Issue link: https://digital.shearman.com/i/1265921
ENFORCEMENT IN THE UNITED KINGDOM FCPA DIGEST July 2020 39 fifteen-year sentence for fraud and embezzlement. She attracted a significant degree of media attention last year when court documents revealed her spending habits, which included a total expenditure of £16 million at Harrods in London. The documents also revealed that the NCA had seized a diamond ring worth in excess of £1 million and other items of jewelry totaling around £400,000, suspecting them to have been acquired with the proceeds of crime. The Court of Appeal heard Mrs. Hajiyeva's appeal in December 2019 and delivered its judgment on February 5, 2020 (see Hajiyeva v. NCA [2020] EWCA Civ 108). The Court upheld the High Court's decision and confirmed that Mrs. Hajiyeva was a Politically Exposed Person ("PEP") as a result of her husband's former employment. In that regard, the Court stated that a broad approach should be taken when assessing whether an entity is a "state-owned enterprise." The Court also confirmed that neither the privilege against self-incrimination nor spousal privilege applied to the UWO regime, and even if they did, the U.K. Parliament had clearly intended such privileges to be abrogated. Mrs. Hajiyeva must now comply with the UWO made against her and provide the NCA with a full account of the source of her wealth. However, a few months later, the NCA was dealt a blow in the unconnected case of NCA v. Baker & Others [2020] EWHC 822 (Admin) when Mrs. Justice Lang set aside three UWOs. The UWOs had been secured during an ex parte hearing in which the NCA alleged that a number of properties held in the names of companies had been acquired as a means of laundering the proceeds of the unlawful conduct of Rakhat Aliyev, a senior official in the government of Kazakhstan, who died in prison in Austria in February 2015 while awaiting trial for murder. Upon receipt of the UWOs, the Respondents asserted that Mr. Aliyev was not connected to the properties and that the factual basis for the NCA's application was incorrect. The NCA refused to withdraw the UWOs, and the Respondents sought the discharge of the UWOs. In discharging the orders, the Court concluded that the NCA had failed adequately to investigate a number of matters before seeking the UWOs and described the NCA's assumption that Mr. Aliyev was the source of the funds to purchase the properties as "unreliable." Furthermore, the Court found that the evidence provided by the Respondents concerning ownership to be "cogent." In particular, the Court noted that too much emphasis had been placed on the fact that complex structures had been used to purchase the properties, highlighting that such structures are often used for perfectly legitimate purposes. Following the judgment, the NCA, describing itself as "tenacious," stated that it would seek leave to appeal. However, on June 17, 2020, the Court of Appeal refused leave. It would be easy to read too much into this recent decision. In truth, it is simply a timely reminder to all law enforcement agencies that they should do their homework before seeking an intrusive order during an ex parte hearing and carry out adequate investigations when presented with an explanation by the recipient of such an order. However, as the unsuccessful party is normally ordered to meet the costs of the successful party in such proceedings, it will be interesting to see whether this recent setback dents the NCA's enthusiasm for one of its new investigative tools. Civil Claims In the first half of 2020 we saw another example of the continuing trend of litigants bringing civil proceedings before the English High Court concerning allegations of bribery and corruption. However, in Nigeria v. Royal Dutch Shell & Others [2020] EWHC 1315 (Comm), the Court refused to entertain the claims brought against various companies within the Shell and Eni groups on the basis that "proceedings involving the same cause of action and between the same parties" were already underway in Italy. In February 2017, the Public Prosecutor of Milan charged a number of individuals with the offence of bribery in relation to the acquisition of Nigerian oil rights. Those individuals included current or former officers or employees of companies in the Shell and Eni groups. Nigeria joined the Italian criminal proceedings as a civil claimant. Various Shell and Eni entities were joined to the proceedings as a result of Nigeria alleging that they are vicariously liable for the criminal conduct of the individuals in question. The trial began in March 2018 and is continuing. In October 2019, the U.S. Department of Justice concluded its investigations against companies in the Shell and Eni groups in relation to the conduct that is the subject of the Italian trial without taking any action.