In recent months, the news from the Westminster Magistrates’ Court has been a major topic of discussion on social media among Azerbaijanis and the free press. A new court ruling, which came into force on June 30, overturned a previous ban on the publication of the names of individuals long described simply as an “Azerbaijani couple” in the British press. For the first time, the names of the two Azerbaijani stars of this trial, which was carried out in complete secrecy for three years, were finally made public. What makes this court decision interesting for Azerbaijanis is not only the fact that the couple is Azerbaijani and that they own several multimillion-dollar luxury properties in the UK, but also the fact that these two people are close relatives of very influential people in Azerbaijan. Izzat Khanim Javadova, known as DJ Mikaela Jav on the famous Spanish resort island of Ibiza and in London clubs, is the daughter of academician Jalal Aliyev, making her President Ilham Aliyev’s cousin. Her husband Suleyman Javadov is the son of former Deputy Energy Minister Gulmammad Javadov.
According to investigations by Transparency International UK, real estate worth at least GBP 340 million has been purchased in Britain with dubious wealth from Azerbaijan. Since the entry into force of the new British Sanctions and Anti-Money Laundering Act in 2018, law enforcement agencies have launched only four large-scale investigations into foreign officials and their families suspected of illegally transferring ill-gotten wealth to Britain, and it is no accident that the Javadovs’ case is already the second involving Azerbaijanis. The first attempt by the British government to crack down on corrupt foreign officials and their families under the new anti-corruption legislation was the investigation into the wife of former International Bank of Azerbaijan chairman Jahangir Hajiyev, Zamira Hajiyeva.
Just five days after the verdict went into effect and the names were made public, the British press reported that the Javadovs, who had been in a legal battle with the investigating authorities for nearly three years, were able to enter into a deal on terms that could be considered advantageous to them, bring the trial to an end, and avoid all the charges against them. During the trial, law enforcement agencies claimed that they had solid evidence that the Javadovs had acquired their wealth through “corruption, looting or misappropriation.” To give the Javadovs a deal on the verge of gaining a conviction has raised legitimate questions in the media, as well as among legal experts and civil society.
The three-year investigation into the Javadovs and the subsequent trial were so secretive that they could be considered unusual even by British standards, and unlike in Zamira Hajiyeva’s case, many details of the Javadov case still remain unknown to the public. Nevertheless, some conclusions can be drawn about the unrevealed details of the Javadov case, as well as the possible reasons behind law enforcement authorities’ deal with the Javadovs, based on a comparative analysis with the Zamira Hajiyeva case, which was fairly open to the public, and on the relevant provisions of British law.
The Azerbaijani couple accused of illegally bringing millions into the UK
The known details of the Javadovs’ case suggest that both of them were the targets in a nearly three-year long investigation and trial by British law enforcement on suspicion of bringing dirty money (i.e. money from corruption or otherwise illegally acquired) into the UK. In that time, a comprehensive investigation was carried out into the suspicious wealth which the Javadovs had moved from Azerbaijan to the UK, court hearings were held, court decisions were made regarding the case, and millions which the Javadovs held in ten bank accounts at various banks were seized. However, unlike the other cases discussed below, not only the investigation but also the trial of the Javadovs was held in maximum secrecy for a long time, and for almost two years the subject has been kept secret even from the British press.
When the UK’s Evening Standard first learned about the existence of this investigation, law enforcement agencies had already completed the investigation into the “Azerbaijani couple” and brought the case to court, a number of court hearings had been held in complete secrecy, and the Javadovs’ accounts had even been seized. The Evening Standard published the first information about the Javadov case last year, after all the above-mentioned proceedings were over, and after a long and difficult battle in court. During the court battle, the newspaper was able to convince the judge that the details of the case should be made public on the principle that justice should be transparent. However, as a result of the serious efforts of the Javadovs and their lawyers, a complete reversal of the anonymity decision did not take place all at once. Initially, the court allowed the newspaper to see only court documents with the names edited out and to publish information about the proceedings only on condition that the names of the defendants would not be disclosed. For this reason, since last year, the media has been able to use only the terms “Azerbaijani couple” and “Mr. X and Mrs. Y” to describe the Javadovs. The Evening Standard, however, did not resign itself to hiding the defendants’ names from the public. The newspaper demanded full transparency in the matter, continued to fight in court, and finally, in June of this year, the judge allowed the names of the defendants to be made public.
As evidenced by information leaked to the press, British law enforcement agencies remained completely neutral in court for a long time in the fight against the secrecy of the case, and did nothing to support the newspaper’s appeals to the court for transparency. Only in May of this year, for the first time, law enforcement agencies changed their position and supported the newspaper’s appeals to eliminate anonymity. It was after this that Judge Vanessa Baraitser not only put an end to the Javadovs’ anonymity, but also opened to the public a hearing on the confiscation of the Javadovs’ property scheduled for 5 July, thereby giving the public unrestricted access to all court documents and the charges against the couple.
Apparently, in light of this aspect of the decision, the Javadovs, facing the threat of full disclosure of the official charges against them and the court documents, decided to make a deal with the investigating authorities, which they had resisted for about three years. Only 5 days after the court decision entered into force and the Javadovs’ names were published in the press — the day of the first public hearing (July 5, 2021) — they quickly agreed to the investigators’ terms and entered into a deal. Under the terms of the deal, the Javadovs agreed to let the National Crime Agency confiscate GBP 4 million of the GBP 6.4 million in their seized accounts, while the agency announced that the confiscated amount satisfied its claims against the couple and closed the investigation into the source of their remaining assets. One important consequence of the deal was that there would be no more litigation, and the remaining court materials would not be made public. It is also clear from the statement that the Javadovs’ lawyers made to the press after the deal that the non-disclosure of the court materials was a very important issue for them.
However, before all the details of the case were archived, it became clear from the documents which were released thanks to the Evening Standard that the National Crime Agency, which investigates this type of crime in the UK, had been accusing the Javadovs of accused of using offshore companies to move dirty money to the UK for several years, and then using that dirty money to buy five million pounds worth of luxury houses and apartments in London and Ibiza and to support an opulent lifestyle. The agency told the court that investigators had strong suspicions and evidence that the Javadovs had moved GBP 14 million (about AZN 33 million) to the UK and that the money had been obtained through “corruption, theft or embezzlement.”
How does the British government deal with people who buy property with dirty money?
Why did the UK suddenly begin to go after the dirty money of corrupt officials after so many years?
For nearly two decades, the British Isles have been a true paradise for corrupt politicians and officials who commit international financial crimes, especially illicit enrichment and money laundering. Over the past two decades, the country has been at the center of major international scandals. News stories came out one after another about political elites and their families who looted state property from developing countries and illegally moved it to Britain, buying very expensive properties and leading extremely luxurious lives.
Both in the UK and abroad, calls have intensified in recent years for the immediate elimination of legal loopholes which allow such crimes to be committed at increasing rates and complicate the fight against them. Although the so-called Proceeds of Crime Act 2002 was in force in the UK, it was not very effective in enabling the prosecution and punishment of money laundering mechanisms by state agencies. In these circumstances, under strong domestic and international pressure, Britain adopted a new law in 2017, the Criminal Finances Act 2017, and a new mechanism called Money Laundering Regulations 2017, which were significant innovations in the fight against corruption and money laundering.
According to these new rules, when Politically Exposed Persons (PEP) make financial transactions in the UK, the financial institutions which serve them, including banks, must conduct additional investigations and submit a Suspicious Activity Report to law enforcement.
According to the definition of a Politically Exposed Person in the new rules, this category includes, first of all, persons holding important public or state positions; heads of state and government, ministers, and deputy ministers; members of parliament; members of the governing bodies of political parties; supreme court and constitutional court judges; central bank board members; high-ranking military officers; leaders of state-owned companies; and family members or people with close personal or business relationships with anyone from the above categories. These types of individuals are considered to be at high risk of committing financial crimes such as corruption and money laundering using their position, power, and connections.
Izzat Khanim Javadova bought her first apartment in London (currently worth AZN 16 million) in 2005, when her father, Jalal Aliyev, was a member of the Political Council of the New Azerbaijan Party (YAP), a member of parliament, and a member of the Presidium of the Azerbaijan National Academy of Sciences. On the other hand, the father of Javadova’s husband, Suleyman Javadov, is also a deputy minister, which means that under the UK’s new anti-corruption and anti-money laundering rules, both are considered politically exposed. This means that all the banks and financial institutions that served them in Britain, from the moment these rules came into force, recognized the Javadovs as politically exposed and had to conduct additional investigations to provide certain information to law enforcement agencies. However, according to the information provided to the court by the National Crime Agency, the Javadovs were able to evade the required inquiries by providing false information to financial institutions. For example, Suleyman Javadov, when opening an account at the British bank Coutts, provided false information to bank officials, stating that he “was not related to the Deputy Minister of Energy [of Azerbaijan], and that he was simply a namesake,” and he was able to evade the required inquiries. This prevented the bank from providing timely information to law enforcement agencies about the suspicious activities of the Javadovs.
Other legal aspects of the case
The Criminal Finances Act 2017, which came into force on January 31, 2018, has made significant innovations in the fight against corruption and money laundering. Perhaps the most important of these innovations is the so-called Unexplained Wealth Order (“UWO”), a legal mechanism introduced by the British government as a very powerful investigative tool in the fight against criminally acquired wealth.
Significantly, the main target of the new rules for Politically Exposed Persons and of the new Unexplained Wealth Order legal mechanism is foreign officials and their families and relatives (all of them) who transfer corrupt money to Britain (they all fall into the category of PEP).
A UWO issued by the courts is not only a binding judicial act, but also an investigative tool. An order is issued by the courts at the request of the investigating authorities during the investigation. If an investigative agency looking into money laundering discovers any property or properties in the UK belonging to a PEP in the amount of more than GBP 50,000 and the investigators have doubts as to whether the property was acquired with lawful, i.e. official, earnings, then the investigating authorities begin to gather initial data and evidence regarding the legal earnings of the property owner. (It should be noted that GBP 50,000 is the minimum required by law, but in practice the only court orders to date have been for multi-million-pound luxury properties). If, on the basis of the evidence gathered, there are reasonable suspicions that there is a serious discrepancy between the person’s legal income and the total value of the property they own (in other words, the person’s legal sources of income are insufficient to acquire the property), the investigating authority appeals to the court to issue a court order, i.e. a UWO, and at the same time to temporarily seize the person’s property and bank accounts. If the court finds the evidence presented by the investigating authorities to be substantiated, it issues a UWO, which is binding on the defendant to provide a valid account of the source of their wealth.
The defendant has the right to demand that this order be revoked by a higher court. However, if the order is not revoked, the defendant shall be obliged to disclose the source of their wealth at the time and in the form specified by the judge in the order. If the defendant fails to comply with the court order without good reason or fails to substantiate the source of the wealth in the required form and in a satisfactory manner, the property shall be deemed to have been acquired illegally and the investigating authority shall initiate the appropriate legal proceedings to confiscate the property.
Two important points should be underlined here. First, a court-issued UWO against any person is not evidence that the defendant has committed any offense or that he or she is guilty of any crime, and this order cannot be used as evidence in itself of guilt. As mentioned above, a UWO is simply an investigative tool and is issued to facilitate the work of the investigative bodies, to prevent an investigation from stalling. Second, when the investigating authorities bring a case against a PEP in court, the burden of proof does not fall on the investigating authorities as in criminal cases, i.e. the prosecutor is not obliged to prove in court that the person’s actions contain any criminal elements. In these cases, the burden of proof is borne by the defendant. In other words, the investigating authority must simply provide the court with information and evidence of the person’s known sources of legitimate income and demonstrate that it is not possible to obtain the property in question through these legitimate sources of income. It is enough for the court to issue a UWO to force the politically exposed foreigner to disclose the source of their wealth. If the person fails to explain to the court the reason for their suspicious enrichment within the prescribed period, the court immediately considers the person’s property to be illegally acquired without the need for the investigating authorities to prove any crime, opening the door for the confiscation of the property.
The choice of such a different approach to cases against foreign politically exposed persons, i.e. the transfer of the entire burden of proof onto the defendant, greatly simplifies the work of the investigative bodies, but it was also motivated by the fact that, as in the case of Javadovs, politically exposed persons accused of corruption typically have very strong family, personal, or business ties with the political regimes in their countries. In such cases, the prospects of the British investigating authorities obtaining the necessary information from state agencies in those countries, or cooperating with them in any way, are very uncertain, and as a result an investigation can easily stall. Therefore, UWOs, which place the burden of proof on the defendant, are indeed a very effective legal tool at the disposal of the investigating authorities.
The investigators’ first target: Zamira Hajiyeva
There were many questions in British political circles as to whether the UWOs, which would be enforced for the first time after the new legislation came into effect, would be effective as a mechanism. It was assumed that the mechanism would fail, and that Politically Exposed Persons would hire the most expensive and well-known lawyers who would overcome it in the first cases. In this regard, both internal political pressure from the government and public expectations had a great impact on the British investigative agencies which would begin to use the new legal instrument. In short, everyone was interested in the question, “Who will they try to bring the first UWO against?”
Thus, shortly after the abovementioned new law (Criminal Finances Act 2017) came into force on January 31, 2018, the investigating authorities decided to try their luck and attempt to get their first UWO. For this purpose, in February 2018, they appealed to a British court. Interestingly, in the UK the court’s first UWO was related to dirty money from Azerbaijan. It involved the former chairman of the International Bank of Azerbaijan Jahangir Hajiyev’s wife, Zamira Hajiyeva, who leads a luxurious life in London (Jahangir Hajiyev himself was sentenced by the Baku Court of Grave Crimes to 16 years and 6 months in prison on charges of embezzlement, fraud, and abuse of office). The court’s first UWO required Zamira Hajiyeva to provide a valid account of the source of the money she used to buy a 5-room apartment in one of London’s most expensive areas for GBP 11.5 million (at today’s market price of GBP 15 million, or about AZN 35 million) and Mill Ride Golf Club near London, which she bought for GBP 10.5 million (approximately AZN 25 million).
The reason why the British investigators requested their first court-issued UWO for Zamira Hajiyeva’s case specifically was not only because she bought very expensive property in London or owned a private Gulfstream G550 jet worth USD 42 million. Perhaps the main reason for choosing her as the first target was Hajiyeva’s extravagant lifestyle in London:
• In 2006–2016, Zamira Hajiyeva spent a total of GBP 16.3 million (about AZN 38 million at today’s exchange rate) in central London at Harrods, one of the world’s most famous shopping malls. To spend this amount over 10 years, you would have to make a purchase of at least AZN 10,000 every day for 3,650 days.
Hajiyeva used a total of 54 different credit cards to make these purchases, including 35 cards from the bank run by her husband. In addition to the GBP 11.5 million apartment she bought just 100 meters from Harrods to make shopping easier, Zamira Hajiyeva also bought two private parking spaces in the mall’s private parking lot. The price of the spaces has not been revealed, but they are a luxury which very few rich people can afford.
After the details of the 107 pages of shopping receipts submitted to the court were leaked to the press, the British public considered this opulent lifestyle excessive, even by the standards of the very wealthy.
The total amount of purchases of famous brands made by Zamira Hajiyeva at Harrods
Source: The Guardian, “Court releases £16m Harrods shopping list in ‘McMafia’ case”, May 28, 2019.
Apparently it was for this reason that the investigators chose Hajiyeva as the first target, thinking that it would be very easy to prove to the court the incredible disparity between her ultra-luxurious lifestyle and her legal income. For the first attempt, investigators chose a strategy of not taking risks, starting with the easiest of the approximately 140 investigations they were working on, to start off on the right foot as they say. Moreover, the fact that Zamira Hajiyeva’s husband, Jahangir Hajiyev, the only source of her wealth, was convicted by Azerbaijani courts in 2016 of crimes involving corruption and money laundering (embezzlement, fraud, and abuse of office) would also play into the hands of British investigators.
Everything turned out as they thought it would, and the investigating authorities who filed the lawsuit in February 2018 were easily able to convince the judge that the former official head of the state bank in Azerbaijan could not possibly have achieved such an unimaginably luxurious standard of living with the official and legal income earned during his tenure. The court ruled that the Hajiyevs’ two properties, valued at GBP 22 million, were unexplained wealth and issued a UWO. At the same time, both properties were seized. Not content with this, the National Crime Agency also seized through the courts jewelry worth more than AZN 1 million which Hajiyeva’s daughter, Leyla Mahmudova, was trying to sell at the world-famous Christie’s auction house. According to investigators, Mahmudova tried to sell the jewelry after her mother lost her first appeal in court. Only a few months later, investigators were also able to seize a diamond ring worth about AZN 3 million, which Mahmudova had taken to a Cartier jewelry shop for repairs.
Hajiyeva hired one of the UK’s best-known lawyers, James Lewis QC (he is also a lawyer for the Javadovs), and he argued that his client had been illegally targeted by the National Crime Agency. He appealed to the High Court, and then to the Appellate and Supreme Courts. Their appeals, however, were rejected by the judges at each level, and in December 2020, the Supreme Court rejected the appeal without considering it at all on the grounds that it was unfounded. Thus, Hajiyeva must obey the court’s initial order, as she has exhausted all possible opportunities to appeal that decision (February 2018), i.e. she must provide in court a valid account of the source of the GBP 22 million she used to buy the two seized properties. If she does not obey the order or does not present satisfactory evidence to the court, Hajiyeva may both lose her property and be imprisoned for 2 years for disobeying the court order. The Supreme Court’s final decision coincided with the holiday season and the pandemic, and although Hajiyeva was expected to submit the required explanations to the court in the first months of 2021, she has not yet done so and there has been no word from British investigators as to the reasons for the delay.
The recent decision of the Supreme Court (i.e. to uphold the UWO of February 2018) was of great importance to the British investigative authorities in terms of strengthening this newly introduced mechanism and putting it in its rightful place in the legal system. This victory also showed that it was the right decision for the investigating authorities to select the Hajiyevs as their first target.
It should be noted that while the litigation between the investigators and Zamira Hajiyeva’s lawyers as to the legality of the UWO continued, the Azerbaijani government also took the opportunity to make serious but unsuccessful attempts to extradite Hajiyeva. On October 30, 2018, Hajiyeva was arrested by the London police at the request of the Azerbaijani government, but despite all of the Azerbaijani government’s efforts, it was unable to have Hajiyeva detained for the duration of the extradition hearings. The judge allowed Hajiyeva to be released on bail. At the end of the trial, which lasted about a year (September 2019), the Azerbaijani government’s extradition request was rejected and Hajiyeva was not sent to Azerbaijan for trial. In the final decision in the case, the judge stated that there was sufficient evidence that Zamira Hajiyeva had dealt with and conspired with other individuals accused of fraud and money laundering, but that Hajiyeva could not be sent to Azerbaijan for trial because in Azerbaijan the courts are not independent and lawyers face pressure and punishment from the government. This could mean a violation of her right to a fair trial. Although lawyers representing the Azerbaijani government initially said they would appeal the court’s decision, they apparently abandoned the idea, fearing that the deplorable state of Azerbaijan’s courts and justice system would be brought up again, and the issue of extraditing Hajiyeva was dropped from the government’s agenda.
How was GBP 4 million confiscated from the Javadovs?
The leaked court documents show that, when transferring presumably dirty money from Azerbaijan to the UK, the Javadovs used dozens of forged, non-transparent transactions through 21 fictitious companies of unknown ownership in order to conceal the source of the money and complicate future investigations. Moreover, although the Javadovs claim that the main source of this wealth is allegedly legal income from property rents in Azerbaijan, court documents show that the total amount of money in the couple’s bank accounts was at least twice the total rental income they had previously declared to investigators. These facts are very credible evidence supporting the accusations made by prosecutors that the money was obtained from illegal sources and that the couple was in fact involved in laundering it.
Interestingly, during the investigation, when prosecutors asked the defendants to provide information about both the source of their money and the 21 companies that transferred it to them, the Javadovs were able to provide documents about the money transferred by only two of the 21 companies. They could not provide any information regarding the other 19 companies or the money they transferred. However, it is clear from the information provided to the court by the investigators that even the documents and explanations provided by the Javadovs about the two companies and their transfers were inaccurate and could not be considered entirely reliable evidence. Thus, in the 250 different lease and management agreements submitted by the Javadovs, on the one hand, many discrepancies and contradictions were revealed between the dates of the agreements and the dates of transfers; on the other hand, the court was unable to obtain any reasonable explanation as to why real estate in Azerbaijan belonging to the Javadovs was managed by suspicious companies totally unfamiliar to them, registered in Scotland, Ireland, or the Seychelles and with bank accounts in Estonia or Latvia. In addition, six of the 21 companies, none of which are based in Azerbaijan, were once active participants in a transnational money transfer network known as the Azerbaijani Laundromat, which has been accused of international money laundering and caused a major scandal. The agency told the court that all this suggests that the Javadovs, in fact, “knew that what they were receiving did not come from their tenants but from an unlawful intermediary organisation designed to launder money.”
As noted earlier, the Javadovs’ case and the trials were conducted in such a degree of secrecy that they could be considered unusual even by British standards. For this reason, in the Javadov case it is impossible to obtain the kind of detailed information and court documents as in the case of Zamira Hajiyeva or in other similar cases conducted by the Agency in recent years. It was expected that the details and court materials would be made public after the hearing scheduled for July 5, 2021, which was prevented by the Javadovs’ rushed deal with investigators.
Now it is impossible to answer such questions as, “Were the UWOs applied by investigators in the case of Zamira Hajiyeva also used in the Javadov case, and if so, how did this process proceed?” or, “Did the Javadovs appeal those decisions, and if so, what were the results of their appeals?” However, taking into account the abovementioned details of Zamira Hajiyeva’s case and conducting a comparative analysis, it is possible to draw the following conclusions about the unknown aspects of the Javadovs’ case:
The National Crime Agency, which initially investigated the case, put out a press release regarding the July 5, 2021 deal saying that if the deal had failed, “a forfeiture hearing to recover the money was due to start.” In other words, in the hearings that were set to begin on July 5, the court was planning to consider the confiscation of all GBP 6.4 million of Javadov’s seized funds. It is clear that it is not just a matter of completing the preliminary investigation into the Javadov case and submitting it to the court. As a rule, a preliminary investigation must be conducted before confiscation hearings can begin; on the basis of the materials collected as a result of that investigation, a binding UWO must be obtained from the court and the property of the defendants must be seized; if the defendant fails to comply with the binding UWO within the prescribed period or fails to provide the court with a satisfactory justification, the court shall consider their seized property illegally acquired and only then shall the investigating authority be allowed to apply to the court for confiscation.
According to the information obtained in the Javadov case, at the beginning (in 2018) the British prosecutors who were investigating went to court with charges based on very strong evidence. Thanks to this strong evidence, in 2018-2019 prosecutors were able to seize GBP 6.4 million (about AZN 15 million) in 10 bank accounts belonging to the Javadovs. The seizure of their accounts shows that the National Crime Agency filed a lawsuit the first time in 2018 to force the Javadovs to explain the source of this income. The court received a UWO against the Javadovs, and then the accounts were seized. Moreover, the seizure of the first of the accounts in 2018 shows that the investigating authorities received the UWO against the Javadovs only a few months after the case of Zamira Hajiyeva. The length of the trial (about the same as in the case of Zamira Hajiyeva) shows that in the Javadov case, the same defense strategy was chosen as in the Hajiyeva case, i.e. the decisions were appealed to the higher courts, but failed. The fact that both the Javadovs and Hajiyeva were defended by the same lawyer (James Lewis QC) reinforces this probability.
It follows from the above that in the case of the Javadovs, the investigative bodies have moved to a more advanced stage than in the case of Zamira Hajiyeva. In the case of Zamira Hajiyeva, although it is not known whether the defendant complied with the Unexplained Wealth Order (UWO), what substantiating evidence she submitted to the court about the sources of her income, and whether the court was satisfied with this reasoning, at least we know that no known court hearing has been held on the confiscation of Zamira Hajiyeva’s property. The fact that hearings regarding the confiscation of the Javadovs’ property (the money in their accounts) had already begun means that either the Javadovs did not comply with the Unexplained Wealth Order in their case, or that, finding the justifications submitted unsatisfactory, the court determined that the money in their accounts was obtained illegally and allowed investigators to apply to the court to confiscate the property.
Some of the above details of the case, in particular the fact that the Javadovs submitted lease agreements and other documents to the investigating authorities to substantiate the legality of their income, and that the Agency found discrepancies and inconsistencies in these agreements, suggest that the Javadovs complied with the UWO and tried to substantiate the source of their wealth, but their explanations and documents were not considered satisfactory, which is why the Agency appealed to the court to confiscate their property. Moreover, the statement issued by the National Crime Agency on the day of the deal repeatedly asserts that the Javadovs’ frozen GBP 6.4 million was “transferred via the Azerbaijan Laundromat money laundering scheme,” which shows that this has already been proven.
Investigative bodies had very strong evidence against the Javadovs, so why accept a deal?
Investigators accused the Javadovs of moving a total of GBP 14 million of illegal money into London and were able to freeze the couple’s accounts. Overall they were able to build a very strong case against the Javadovs, so why did they close it midway? Is it enough that they confiscated only 4 million out of 14 million? Such a conclusion to the trial rightly raises many questions.
Despite the fact that the first unexplained wealth case (the Hajiyevs) was decided as investigators had hoped it would be, Zamira Hajiyeva’s lawyers were able to prolong the process considerably (from February 2018 when the initial court order was issued to the present). As can be seen from the above assumptions, in the Javadovs’ case their lawyers challenged the legality of the UWO in higher courts, but although they could not overturn the decision, they managed to prolong the process for several years, as in the Hajiyevs’ case. While years of litigation in several courts are not a serious inconvenience to corrupt foreign officials and their families using the services of Britain’s most prominent and expensive lawyers, they have resulted in very serious costs for law enforcement agencies such as the state-funded National Crime Agency and have led to the loss of jobs.
Agency officials said in a statement that they were content to confiscate only part of the seized funds, adding that the agency made this decision after taking into account that it would be a very long and expensive process to continue the litigation to pursue the rest of the funds, and assessing all the risks and costs involved.
However, it is safe to assume that there are very serious political and economic reasons for the Agency to compromise. For example, last year the agency tried to force former Kazakh President Nursultan Nazarbayev’s daughter, Dariga Nazarbayeva, and grandson, Nurali Aliyev, to disclose the source of their USD 110 million property in London in court, but failed spectacularly. This failure put the agency back politically, psychologically and financially. Although the agency tried to obtain three Unexplained Wealth Orders (UWO) against Nazarbayev’s daughter and granddaughter at the same time, the judge rejected the agency’s request, ruling that it was not sufficiently substantiated. When the agency’s subsequent appeal was also rejected, the opposing party’s lawyers took immediate action and filed a countersuit against the agency for about GBP 1.5 million (USD 3.5 million) in defense costs, one-third of which (GBP 500,000) the agency was instructed to pay immediately.
Considering that the annual budget of the National Crime Agency’s International Corruption Unit for 2018–2019 is only GBP 4.32 million, we can assume that the agency’s self-confidence and ability to take risks have been severely shaken after such a large fine. In addition to undermining the agency’s financial resources, the fine likely increased pressure on the agency within the government. Taxpayers are justifiably dissatisfied with the fact that about 40% of the agency’s annual budget for international corruption cases has been squandered in just one case, in the fight against the family of a foreign dictator.
Taking all this into account, in the Javadov case the agency was probably looking for a quick win.
Who is the real winner — the National Crime Agency or the Javadovs?
A spokesman for the agency, Jonathan Hall, said on the day the deal was announced that the four confiscated accounts, as well as the assets that the Javadovs would retain, had in fact been transferred to London through fictitious companies involved in the Azerbaijani Laundromat, and that their sole purpose in using such companies was to hide the source of the money. Following the deal, Javadov’s lawyer confirmed in a statement that his clients admitted that the money to be confiscated from the four accounts came through the Laundromat network, although they did not admit to any wrongdoing or guilt in any crime. Andy Lewis, a spokesman for the agency, said the deal, which would bring GBP 4 million for state coffers after a two-year investigation, was a significant success for the UK. He also warned that no one who has used the Azerbaijani Laundromat should be relieved, as their properties in the UK could also be potentially taken away.
Although British law enforcement officials make some good points, we cannot entirely accept their presentation of this result as a success. The Javadovs lost the first and most important stage of the nearly three-year investigation and intense litigation. In the coming weeks, they faced the prospect of the confiscation of the GBP 6.4 million in their bank accounts. However, this did not happen thanks to the deal they reached with the agency on the day of the trial; they lost only part of the amount in their accounts and managed to resolve the issue for themselves once and for all. The case lasted for three years and there was plenty of solid, serious evidence against them, but the Javadovs came out of it innocent, without any official proof of their involvement in any lawlessness or crime. Most importantly, they received a written guarantee from British law enforcement that they would not be investigated in Britain in the future with regard to their remaining funds.
If we consider the fact that the Javadovs paid about a third of the money they illegally moved from Azerbaijan to London as a tax to avoid responsibility and any future persecution, then the resolution of the issue by paying about a 29% tax on these illegal assets to the British government looks primarily like the Javadovs’ victory. Such a conclusion to the investigation may be a promising precedent for those who have hidden or will try to hide their corrupt wealth in Britain.
There is another very important question that remains open. The National Crime Agency, which received GBP 4 million from the Javadovs on the day of the trial, said in its initial appeal to the court that they had reasonable suspicions that the funds had been obtained through “corruption, theft or embezzlement” in Azerbaijan. Under the terms of the UN Convention against Corruption, the proceeds of corruption must be returned to the country of origin, wherever they are found. However, it is clear from the agreement reached between the parties in this case that, while British law enforcement agencies had serious grounds to believe that the funds were obtained through corruption and embezzlement, they were content to simply receive confirmation that the funds came through the Laundromat network in exchange for the confiscation of a part of the funds, completely abandoning their initial allegations that the funds were obtained through corruption. In other words, the British government will not argue that the funds are corrupt even though it can prove it, thereby thwarting the establishment of any legal basis for the return of these funds to Azerbaijan. Instead of discussing ways to return the proceeds of “corruption, theft or embezzlement” to their country of origin, the conclusion of this case is very disappointing for the people of countries suffering from corruption, with British officials presenting the deal in a statement as “a significant success for the UK – £4m for the public purse.”
In this sense, there is some truth in the words of those who say on social media that the UK has found a very easy way to make money. In the past, instead of preventing the inflow of corrupt money from abroad, people like Zamira Hajiyeva were issued simplified investor visas and, as a result, corrupt money was allowed into the country on a very large scale. Today, confiscating the dirty money (or some of it) brought to the UK by these people and transferring it to the British budget is a great injustice against the peoples whose money was stolen. As can be seen from the abovementioned court cases, Britain comes out of every case looking like the winner, regardless of the outcome — on the one hand, dirty money in the billions enters the country to be invested in the real estate market or deposited in bank accounts and spent on opulent lifestyles, and on the other hand, from time to time as a result of court cases like these, part of these assets are confiscated and transferred to the British state.
In conclusion, although there are many people in British civil society who criticize this policy and demand that the money confiscated should be returned to the countries of origin which are victims of corruption, Azerbaijani civil society does not pay enough attention to this issue. There are serious prospects for the return of dirty money which has been moved from various countries to the UK and other developed countries, and there are already many positive examples and experiences. As the successful experiences of other countries show, in the matter of returning dirty money to its country of origin, the civil society of that country carries great responsibility. In other words, the situation is not completely hopeless.