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Britain's Unexplained Wealth Orders Give the State Too Much Power

June 13, 2019 in Economics

By Walter Olson

Walter Olson

Authorities in Britain have begun trying out a new police power
called unexplained wealth orders under a law that took effect last
year. The police go to a court and say you’re living way above any
known legitimate income. The judge then signs an order compelling
you to show that your possessions (whether a house, fancy car, or
jewelry) have been obtained honestly and not with dirty money. In
the meantime, the boat or artwork or other assets get frozen, and
you can’t sell them until you’ve shown you obtained them
innocently.

The kicker: The burden of proof falls on you, not the
government. If you don’t prove the funds were clean, Her Majesty
may be presumed entitled to keep the goodies.

It’s like, “Your papers,
please,” but for things you own.

The asset must be worth at least £50,000, but it doesn’t
have to be located in Britain so long as you yourself fall under
its laws. The law was a response to London’s popularity as the
favorite place for overseas oligarchs (nicknamed “McMafia” in a
popular TV series) to stow ill-gotten funds, with convenient
flights, luxury shopping, and a hot property market.

The first person named as a target of the law was Zamira
Hajiyeva, whose story could make even an oligarch blush, assisted
by a small fortune in purchases from Harrods cosmetics and perfume
counters. Hajiyeva’s husband is serving time after being convicted
of extracting at least $100 million from Azerbaijan’s
state-controlled bank, of which he was chairman. She’s fighting
extradition to that country herself.

In the meantime, her possessions include a £12 million
London house and a golf course on the outskirts. Details of
Hajiyeva’s wild Harrods spending sprees were neatly captured for
authorities and readers by the store’s loyalty card program. They
included a £1,190,000 Cartier diamond ring and tens of
thousands at a Godiva chocolate shop, adding up to $20 million over
a decade. The high-end London store reserved two bespoke parking
spots for her. She used at least 54 credit cards, many issued by
the state-controlled bank her husband ran.

By the way, don’t stories like these make the idea of a
state-controlled bank, as has been floating in New Jersey and
elsewhere, sound just swell?

The new British law doesn’t allow the police to seize just
anyone’s assets. The target has to fall into one of two categories.
The first is those a judge finds to be reasonably suspected of
involvement in serious crime, or connected to such a person. That
doesn’t sound so bad, but remember that “serious crime” can mean
lots of things, not just being the next Bernie …read more

Source: OP-EDS

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