“245A Application for property freezing order (1) Where the enforcement authority may take proceedings for a recovery order in the High Court, the authority may apply to the court for a property freezing order (whether before or after starting the proceedings). (2) A property freezing order is an order that— (a) specifies or describes the property to which it applies, and (b) subject to any exclusions (see section 245C(1)(b) and (2)), prohibits any person to whose property the order applies from in any way dealing with the property. (3) An application for a property freezing order may be made without notice if the circumstances are such that notice of the application would prejudice any right of the enforcement authority to obtain a recovery order in respect of any property. (4) The court may make a property freezing order on an application if it is satisfied that the condition in subsection (5) is met and, where applicable, that the condition in subsection (6) is met. (5) The first condition is that there is a good arguable case— (a) that the property to which the application for the order relates is or includes recoverable property, and (b) that, if any of it is not recoverable property, it is associated property. (6) The second condition is that, if— (a) the property to which the application for the order relates includes property alleged to be associated property, and (b) the enforcement authority has not established the identity of the person who holds it, the authority has taken all reasonable steps to do so.”
“(1) Property obtained through unlawful conduct is recoverable property. (2) But if property obtained through unlawful conduct has been disposed of (since it was so obtained), it is recoverable property only if it is held by a person into whose hands it may be followed. (3) Recoverable property obtained through unlawful conduct may be followed into the hands of a person obtaining it on a disposal by— (a) the person who through the conduct obtained the property, or (b) a person into whose hands it may (by virtue of this subsection) be followed.”
“(1) Conduct occurring in any part of the United Kingdom is unlawful conduct if it is unlawful under the criminal law of that part. (2) Conduct which— (a) occurs in a country or territory outside the United Kingdom and is unlawful under the criminal law applying in that country or territory, and (b) if it occurred in a part of the United Kingdom, would be unlawful under the criminal law of that part, is also unlawful conduct.”
“(1) A person obtains property through unlawful conduct (whether his own conduct or another’s) if he obtains property by or in return for the conduct. (2) In deciding whether any property was obtained through unlawful conduct— (a) it is immaterial whether or not any money, goods or services were provided in order to put the person in question in a position to carry out the conduct, (b) it is not necessary to show that the conduct was of a particular kind if it is shown that the property was obtained through conduct of one of a number of kinds, each of which would have been unlawful conduct.”
“(1) If— (a) a person disposes of recoverable property, and (b) the person who obtains it on the disposal does so in good faith, for value and without notice that it was recoverable property, the property may not be followed into that person’s hands and, accordingly, it ceases to be recoverable.”
“[3] The right to recover property does not depend on the commission of unlawful conduct by the current holder. All that is required is that the property itself be tainted because it, or other property which it represents, was obtained by unlawful conduct. Since property might be recoverable from someone who is entirely innocent of wrongdoing, the NCA is required to establish clearly that the property in question was obtained by unlawful conduct. It is unnecessary for the NCA to prove the commission of any specified criminal offence, in the sense of proving that a particular person committed a particular offence on a particular occasion. However it is necessary for it to prove that specific property was obtained by or in return for a criminal offence of an identifiable kind or in return for one or other of a number of offences of an identifiable kind: Director of the Assets Recovery Agency v Szepietowski[2007] EWCA (Civ) 766 , [2008] Lloyd's Rep FC 10, per Moore-Bick LJ at [106]–[107].”
“global approach to the issue of proof that the property in issue is recoverable within the meaning of the Act. … I do not consider it essential that the court considers each property transaction on an item by item basis in the sense that the Claimant has an obligation to show some particular unlawful actions by the Respondent at some particular time which enabled the particular transaction.”
"34. In order to demonstrate that property derives from crime for the purposes of proving money laundering it is legitimate to rely upon inferences drawn from the way in which the money was handled. 35. In ARA v Olupitan[2007] EWHC 162 (QB) Langley J summarized the position as follows [at paragraphs 65- 66]: '65 A substantive offence of money laundering can be proved by inference from the way in which cash is dealt with and it is not necessary to prove the underlying offence which generated the cash: R v El Kurd [2001] Crim. L.R. 234; and R v L,G,Q and M[2004] EWCA Crim 1579 . As Mr Eadie submitted, if money is handled in a manner consistent only with money laundering, "the inference is that it must be criminal property because no one launders clean money"
'118 I also consider that the court is entitled to take a commonsense approach to the inferences to be drawn from the manner in which the Respondent chose to store his accumulated cash and from the failure of the respondent to keep any business records in the context of the evidence as a whole. 119 Equally, as the Receiver said in evidence, one would expect any successful law abiding businessman to keep some sort of record no matter how simple, of what he was buying, what he was selling and the amounts of his overheads – if only to work out the sort of profit he was making and which were his most profitable items. The criminal dealer in, for example, illicit drugs will of course eschew any record by which his activities might be detectable. 37. This approach was endorsed by Griffith Williams J in Gale [at paragraph 17]: '17 I respectfully agree with and adopt the above cited observations of Sullivan J, Langley J and King J and if support is needed it is to be found in the decision of the Court of Appeal, Criminal Division in R–v- Anwoir & Others[2008] 2 Cr App R 36 at para 21 at page 539 that there are two ways in which the Crown can prove in money laundering offences that property was derived from crime - either by proving it derived from unlawful conduct of a specific kind or kinds or by evidence of the circumstances in which the property was handled, such as to give rise to the irresistible inference that it could only have been derived from crime (although in criminal proceedings the higher standard of proof is required).'" [48] Whether an adverse inference is appropriate will inevitably depend on the detailed circumstances of each individual case. But, in an appropriate case, it is clear that such an inference can properly be drawn from a failure to provide an explanation of apparently suspicious dealings and that doing so does not involve an inadvertent reversal of the burden of proof, which remains on SOCA throughout: see also Olupitan v. Director of the Assets Recovery Agency in the Court of Appeal[2008] EWCA Civ 104 at [30] and [31]. [49] Putting this in crude terms, and not forgetting SOCA's burden of proof, if a transaction looks like money laundering and has not been satisfactorily explained by a defendant who ought to be in a position to explain it if there is an innocent explanation, that is probably what it is.” "34. In order to demonstrate that property derives from crime for the purposes of proving money laundering it is legitimate to rely upon inferences drawn from the way in which the money was handled. '65 A substantive offence of money laundering can be proved by inference from the way in which cash is dealt with and it is not necessary to prove the underlying offence which generated the cash: R v El Kurd [2001] Crim. L.R. 234; and R v L,G,Q and M[2004] EWCA Crim 1579 . As Mr Eadie submitted, if money is handled in a manner consistent only with money laundering, "the inference is that it must be criminal property because no one launders clean money". Mr Krolick submitted that it was a condition precedent to any allegation of money laundering that the property should be the proceeds of a criminal offence. He referred to the decision of the House of Lords in R v Montila[2005] 1 Cr App R 26 . But what is required in law to establish money laundering and how that may be proved raise different issues. El Kurd was cited in Montila and referred to in the Opinion of the Committee with apparent approval and certainly without adverse comment on the question material to this case. 66 In this case, the evidence is, as the Director alleges, that around£195,000 cash (and£24,000 in unidentified credits) were credited to the accounts of Olupitan and Makinde in a period of some five and a half years. They remain unexplained and without any supporting documentation. Such explanations as have been offered have been rejected as untruthful. I accept Mr Eadie's submission that in the circumstances of this case as I find them to be it is a proper inference that money laundering has occurred.'
“[18] I must now deal with the application to discharge the PFO. This was argued by Mr Ganesan. He relied essentially on two grounds. First, he submitted that in order to justify the making of a PFO it is necessary for the NCA to establish a risk of dissipation of any asset to be included in the order. Section 245A of POCA does not include the need to show a risk of dissipation. It requires that there be a good arguable case that the order relates to or includes recoverable or associated property (s.245A(5)). Section 245A(3) provides:- "An application for a [PFO] may be made without notice if the circumstances are such that notice of the application would prejudice any right of the enforcement authority to obtain a recovery order in respect of any property". Reliance is placed on observations of Edis J in NCA v. Simkus where he said that s.245A(3) would usually mean that there was a risk of dissipation of the assets if notice of the application were given. [19] In my view, a judge asked to grant a PFO will consider the general background and concerns raised by the NCA. What is needed is a good arguable case that knowledge of the investigation and the identification of assets could lead to dissipation so as to frustrate any recovery order. If the judge considers that the general background does not show a good arguable case that there is a risk of dissipation of assets or any particular asset, he will not be likely to grant the order. But it has never been considered nor does s.245(A) require that a risk of dissipation had to be proved.”
“There here must be a real risk, judged objectively, that a future judgment would not be met because of unjustifiable dissipation of assets. But it is not every risk of a judgment being unsatisfied which can justify freezing order relief. Solid evidence will be required to support a conclusion that relief is justified, although precisely what this entails in any given case will necessarily vary according to the individual circumstances.”
“[33] The basic legal principles for the grant of a WFO are well-known and uncontroversial and hardly need re-stating. It nevertheless is useful to remind oneself of the succinct summary of the test by Peter Gibson LJ in Thane Investments Ltd v Tomlinson[2003] EWCA Civ 1272 at [21] where he stated that, before making a WFO, the court must be satisfied that: ‘… the applicant for the order has a good, arguable case, that there is a real risk that judgment would go unsatisfied by reason of the disposal by the defendant of his assets, unless he is restrained by the court from disposing of them, and that it would be just and convenient in all the circumstances to grant the freezing order.’ [34]. I also gratefully adopt (as the judge did) the useful summary of some of the key principles applicable to the question of risk of dissipation by Popplewell J (as he then was) in Fundo Soberano de Angola v dos Santos[2018] EWHC 2199 (Comm) (subject to one correction which I note below): (1) The claimant must show a real risk, judged objectively, that a future judgment would not be met because of an unjustified dissipation of assets. In this context dissipation means putting the assets out of reach of a judgment whether by concealment or transfer. (2) The risk of dissipation must be established by solid evidence; mere inference or generalised assertion is not sufficient. (3) The risk of dissipation must be established separately against each respondent. (4) It is not enough to establish a sufficient risk of dissipation merely to establish a good arguable case that the defendant has been guilty of dishonesty; it is necessary to scrutinise the evidence to see whether the dishonesty in question points to the conclusion that assets [may be*] dissipated. It is also necessary to take account of whether there appear at the interlocutory stage to be properly arguable answers to the allegations of dishonesty. (5) The respondent’s former use of offshore structures is relevant but does not itself equate to a risk of dissipation. Businesses and individuals often use offshore structures as part of the normal and legitimate way in which they deal with their assets. Such legitimate reasons may properly include tax planning, privacy, and the use of limited liability structures. (6) What must be threatened is unjustified dissipation. The purpose of a WFO is not to provide the claimant with security; it is to restrain a defendant from evading justice by disposing of, or concealing, assets otherwise than in the normal course of business in a way which will have the effect of making it judgment proof. A WFO is not intended to stop a corporate defendant from dealing with its assets in the normal course of its business. Similarly, it is not intended to constrain an individual defendant from conducting his personal affairs in the way he has always conducted them, providing of course that such conduct is legitimate. If the defendant is not threatening to change the existing way of handling their assets, it will not be sufficient to show that such continued conduct would prejudice the claimant’s ability to enforce a judgment. That would be contrary to the purpose of the WFO jurisdiction because it would require defendants to change their legitimate behaviour in order to provide preferential security for the claim which the claimant would not otherwise enjoy. (7) Each case is fact specific and relevant factors must be looked at cumulatively. (* Note: I have replaced the words ‘are likely to be’ in sub-paragraph (4) with ‘may be’.)”
“… the correct approach in law should be formulated in the following two propositions: (1) Where the court accepts that there is a good arguable case that a respondent engaged in wrongdoing against the applicant relevant to the issue of dissipation, that holding will point powerfully in favour of a risk of dissipation. (2) In such circumstances, it may not be necessary to adduce any significant further evidence in support of a real risk of dissipation; but each case will depend upon its own particular facts and evidence.”
“… ii) The duty requires the applicant to make a full and fair disclosure of those facts which it is material for the court to know: Brink's Mat Ltd v Elcombe[1988] 1 WLR 1350 , 1356 (1) and (2) (Ralph Gibson LJ). Put another way, disclosure should be made of "any matter, which, if the other party were represented, that party would wish the court to be aware of": ABCI v Banque Franco-Tunisienne[1996] 1 Lloyd's Rep 485 , 489 (Waller J). iii) Non-disclosure of material facts on an application made without notice may lead to the setting aside of the order obtained, without examination of the merits. It is important to uphold the requirement of full and frank disclosure. iv) But the court has a discretion to set aside or to continue the order. Whether the fact not disclosed is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends on the importance of the fact to the issues that were to be decided. The answer to the question whether the non-disclosure was innocent is an important, though not decisive, consideration. See Brink's Mat at pp1357 (6) and (7) and 1358 (Balcombe LJ). Further points to be derived from Brink's Mat are:- i) The duty applies to facts known to the applicant and additional facts which he would have known if he had made proper inquiries before the application (1356H, Ralph Gibson LJ). ii) If material non-disclosure is established the court will be "astute to ensure" that a claimant who has obtained an injunction without notice and without full disclosure "is deprived of any advantage he may have gained" (1357C, Ralph Gibson LJ). iii) The rule in favour of discharge also operates as a deterrent to ensure that those who make applications without notice realise the existence and potential consequences of non-disclosure (1358D-E, Balcombe LJ). iv) The discretion to continue the injunction, or to grant a fresh one in its place, is necessary if the rule is not "to become an instrument of injustice"; it is to be exercised "sparingly", but there is no set limit on the circumstances in which it can be exercised (1358E-F, Balcombe LJ).”
“These are the principles relating to disclosure of facts. As to the law, the authorities are clear: there is a "high duty to make full, fair and accurate disclosure … and to draw the court's attention to significant ... legal and procedural aspects of the case": Memory Corp v Sidhu (No 2)[2001] 1 WLR 1443 (CA), 1459-60. The duty is owed by the lawyers also. "It is the particular duty of the advocate to see that … at the hearing the court's attention is drawn by him to … the applicable law and to the formalities and procedure to be observed": Memory Corp, ibid.”
““it is not for every omission that the injunction will be automatically discharged … The court has a discretion, notwithstanding proof of material non-disclosure which justifies or requires the immediate discharge of the ex parte order, nevertheless to continue the order, or to make a new order on terms.”
“In Jennings v Crown Prosecution Service[2006] 1 WLR 182 , the Court of Appeal made it clear that even if there is a non-disclosure of material facts in a case such as this, the fact that the prosecution acts in the public interest will generally militate against discharging an order if, after consideration of all the evidence, the court considers it is appropriate to make such an order. The conduct complained of has to be particularly egregious to justify what the Court of Appeal described as the "ultimate sanction" of discharge. Even if I had been satisfied that there was material non-disclosure in the present case, which I am not, this is nowhere near the type of scenario in which it would be appropriate to exercise the court's discretion to discharge a PFO which is otherwise clearly justified.”
“[469] I am satisfied that during the period that JF was a 25% shareholder in Avromed Company LLC he was legitimately entitled to receive dividends in respect of that shareholding from 2007 to late 2016, when he is said to have sold the shares to his nephew, Elman. However it is by no means clear to this court the exact amount of dividends that JF was (a) actually entitled to and (b) is said to have received. [470] The information provided on JF`s behalf throws little light on the figures that he was actually entitled to and/or that he did in fact receive by way of share dividends. I am unpersuaded by the suggestion that payments marked `account replenishment` was somehow in error and should have been marked `dividends`.”
“[n]one of the people listed in para. 39 are or have been subject of criminal prosecution in Azerbaijan. Please note that we do not accept the expression of "Azerbaijani Laundromat" mentioned several times in the request. "Azerbaijani Laundromat" is not a fact or a legal concept but is a journalistic expression used by the OCCRP. After the OCCRP articles were published the relevant authorities looked into the allegations made and also looked into persons and companies. They found no criminality under the laws of the Republic of Azerbaijan by the subjects of your enquiry.”
“(i) The Properties and the investment account are now believed to have an estimated value of GBP 50 million and EUR 1.2 million and USD 600,000. The Properties are generating a rental income of approx. GBP 1,000,000 per annum. (ii) Enquiries with Land Registry have revealed that all except Property 21 are unencumbered by virtue of a mortgage or registered charge. (iii) Respondent Three currently holds sixteen of the twenty two properties in ‘trust’ on behalf of Respondents One and Two. Therefore, if Respondents One and Two were to instruct Respondent Three to do so, it would be a relatively simple exercise to dissipate the Property and render any judgment against one or more of the Properties more difficult to enforce. (iv) Evidence obtained by the NCA in the course of the Investigation indicates that the Respondents have links to various overseas jurisdictions, including those with existing secrecy legislation, and that they are able to send, and receive, substantial funds to, and from, these jurisdictions. (v) Respondents One and Two are Politically Exposed Persons from Azerbaijan, where they own a residential property (and other properties held for commercial purposes) and maintain familial and political links there. Respondent One currently holds ministerial office within the Azerbaijan Parliament. Therefore I believe that Respondents One and Two have recourse to substantial funds, political connections, offshore resources and a geographic footprint which would make the transfer of the Properties and the balance of the investment account relatively simple and would put them out of the reach of the NCA’s recovery action. (vi) In the aftermath to the Account Forfeiture proceedings Respondent One instructed his investment manager to remit his remaining assets to an account in Turkey. He has also instructed his agents to remit some of the rental income from five of the Properties to a bank account in Azerbaijan. This lends some weight to my belief that he may attempt to dissipate further assets he holds in the UK.”