Archive for February 3rd, 2018

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New UK legislation makes it a more problematic destination for Ukrainian “dirty cash”?

February 3, 2018

As a UK citizen committed to being an EU citizen, the continuing folly of the UK (and clearly inept EU exit) from the EU by the UK is nothing short of watching a slow moving car crash.

Indeed, your author is seriously considering relocating (either full or part time) to an EU nation and registering there before existing rights become – well something else unknown.  Thus any erudite readers looking for a researcher willing to work all waking hours in return for a salary sufficient to cover the cost of living and retention of existing EU citizen rights, do email the blog.

However, Brexit fatuity aside, the UK will continue to have (some, probably diminished) influence with regard to Ukraine – both internally and externally.

Somewhat unbelievably, there appears to have been few, if any, convictions of Ukrainians in relation to the UK Bribery Act 2010.  It is an act that has a very broad scope, relating to UK citizens, UK entities, and those interacting nefariously for illicit advantage with them anywhere on the planet.  Perhaps the clearest and most public (albeit thinly veiled) threat rightly coming in relation to the nefarious Roman Nasirov.

Nevertheless, the beginning of 2018 witness the Criminal Finances Act 2017 come into effect.

With effect from 31st January 2018, per Chapter 1 of the CFA 2017, the “Unexplained Wealth Orders” came into force across England & Wales.  Aside from serious organised criminality, the UWO applied specifically to PEPs (Politically Exposed Persons) and those directly associated with them.

Of particular note “A UWO can also be applied to politicians or officials from outside the European Economic Area (EEA), or those associated with them i.e. Politically Exposed Persons (PEPs). A UWO made in relation to a non-EEA PEP would not require suspicion of serious criminality.”

In short, any Ukrainian politician or civil servant, immediate family member or direct employee thereof, do not require to be suspected of serious criminality to be subjected to a UWO – they need simply to have assets that fly in the face of any legitimate income.

It seems unlikely that the smoke and mirrors of offshore ownership can easily prevent an UWO activation, and release of assets will require the ultimate beneficiary to prove that the asset if lawfully owned and how it was acquired.

Corruption and associated money laundering are, of course, a real national security threat to the Ukrainian nation, and an issue where much more has to be done.  The UK is not only a hub but an end destination for illicitly acquired Ukrainian wealth (as is Austria and others).

Ergo, considering the (almost) absent convictions of Ukrainians under the UK Bribery Act 2010 despite Ukrainians undoubtedly being involved in bribery or attempted bribery of UK citizens, there are obvious questions raised by the cynical reader regarding just how effective the Criminal Finances Act and associated Unexplained Wealth Orders will be with regard to both Ukrainian organised criminality as well as Ukrainian PEPs.

Perhaps it will be more effective due to the low barrier for qualification “insufficient legitimate income for the purposes of enabling the individual to obtain specific identified property (of a value over £50,000), which can be shown to be in their possession“, in combination with an apparent ability for the UK to retain (read a potential to return all or part thereof) proceeds eventually confiscated by judicial decision.

Thus there is perhaps a perverse potential outcome that the UK having willingly accepted “dirty” Ukrainian cash and asset purchases for decades, indeed by tacitly turning a blind eye arguably encouraging it, the ability to now seize and ultimately take possession of that cash and assets to the benefit of the UK treasury (in full or in part) will be the outcome.

A reader is left to ponder whether and when any Ukrainian PEPs will fall foul of this new legislation.  No doubt many fulfill the criteria.

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