tool in being able to inves­ti­gate illic­it finance flow­ing into the UK.” Confirming that the indi­vid­u­als behind these off­shore com­pa­nies, now known to be Manrick Private Foundation, and Alderton Investments Ltd, “have to explain how the three prop­er­ties were obtained.”

An inter­im freez­ing order was also grant­ed stop­ping the man­sion from being “sold, trans­ferred or dis­si­pat­ed” while the inves­ti­ga­tion con­tin­ues.

Forbes has request­ed a com­ment from Nurali Aliyev’s Capital Holding firm.

TRUMP NAZARBAYEV
Nursultan Nazarbayev, Kazakhstan’s pres­i­dent, left, speaks while U.S. President Donald Trump lis­tens … [+] © 2018 BLOOMBERG FINANCE LP

Nurali Aliyev & Family

Nurali Aliyev describes him­self on LinkedIn as an “Investor Entrepreneur.” He is list­ed as once being vice-pres­i­dent of the Development Bank of Kazakhstan, as well as chair­man and CEO of TransTelekom a telecom­mu­ni­ca­tions com­pa­ny in Kazakhstan between 2013 and 2014.

He is also list­ed as being deputy may­or of the cap­i­tal city, Astana, between 2014 and 2016 and fea­tures in the ICIJ data­base com­piled from the Panama Papers leak.

Until his res­ig­na­tion in March 2019 Kazakhstan’s Nursultan Nazarbayev was one of the only liv­ing for­mer Soviet lead­ers still in pow­er. After President Donald Trump was elect­ed in 2016, CBS report­ed that the then pres­i­dent-elect had con­grat­u­lat­ed a “dic­ta­tor” for his “mirac­u­lous” post-Soviet suc­cess.

Nazarbayev was first elect­ed pres­i­dent of the Kazakh Soviet Socialist Republic in 1990 and ruled over the coun­try until his res­ig­na­tion in March 2019 after protests forced him to rec­og­nize “a new gen­er­a­tion of lead­ers.”

Before his res­ig­na­tion, a 2018 report on Human Rights prac­tices in Kazakhstan from the U.S. Department of State claimed that the coun­try was liv­ing under human rights issues includ­ing “tor­ture; polit­i­cal pris­on­ers; cen­sor­ship; restric­tions on reli­gion; restric­tions on polit­i­cal par­tic­i­pa­tion; cor­rup­tion; and restric­tions on inde­pen­dent trade unions,” amongst oth­ers.

The BBC report­ed last year that Mr Nazarbayev is the only pres­i­dent inde­pen­dent Kazakhstan has known and many regard­ed him as “a pres­i­dent for life,” in what the BBC describes as a com­mon prac­tice for author­i­tar­i­an states in Central Asia. His offi­cial title is Chairman of the Security Council of Kazakhstan. He still holds an offi­cial title of Yelbasy–which trans­lates to nation­al leader

Grandson Nurali Aliyev was rumored to be a “poten­tial suc­ces­sor to his grand­fa­ther as pres­i­dent” by the ICIJ dur­ing their off­shore leak rev­e­la­tions.

How Unexplained Wealth Orders Became Law

Duncan Hames from Transparency International is one of the authors of the report that led to the ‘McMafia’ wealth orders.

He tells Forbes, that six years ago the NGO con­vened a group of experts and aca­d­e­mics to get to grips with why there was so lit­tle recov­ery of illic­it assets here in the U.K., pub­lish­ing a report that rec­om­mend­ed a new tool be made avail­able to law enforce­ment.

Transparency called the tool an Unexplained Wealth Order. And it was designed as an “inves­tiga­tive tool” to help the police “build their evi­dence base” and enable them to bet­ter pur­sue civ­il asset recov­ery under the pro­ceeds of crime act.

What start­ed as a report became law in the crim­i­nal finances act which received roy­al assent in April 2017 and intro­duced in January 2018. 

UK HAJIYEVA
Zamira Hajiyeva, wife of Jahangir Hajiyev, the for­mer head of the International Bank of Azerbaijan, … [+] © 2019 BLOOMBERG FINANCE LP

We are begin­ning to see some very real impact as a result of these pow­ers being made avail­able to the police,” Hames adds, “There’s lots of unex­plained wealth in London. We’ve iden­ti­fied £5 bil­lion worth of U.K. res­i­den­tial property–most of it in London–which is sus­pi­cious wealth. Either through what we know about the own­ers or the way in which the prop­er­ty has been bought, or the secre­cy havens that have been used to obscure the iden­ti­ty of the ben­e­fi­cia­ries.

There is a lot more to be done.”

In 2018 the U.K.’s first UWOs were grant­ed by the High Court against assets belong­ing to Zamira Hajiyeva and her hus­band Jahangir, who was already in prison in Azerbaijan for embez­zle­ment from the state owned bank of which he had been in a lead­er­ship posi­tion.

By means of expla­na­tion of these new devel­op­ments across the pond, The New York Times asked, “The extrav­a­gant spend­ing by the woman, Zamira Hajiyeva, at the lux­u­ry British depart­ment store Harrods—which amount­ed to around £16 mil­lion pounds, or more than $20 mil­lion … raised one big ques­tion: Where did all that mon­ey come from?”

Original source of arti­cle: FORBES
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David Dawkins

David Dawkins

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