Show me your money and where it came from

The wife wanted an Audemars Piguet from the Royal Oak Collection on her wrist to match the silver Birkin handbag. A pre-arranged phone call did the trick. No questions asked; no receipt requested. The watch came in a steel case.

The girlfriend, an overaged singer, wanted a house to settle down. She was living out of a suitcase when on her touring gigs. He bought her an apartment just outside the Mile End tube station in London’s suburbs.

The son went to the Hippodrome Casino in the West End and blew a fortune. One phone call and money were transferred into his account which allowed him to continue throwing the dice.

The daughter wanted an apartment. She had just started a family and needed a pad for herself, her hubby and infant son. But she didn’t want the house in the upmarket Regent’s Park area – that’s mummy’s place to pack her purchases before heading to Heathrow airport.

The son-in-law was not used to luxury. But his “brothers” from Azerbaijan and children of Russian oligarchs were racing the streets with the Maseratis and Lamborghinis. Could the better half talk to Daddy? Done.

These may be hypothetical cases supposedly to have taken place in the United Kingdom. But in each of the transactions, Big Brother was watching, and one or all five of them would now be in required by law to explain where the money came from.

UK’s Unexplained Wealth Order (UWO), which Malaysia is seeking to replicate, requires housing agents, boutiques, car firms, jewellers and dealers of valuables to report “suspicious” transactions.

The UWO is an order issued by British courts to compel anyone to reveal the sources of their unexplained wealth. Persons who fail to account are liable to have their assets seized.

In the first-ever case in UK, officers from the National Crime Agency (NCA) took Zamira Hajiyeva to court for having acquired property with unexplainable funds. She is the husband of jailed Azerbaijani banking fraudster Jahangir Hajiyev.

According to court records, she spent more than £16 million (RM87 million) in Harrods between September 2006 and June 2016. She also had two properties worth £12 million (RM65 million) in posh areas of London.

They were allegedly bought by money embezzled by her husband. She had initially sought a court order to protect her identity from the media, but lost the case. She was initially on bail but it was revoked.

It may not sound familiar, but the video two years ago would have brought memories. Remember the clip showing a posse of bags being loaded on a plane under the supervision and direction of an unemployed housewife?

With the UWO, perhaps some of the money taken out can be traced if it had found its way across the seas to the UK.

Money stolen from 1MDB

Introduced in January, the UWOs require the owner of an asset worth more than £50,000 (RM270,000) to explain how he or she was able to afford that asset. It was introduced primarily to target Russian and Azerbaijan laundromats.

UWOs have wide-ranging applications to situations where the NCA believes wealth was acquired illicitly, including tax evasion. Obviously, it is also applicable to assets bought with money stolen from 1MDB.

Previously, little could be done by the UK authorities to act on highly suspicious wealth unless there was a legal conviction in the country of origin. In cases where the origin country is in crisis or the individual holds power in a corrupt government, this was unlikely to be achieved.

Before this, law enforcement agencies needed to prove in court that an asset was purchased with laundered funds. UWOs shift the burden of proof from the prosecutors to the asset’s owner and the courts have the powers not only to seize the assets but also powers to prosecute.

This is the weapon that the Malaysian government needs to seize and repatriate millions of “dirty money” which had laundered through property purchases in the UK and purchase of expensive jewellery and paintings.

It’s said that if you threw a stone in London’s Bayswater area, it would probably land on the head of a Malaysian Datuk who owns a property in the much-sought-after neighbourhood! On a more serious note, this piece of legislation would be the most powerful weapon to identify the properties and valuables purchased in Malaysia with money stolen from 1MDB.

The UWO not only applies to monies stolen from 1MDB but also government funds misappropriated by government officials, businessmen and politicians using proxies and nominees.

(Corruption watchdog Transparency International estimates that £4 billion of UK property has been purchased with the proceeds of crime.)

It is apparent that Malaysia needs a similar legislation to combat corruption and money laundering. The announcement last week by Finance Minister Lim Guan Eng (photo) is welcome indeed.

“We want to get the government’s money back, this is why the attorney-general is studying this provision introduced in the UK,” he was quoted as saying during a dialogue session in Penang.

For years, anti-corruption advocates had pleaded with the government to introduce a clause in our anti-corruption law which “makes it an offence for anyone to lead a lifestyle or have assets disproportionate to his or her declared income.”

The pleas were rebuffed for obvious reasons. The cynics said that if there was such a law, three-quarters of MPs on the then government bench would be in jail. If senior government officers were to be included, they quipped, a new wing would have to be built in Sungai Buloh!

The UWOs can act as powerful tools for law enforcement to identify criminals, and can also question financial institutions which facilitated the management of money of such individuals.

When do we you think it should come into force? Indeed, it should be done yesterday!

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R NADESWARAN joined the Bar Council and a few like-minded citizens four years ago to bring about amendments to the law on ill-gotten wealth. Sad to say, we never got anywhere. Comments: citizen.nades22@gmail.com. - Mkini

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