What do you buy the woman who has everything? The question might well have been asked of Zamira Hajiyeva, the subject of the UK's first ever Unexplained Wealth Order (UWO). Such was the imagination with which Mrs Hajiyeva, the Picasso of profligacy, found ways to splash the cash during a decade-long £16.3m spending spree in Harrods – details of which emerged in court documents last week – it's clear that at least she never struggled to answer that question.
Unsurprisingly, jewels were among the most valuable of the items purchased – some £3.5m spent on Boucheron bling and £1.4m on Cartier crap. But what truly boggles the mind are the sums dispensed on the mundane – £332,000 in the sandwich shop, £32,000 on luxury chocs, £24,000 on tea and and coffee. The only item that doesn't scream extreme – at least by these kleptocratic standards – is the £10,000 fruit and veg bill. Averaged out over the 10 years, this comes to about £2.74 a day, which I assume stretches to half a Harrods' carrot. Mrs Hajiyeva's life may have been one of excess, but this does not appear to have stretched to maxing out her five-a-day.
One of the sources of Mrs Hajiyeva's wealth, it might be assumed in this context, is her ex-banker husband. Jahangir Hajiyev served as chairman of the state-owned International Bank of Azerbaijan between 2001 and 2015. In October 2016, Mr Hajiyev was sentenced to 15 years in prison by an Azerbaijani court for defrauding the bank, an investigation later finding he had defrauded the bank to the tune of €125m.
Fascinating as the details of Mrs Hajiyeva's shopping list are, the significant new powers being wielded here by crime-fighters – and the possibility this could help hold back the tide of dirty money flowing into London – should not be overlooked.
Dubbed 'McMafia laws' after the BBC's hit Russian mob drama, UWOs allow authorities such as the National Crime Agency or the Serious Fraud Office to apply to the High Court for an order requiring a person suspected of being connected to serious crime to explain how he or she came into possession of property they would be unable to afford with their legitimate income. For example, Mr Hajiyev's pay as chairman of the bank was no more than $71,000 per year, with a further $89,000 in dividends from his shares in the bank – enough for a relatively comfortable existence in Baku, no doubt, but certainly not enough to fund a multi-million pound handbag habit.
Two factors distinguish the UWO. Firstly, it is not a criminal procedure, but part of an investigative toolkit. The onus lies on the subject of the UWO to demonstrate they acquired the property legitimately, rather than the burden being on the state to prove the assets were obtained with the proceeds of crime. As such, information disclosed under a UWO cannot normally be part of any subsequent criminal prosecution. It can, however, be used in later civil efforts to recover ill-gotten gains.
Secondly, even in cases where there is not a suspicion of serious criminality, they can be applied to 'Politically Exposed Persons' (PEPs) from non-EEA countries. In financial regulatory jargon, PEP is a designation applied to anyone in a prominent public position: politicians, judges, ambassadors, heads of state-owned banks – basically anyone who might be worth bribing.
These details make for a powerful investigative tool. The ability to target PEPs, regardless of an established criminal link, make UWOs particularly useful for tackling the corrupt elites of Russia and the former Soviet block.
This first successful use of an order is encouraging for anyone concerned that the UK should not offer safe harbour to those plundering state resources (all too often in countries where state resources are scarce to begin with). And it is no secret that London property ranks high among the oligarchs' and kleptocrats' favoured places to park dirty money (a £15m Knightsbridge mansion was also among Mrs Hajiyeva's assets).
A second set of UWOs has also recently been served to the owners of London properties worth around £80m, being held via an offshore company. I can't help but wonder whether the continued prevalence of offshore anonymity – which has greased the wheels of all the recent international money laundering schemes – will limit the effectiveness of UWOs. With plenty of offshore jurisdictions such as the British Virgin Islands offering anonymity to the ultimate beneficial owners of companies and their assets, the real challenge may lie in proving that certain assets actually belong to an individual, a necessary precursor before asking someone how they could acquire those assets.
Regardless, the UWO is to be welcomed. These sorts of white collar crime often seem like a distant drama – the stuff of thrillers rather than something with any bearing on our day-to-day lives. Worse yet, they are all too often written-off as a victimless crime.
But there is a real impact. In the case of the International Bank of Azerbaijan, the lenders financial position was severely weakened, at least in part due to the fraud. The government provided several capital injections – money from the taxpayer – as it tried to save the bank. This ultimately proved insufficient and the bank was forced to restructure its debts in 2017, imposing a financial loss on creditors. Those creditors no doubt included many of the pension, insurance and savings funds that many of us pay into every month. Albeit in a very small way, we are all the victims of these victimless
David Graves is a journalist from Edinburgh, living in London. His reporting is mainly focused on finance in emerging markets