All posts by Jamie Humphreys

Jamie is an associate in Cooley's London office and a member of the Litigation department. He qualified in 2008. He has a broad range of experience acting for governments, companies and individuals on complex commercial litigation disputes, with a recent focus on civil fraud, anti-corruption and asset tracing. He has experience of English, Caribbean and Hong Kong court proceedings, as well as mediations and arbitrations.

Anti-corruption

UK Government responds to International Development Committee’s Fourth Report 2016/2017

In October 2016, the International Development Committee put forward 13 recommendations for the improvement of the UK Government efforts to tackle overseas corruption. Last month the UK Government published its response.

The Government agreed with seven recommendations:

  • assess the extent of money laundered through the UK and continue to lobbying the UK’s Overseas Territories and Crown Dependencies to apply the same level of transparency and accountability;
  • develop a cross-government Anti-Corruption Strategy;
  • continue prioritisation of anti-corruption efforts during Brexit negotiations and afterwards;
  • apply research into the effectiveness of different anti-corruption methods;
  • include foreign parliaments in DFID’s anti-corruption country strategies;
  • work with foreign governments to increase protection for whistleblowers; and
  • DFID to monitor progress of anti-corruption programmes.

The Government partially agreed with the following four recommendations:

  • reappoint the anti-corruption “Champion”;
  • further work on the inclusion of developing countries in discussions and decisions on international tax matters;
  • develop DFID rolling strategies with a 10 year horizon; and
  • DFID’s publication of anti-corruption country strategies.

The Government disagreed with the following proposals:

  • lobby the UK’s Overseas Territories and Crown Dependencies to create public beneficial ownership registers; and
  • publish country by country reporting of profits and payments to governments by multinationals.

The two areas where the Government declined to follow the Committee’s recommendations appear to reflect a concern that although the UK should be seen as a leader in the fight against anti-corruption, it should not go too far ahead. The Government emphasises that the UK’s Overseas Territories and Crown Dependencies already go further than other jurisdictions as they allow law enforcement to access the information. In respect of the publication of profits and payments to governments by multinationals, the Government expressly states that this should be a multilateral effort.

Asset recovery

New crime bill to introduce Unexplained Wealth Orders

The Government is due to publish a new proceeds of crime bill tomorrow, which will introduce Unexplained Wealth Orders (UWOs), as reported in The Times (paywall).

UWOs would allow the police to apply for an order to require individuals to explain their source of wealth where it exceeds their lawful income. They will be an useful antidote to foreign public officials on low salaries and no other obvious source of legal income who hold valuable UK property, as reported  following the release of the Panama Papers.

Our James Maton was a member of the Transparency International panel that developed a detailed proposal for UWOs (see summary here). We will publish our analysis of the Government’s proposal once it is published.

Asset recovery

Backwards Tracing takes a step forward

The Privy Council recently extended the availability of ‘tracing’ in a novel way to increase the options available to states seeking to recover stolen property.

Before this decision a state could only trace property that had been altered, say by sale or transfer, into the proceeds of that alteration if those proceeds did not exist prior to the move. The process of tracing required the state to show what had happened to the property and to identify its proceeds and their recipient. This formed the basis of a claim against the recipient of the proceeds on the basis that those proceeds represented the original property. There was no tracing claim where the proceeds were already in the hands of the recipient.

The Privy Council’s extension of this principle means that where there is a ‘coordinated scheme’, property can be traced into proceeds that were in the hands of the defendant before the property was altered.

This is an extremely useful tool for states that are subject to sophisticated corruption or frauds designed to thwart recovery. We consider the claim in more detail here.

Anti-corruption

CooleyAR’s summer holiday

The team will be taking August to recuperate after a furious few months blogging and will return in the Autumn.

However, before we pack our bags it is worth reflecting on David Cameron’s recent speech in Singapore where he addressed the threat posed by corruption worldwide. We were particularly interested in his comments on how the UK should respond to corrupt foreign companies laundering money through the UK – a topic we touched on last week. Mr Cameron announced that the Land Registry has been instructed to public data on foreign companies holding land and a consultation is taking place on expanding beneficial ownership rules to foreign companies who own property or contract with the UK Government. These are very positive steps and we will report back once these various consultations are released.

The speech is available in full here, and the relevant passage is below:

“Now with £122 billion of property in England and Wales owned by offshore companies we know that some high-value properties – particularly in London – are being bought by people overseas through anonymous shell companies, some of them with plundered or laundered cash. Just last week, there were allegations of links between a former Kazakh secret police chief and a London property portfolio worth nearly £150 million.

I’m determined that the UK must not become a safe haven for corrupt money from around the world. We need to stop corrupt officials or organised criminals using anonymous shell companies to invest their ill-gotten gains in London property, without being tracked down.

People like convicted Nigerian fraudster James Ibori, who owned property in St John’s Wood, Hampstead, Regent’s Park, Dorset all paid for with money stolen from some of the world’s poorest people. So we have got to find ways to make property ownership by foreign companies much more transparent.

There may be a number of ways we can do this, for example extending what we currently ask of UK companies to foreign companies too. And we will consult on the best way forward.

But as a first step, I have asked the Land Registry to publish this autumn data on which foreign companies own which land and property titles in England and Wales. This will apply to around 100,000 titles held on the Land Register and will show for the first time the full set of titles owned by foreign companies.

And we will also look carefully at the case for insisting that any non-UK company wishing to bid on a contract with the UK government should also publically state who really owns it using the government’s buying power as a if you like, battering ram for greater corporate transparency around the world.

So let me be clear. The vast majority of foreign-owned businesses that invest in property in the UK are entirely legitimate and proper, and have nothing at all to hide. They are welcome in Britain. Indeed I want more of them. We want one of the most open country in the world for investment. And I want Britain to be that country.

But I want to ensure that all this money is clean money. There is no place for dirty money in Britain. Indeed, there should be no place for dirty money anywhere. That is my message to foreign fraudsters: London is not a place to stash your dodgy cash”

Anti-corruption

A proposal to extend beneficial ownership rules to UK land-holding foreign companies

A report published today by Global Witness, alleging that an individual with ties to a former Kazakh public official owns large swathes of London, follows much recent interest in the issue of public officials owning property in the UK via secretive corporate structures that conceal their interest.

Earlier this month, an Early Day Motion (EDM) was filed at the House of Commons in support of the motion that the Land Registry should record the beneficial owners of foreign companies holding land in the UK. The EDM was triggered by the recent screening of From Russia with Cash on Channel 4, which alleged that significant sums of illicit funds from Russia were being invested in the UK property market while estate agents turned a blind eye. While EDMs often have little chance of being debated, they are frequently used as a means of raising the profile of certain issues among the media and the public.

The proposal to extend beneficial ownership rules to foreign companies was proposed in Transparency International UK’s publication Corruption on your Doorstep, which analysed data from the Land Registry and Metropolitan Police Proceeds of Corruption Unit to identify over 35,000 properties in London owned by off-shore companies and found that over 75% of suspects in grand corruption cases had used such structures to conceal their ownership of property.

At the recent Annual General Meeting of the All Party Parliamentary Group (APPG) on Anti-Corruption, the proposal to extend corporate transparency rules to foreign companies owning property in the UK was identified as a potential priority for the APPG to pursue during this Parliament.

Given the willingness of David Cameron to take a decisive lead on beneficial ownership (see our review of the legislation here), the opportunity to close an obvious loophole may be quite attractive to the Government and it will demonstrate a sincere commitment to addressing corruption and money laundering in the UK.

Anti-corruption

What states should know about unjust enrichment

We close out our series of tip-sheets on the causes of actions available to states who have been victims of bribery and corruption with a note on unjust enrichment. This is an interesting claim that sets the bar a little lower than some of the previous claims we have reviewed. There is no need to provide evidence of the underlying bribery or corruption – it is only necessary to prove that the defendant has been enriched at the expense of the state under one of four unjust factors. We also consider what does not need to be proved as well as the available defences and remedies. Our tip-sheet on unjust enrichment is available here.

Bribery

What states should know about the contractual consequences of bribery

This week’s tip-sheet concerns the remedies available to states where they are party to a contract procured through bribery. We discuss the pros and cons of rescission and termination as well as the reasons why a state may choose to re-negotiate contracts that have been affected by bribery. We also consider the risk of waiver that can occur when a decision to terminate or rescind is not taken quickly enough. Our tip-sheet is available here.