New anti-corruption powers aim at foreign buyers of London’s posh homes

SUSPECTING THAT a fancy London pad was acquired with stolen money is one thing, proving it another. British crime-busters have long struggled to join the dots to courts’ satisfaction. So last year the country introduced Unexplained Wealth Orders (UWOs), which shift the burden of proof. These can be issued when there is a gap between the value of an asset and the legitimate income of the apparent owner—for instance a foreign official on a modest state salary or one of his relatives. The property can be frozen while police investigate, and seized if suspects subsequently fail to explain the source of their wealth.

It emerged this week that three London homes have been frozen by the High Court, in the second use of such orders by the National Crime Agency (NCA). The properties, worth £80m ($101m) when purchased a decade ago, are held by offshore companies. The owner has not been named but is a “politically exposed person”—a politician, state official or someone linked to them.

The first batch of UWOs were aimed at £22m-worth of property, including a house (see photo) in London’s Knightsbridge neighbourhood, belonging to Zamira Hajiyeva, the wife of a jailed Azeri banker. This week details of £16m she spent in the Harrods store over a decade (using 54 credit cards) were laid bare. They included £3.5m on Boucheron jewellery, £160,000 at the perfume counters and £332,000 on Tom Dixon’s furniture and café offerings (mostly the former, presumably). Mrs Hajiyeva denies wrongdoing and is appealing against the possible loss of her homes.

The government touts UWOs as evidence that it is taking on foreigners who launder ill-gotten gains through property purchases, often hiding behind shell companies. A public register of the owners of offshore firms that hold British property is in the works. (In 2016 Britain became the first G20 country to launch an open register of domestic firms’ owners.)

But many more such orders would be needed to reach beyond the tip of the money-laundering iceberg. Transparency International has identified 150 British properties worth £4.4bn bought with iffy wealth, and that is just the “low-hanging fruit”, says the anti-corruption group. The NCA complains of being underfunded, and resources have been diverted from white-collar cases to areas with more visible victims, such as knife crime. Ministers trumpet a new National Economic Crime Centre, attached to the NCA. “Deckchairs rearranged, with little new money,” scoffs a former senior prosecutor. UWOs are a useful tool, but Britain will also need to invest more in investigations if it is serious about driving out corrupt capital.