NCA action – a start of many such cases


By Shahid Dastgir Khan

Last week, Britain’s National Crime Agency (NCA) said that it had agreed a settlement with Riaz Malik Hussain in which the real estate tycoon and one of the country’s biggest employers agreed to hand over £190 millionheld in property and bank accounts to settle a British investigation into the source of money to find out whether this was from proceeds of crime. His property 1 Hyde Park Place in London valued at £50 million and money frozen in various British bank accounts amounting to £140 million was seized and has now been passed to the government of Pakistan and deposited with the Supreme Court of Pakistan.

According to the NCA the £190 million pounds settlement is the result of an investigation into Malik Riaz Hussain. The NCA statement continues “in August 2019 eight account freezing orders were secured at Westminster Magistrates Court in connection with funds totalling around £120 million. These followed an earlier freezing order in December 2018 linked to the same investigation for £20 million. All of the account freezing orders relate to money held in UK bank accounts.

There have been various speculations and stories not backed by facts circulating in Islamabad and London, however, the NCA statement is brief and this is a settlement offer accepted by Mr Hussain without admission of guilt meaning no charges were labelled against him under the Proceeds of Crime Act 2002. The settlement is therefore a “civil matter”. This is indeed the largest asset recovery ever recorded by the NCA. The outcome has been a success story for PM Imran Khan’s government as a result of close cooperation between the Asset Recovery Unit (ARC) in Pakistan and the British Authorities. The Supreme Court of Pakistan earlier in March this year accepted an offer from Mr Hussain to pay Rupees 460 million (£2.3 billion) to settle all cases over a huge development in Karachi and according to him the £190 settlement is to be set off against Bahria Town, Karachi project stressing that the settlement “was a civil matter and did not constitute a finding of guilt.” However this will certainly give a boost to Imran Khan’s anti-corruption drive,since he has repeatedly announced his commitment to recover and bring back billions of dollars into the exchequer. It seems this was a joint effort by the NCA and the ARU headed by Shahzad Akbar who thanked the UK Government and the NCA for expediting the investigation. Presently, there are several investigations ongoing in Pakistan and  the UK and similar seizure of assets and/ or return of money to Pakistan cannot be ruled out in the coming months should such investigations be successful.

International money laundering of corruption money by politicians and businessmen of many developing countries is a cause of concernand must be somewhat embarrassing for the UK Government where numerous properties and bank accounts are held and being investigated.

Transparency International UK has welcomed the news that the UK law enforcement have secured a substantial amount of funds for return to the people of Pakistan. Their response stated “the size of funds in this case is step changed from previous efforts in importance of changes introduced by the Criminal Finances Act 2017. Although there is scant information about the specifics of the case, returning seized funds to the country of origin, as is proposed, is an obligation under the UN Convention against Corruption. We call upon the UK government to honour its commitment to returning proceeds of corruption transparently and accountably.” Thisfrom Transparency International is bound to cause discomfort and worry among many politicians and business tycoons who have accumulatedill-gotten wealth through corruption, kick-backs and money laundering  and many of them use off shore companies to conceal their crime or use as a veil to prevent access to bank accounts or property.

Let us now turn to the legislation governing the seizure of assets and money believed to be proceeds of crime. The Criminal Finances Act 2017 introduced Unexplained Wealth Orders (UWO) regime in the UK, such an order can be grantedon an application at the request ofauthorised enforcement authorities such as the National Crime Agency or the HM Revenue and Customs (HMRC). The Court will grant such an order if satisfied that there are reasonable grounds for suspecting that the property in question has been acquired by the respondent who does not have the means to do so. The object of the exercise is to expose and recover illicit wealth. In addition to NCA and HMRC, FCA (Financial Conduct Authority) and SFO (Serious Fraud Office) have been granted the power to apply for UWO’s. The interesting thing is that the respondent does not have to be a resident of the UK and if they are a politically exposed person, they must be located outside the UK to be caught by the Act. Thus, a UK enforcement authority may seek assistance from foreign authorities to enforce a UWO and providing such cooperation is availablethen an application for a UWO can proceed. The NCA would normally encourage a settlement offer after highlighting to the suspected person, the evidence they have gathered for instituting assets seizure or criminal proceedings should a settlement not be reached. The suspect must otherwise satisfy the authority the money used to obtain any assets was clean money.

The July 2018 elections in Pakistan brought Imran Khan’s PTI to power and as Prime Minister he pledged to combat corruption and make accountable those who have amassed ill-gotten wealth through corruption, kick-backs and money laundering. He set up a special team to deal with it, the Asset Recovery Unit (ARU). The British and Pakistani governments agreed to extend cooperation and are working closely on a number of ongoing investigations into criminal wealth held in the UK by Pakistani nationals, notably politicians from PML(N) and more importantly former prime minister Nawaz Sharif and his brother Shahbaz Sharif and other close family members and associates. The Asset Recovery Unit chief Shahzad Akbar believesinvestigations have uncovered evidence of money laundering on a vast scale and the international community should take this seriously. It is argued that the money laundered from developing countries such as Pakistanstalls the country’s progress and economic growth which often results in more poverty, thus increasing the suffering of the people. It puts back the government’s efforts in alleviating poverty and investing in health, education and welfare projects. The opposition political parties in particular the PML (N) claim that this is a witch hunt and a political vendetta disguised as accountability for corruption. Pakistan’s politics since it’s independence in 1947 has been dominated by feudal lords and wealthy industrialists. It is a developing country with just 44% literacy rate and it has since 2014 received more foreign aid than any other country from the UK, in excess of £450 million a year. Roughly 40% of the population lives below poverty line, about 2 million are caught up in child, forced and bonded labour, 400 newborn die every day. The health budget has been around 2.5 % of its GDP, whereas the education budget is around 2% of GDP. The country has one of highest perinatal and neonatal mortality rates, contributing significantly to global neonatal mortality. Its population continues to rise at over 2% annually further adding to rising poverty. More than 6 million children are out of the school education system and added to this are the avoidable deaths due to hepatitis, malaria, diabetes and dengue fever. The population continues to rise uncontrollably due to lack of awareness about the economic and health benefits of birth control and the small increase in health facilities over the last years are nowhere near the resources required to combat the increase in population which puts an enormous burden on the health service.

It is estimated that over £200 billion of the country’s looted wealth may have been hidden away through money laundering in the European and US banks, much of it may have been used to invest in properties and businesses there and in the UAE. It remains the dream of millions of Pakistanis not only living in Pakistan but worldwide to see a system of accountability in operation which ensures a fair and expeditious trial and return of corruption money to Pakistan for investment in poverty alleviation, education, health and welfare of it’s people.

(The writer is solicitor of the Senior Courts of England and Wales, political analyst and ex-trustee/ council member of Anti Slavery International UK. E-mail: Facebook:  Shahid Dastgir Khan. Twitter: @Sdk184)