Y

u
r
i
Unexplained Wealth Orders (UWO) Explained
B
o
t
i section 1 of the Criminal Finances Act 2017 A UWO is an order requiring the respondent to
u provide a statement:
Civil orders ie not a criminal but civil
k
- standard or proof Setting out the nature and extent of the
C respondent’s interest in the property in respect
The orders may be made without prior notice
a of which the order is made.
n being given to the person subject to the
Explaining how the respondent obtained the
d order.
e property (especially where did the money come
y Came into force on 31 January 2018
from).
Coupled with freezing orders Where the property is held by the trustees of a
settlement, setting out such details of the
settlement as may be specified in the order.
And any other issues related to the property
which may arise
Y
u
r
i
Unexplained Wealth Orders (UWO) Explained
B
o
t
Criteria for UWO PEP definition
i The respondent holds the property. An individual who is, or has been, entrusted
u The value of the property is greater than with prominent public functions by an
£50,000. international organisation or by a state other
k than the UK or another EEA state.
- There are reasonable grounds for suspecting
that the known sources of the respondent’s A family member of a person described above.
C
a lawfully obtained income would have been Someone known to be a close associate of a
n
insufficient for the purposes of enabling the person described above.
respondent to obtain the property. Someone otherwise connected with a person
d
e
The respondent is either a politically exposed described above.
person (PEP) or there are reasonable grounds
y for suspecting that:
the respondent is, or has been, involved in
serious crime (whether in a part of the UK or
elsewhere); or
a person connected with the respondent is, or
has been, so involved.
Y
u
r
i
Unexplained Wealth Orders (UWO) Explained
B
o
Possible challenges to an UWO
t
(1) human rights legislation: the burden of proof is
i on the alleged asset owner
u presumption of innocence.
k protection of the right to privacy and private life,
- the protection of possessions and property rights
C from unnecessary or disproportionate interference
a whether an order might amount to a retrospective
n “penalty” in its operation to assets held prior to this
d new law
e (2) material non-disclosure or that the criteria for
such an order have not been properly met.
y
(3) Potential abuse of process may arise if this
process is to be used to thwart due process rights
protecting individuals subject to criminal prosecution
- privilege against self-incrimination being
undermined if there remains a prospect of criminal
prosecution in relation to any information contained
with the statement forming a basis of the criminal
investigation.
NCA secures first unexplained wealth orders
28 February 2018
The NCA has secured two unexplained wealth orders
(UWOs) to investigate assets totalling £22m that are
believed to ultimately be owned by a politically
exposed person (PEP). These are the first such
orders granted and represent the first time the
legislation will be tested through the court. The
orders relate to two properties, one in London and
one in the South East of England.
In addition to the UWOs, interim freezing orders
(IFOs) were granted meaning that the assets cannot
be sold, transferred or dissipated while subject to the
order (IFO).
Donald Toon, Director for Economic Crime at the
NCA, said: “Unexplained wealth orders have the
potential to significantly reduce the appeal of the UK
as a destination for illicit income. They enable the UK
to more effectively target the problem of money
laundering through prime real estate in London and
elsewhere. We are determined to use all of the
powers available to us to combat the flow of illicit
monies into, or through, the UK.”
Y
u
r
i
Unexplained Wealth Orders (UWO) Explained
B
o
t
i
Unexpected Outcomes Unexpected Outcomes
u Civil compensation proceedings Private prosecutions/Judicial
k
- Returning money to states? review actions
C
a Russian Prosecutor Demands U.K. Use of disclosure in other
n Return $8.4 Billion 'Looted' by
d proceedings – family, debt
e Russian Criminals
y recovery, arbitration etc
Immigration law provisions in the UK

An overview of some of the relevant requirements

John Litton QC
Visitors

• Visitor visa is granted for a person coming to UK for a

temporary purpose (e.g. as a tourist); maximum 6 months
• Cannot work in the UK but certain business activities
permitted e.g. meetings/conferences; signing deals/contracts;
gathering information for overseas employment
• Also Permitted Paid Engagement Visa – law/media/modelling
• Short-term study or school exchange permitted on visit visa;
otherwise, students must obtain a student visa:
– Full-time degree course in the UK
– Children studying at a non-state school
– NB: a parent of a student child can also obtain leave
Entrepreneurs
You can apply for a ‘Tier 1 (Entrepreneur)’ visa if:
• You want to set up or run a business in the UK
• You meet other eligibility requirements e.g. money held in
regulated financial institution; English language requirement
• You have access to at least £50,000 investment moneys free
to spend on business in the UK
• There are different eligibility requirements depending on
whether you have access to £50,000 or to £200,000

• You can come to the UK with a Tier 1 (Entrepreneur) visa for a

maximum of 3 years and 4 months
Investors
You can apply for a ‘Tier 1 (Investor)’ visa if:
• You want to invest £2,000,000 or more in the UK
• You meet certain other eligibility requirements: e.g. your or
your partner’s money; hold a UK bank account; money free to
spend in the UK
• You can come to the UK with a Tier 1 (Investor) visa for a
maximum of 3 years and 4 months
• There are other routes for an investor visa for those already
in the UK
• Other Tier 1 categories: Tier 1 Exceptional Talent; Tier 1
Graduate Entrepreneur
Workers – “Tier 2”

You can apply for a ‘Tier 2 (General)’ visa if:

• You’ve been offered a skilled job in the UK by a sponsor
licensed by the Secretary of State
• Can come to the UK for a maximum of 5 years
• As a Tier 2 migrant, you can:
– do a second job in certain circumstances
– study as long as it doesn’t interfere with the job you’re
sponsored for
– travel abroad and return to the UK
– bring family members with you
• Also note: Tier 2 Intra-company Transfer visa
Working with the UK from
Kazakhstan – family law
implications
Izzy Walsh, Senior Associate

Izzy Walsh, Senior Associate

dawsoncornwell.com
Divorce - jurisdiction risks
An individual may issue divorce proceedings in England & Wales if at the time of the
petition:
• Either party is domiciled in England & Wales
• Either party is habitually resident at the time of the petition, and has been
resident for 12 months;
• Either party is domiciled and habitually resident at the time of the petition, and
has been resident for 6 months

In addition to the above, an individual may issue a financial application upon a

foreign divorce:
• Either party is domiciled in England & Wales at the time of the foreign divorce or
at the time of the application
• Either party has a beneficial interest in a property which was the matrimonial
home at some stage during the marriage

Izzy Walsh, Senior Associate

dawsoncornwell.com
 English court’s approach to financial
settlement upon divorce
Capital division
• Starting point is 50/50 division of assets built up during the marriage
• Court has wide discretionary powers, and may make a (sometimes significant)
departure from this starting point
• ‘Needs’ trump all – the court will generously assess a party’s capital needs and
if necessary, override sharing principles to meet those needs
Maintenance (‘alimony’)
• English Court has the power to award spousal maintenance, although no
automatic entitlement
• Court will consider the parties’ reasonable needs and available resources
• Court has a duty to achieve a ‘clean break’ where possible – this can result in a
lump sum capitalising the maintenance due

Izzy Walsh, Senior Associate

dawsoncornwell.com
The Radmacher guidelines
(Ancillary Relief: Prenuptial Agreement) [2010] UKSC 42

The court should give effect to a nuptial agreement which is:

• Freely entered into by each party
• With a full appreciation of its implications
• Unless in the circumstances it would be unfair to do so

As an indication, the court will look for:

• Independent legal advice
• Sufficient disclosure of material finances
• Executed not less than 21 days before the marriage
• No undue pressure or duress
• Must take into account the reasonable needs of a child
• Does not cause significant injustice

Izzy Walsh, Senior Associate

dawsoncornwell.com
Hague Convention on International Child
Abduction 1980

• Deals with children who are wrongfully removed from one jurisdiction or
wrongfully retained outside the country of their habitual residence
• Signatory countries agree to uphold and enforce each other’s decisions
about child abduction cases
• Kazakhstan became a signatory in June 2017
• Actions can be incredibly complex – it is very important to act quickly and to
obtain specialist legal advice

Izzy Walsh, Senior Associate

dawsoncornwell.com
t: +44(0)207 242 2556 15 Red Lion Square, Holborn,
f: +44(0)207 831 0478 London WC1R 4QT
Izzy Walsh, Senior Associate
e: iw@dawsoncornwell.com www.dawsoncornwell.com dawsoncornwell.com
 UK Taxation —
Issues Affecting HNWIs

Prepared for English Law Summit in Kazakhstan on

23–25 April 2018
by Dmitry Zapol, partner, ADIT (Affiliate)
IFS Consultants, UK
dmitry@interfis.com +44 790 1687208

16
Overview

● UK inbound investment matters

● Inheritance tax and residential property
● Taxation on disposal of residential property
● Taxation on disposal of non-residential property
● New arrivals in the UK
● Individual residence
● Financing life in the UK
● Already living in the UK
● Clean capital cleansing
● Information exchange
● Requirement to correct
● Cryptoassets

17 www.interfis.com
UK Real Estate

● Inheritance tax planning

● UK real estate subject to 40% IHT on owner’s death regardless of nationality /
residence
● Non-workable structure — company and trust
● Current law — IHT transparency for companies and trusts, incl. 10-yearly & exit
charges
● Transfer to trust — 20% IHT; consideration outstanding is an asset
● loans constitute chargeable assets for creditors
● Planning — insurance, mortgage, hw beware of creditors’ UK assets
● Disposal of residential property
● Non-resident CGT (28%) on sale or gift / ATED / ATED CGT
● Possible step-up in base cost to 5 April 2013 or 5 April 2015
● Planning revolves around lowering tax rate, not avoiding it completely
● Principal residence relief — available to non-UK residents subject to 90 days in the
UK
● Disposal of non-residential property
● Normally, non-UK residents not liable to tax, hw will change in April 2019 subject to
step up to April 2019 market value
● Income tax (45%) / corporation tax (19%) liability on property acquired as trading
assets subject to low burden of proof
18 www.interfis.com
Personal Taxation Matters

● Tax residence
● Tax residence not affected by citizenship, immigration status or personal circumstances but depends on days in the UK
and a list of specific factors
● A day spent in the UK is a midnight and normally only days of arrival are included in the calculation
● Resident if over 183 in the UK, however, can also be resident with 90-day presence
● Clean capital cleansing
● Funds earned before coming to the UK and not taxed
● Keep in a separate foreign bank account and do not mix with income or gains to avoid tax in the most detrimental way;
mixed capital cannot normally be separated
● In 2017/18 and 2018/19 can cleanse mixed funds; divide them into constituent parts into separate non-UK bank
accounts
● Relief for UK resident non-UK doms who had claimed the remittance basis in or before tax year starting April 2016
subject to providing sufficient proof
● Requirement to correct
● Deadline September 2018 to report undeclared or improperly declared UK tax liabilities or face 200% fines and criminal
liability
● HMRC enjoy 80% success rate in court and best to avoid confrontation
● Advice to notify of claiming an exemption even if applies without a claim (e.g. section 13 TCGA 1992)

19 www.interfis.com
Miscellaneous

● Exchange of information
● Broad exchange of information and transparency measures — Common Reporting
Standard (CRS), the register of persons with significant control (PSC) and the register
of beneficial owners of trusts that have a link with the UK
● Requirement to notify CRS planning to HMRC retrospectively to 2014
● Risk for structures with non-resident parents / UK resident children holding offshore
structures — CRS, corporate residence
● Risk of transfer of foreign income from parents to children
● Cryptoassets
● Many investors with cryptoassets, which they are looking to sell while UK resident
● Best to remain non-resident but beware of the five-year limit
● Uncertainty regarding the location of the assets
● Trading poses more risks than investment

20 www.interfis.com
ALEXANDER COOK
4 STONE BUILDINGS

Corporate Governance: An Overview (1)

• What is corporate governance?
• Sources of corporate governance law:
1. Statute (mainly Companies Act 2006 and Insolvency Act 1986 but also
others, such as the Bribery Act 2010, the Financial Services and Markets
Act 2000)
2. Common law (case law relating to the duties of directors)
3. Other sources (e.g. Corporate Governance Code, UKLA’s Listing Rules and
the FCA’s Remuneration Code)

• Who enforces it?

 ALEXANDER COOK
4 STONE BUILDINGS

Corporate Governance: An Overview (2)

• Recent Trends and Developments:
1. Small Business, Enterprise and Employment Act 2015
2. FCA changes to listing rules
3. Corporate Governance Code 2014

• Redress:
1. Shareholders (shareholder agreements, Articles of Association, CA 2006)
2. Civil liability of directors (e.g. breach of duty, wrongful trading, disqualification)
UK Corporate Governance Regime

Premium Listing (shares)

Companies with a Premium Listing are expected to meet the UK’s highest
standards of regulation and corporate governance.
UK Corporate Governance Comply or explain: key source of corporate governance
Code (the “Code”) recommendations for companies with a premium listing
Listing Rules Companies must make a statement on compliance with the Main
Principles set out in the Code in its annual report and accounts or
explain the reasons for non-compliance
Disclosure and Transparency Allows companies to present a corporate governance statement:
Rules • in the directors' report;
• in annual report and financial statements; or
• on the company's website (with cross-references from the
directors' report).

Belgium | China | France | Germany | Italy | Netherlands | UK | US (Silicon Valley) | fieldfisher.com

23
UK Corporate Governance Regime

Standard Listing (shares and GDRs)

Companies with a Standard Listing of shares or GDRs must comply with EU
minimum standards.
UK Corporate Governance Does not apply.
Code (the “Code”) Compliance is recommended as good practice.
Listing Rules Companies are not required to comply or explain against the Code.

Disclosure and Companies must publish a corporate governance statement

Transparency Rules
detailing corporate governance code it applies and extent to which
they depart from it.
Allows companies to present a corporate governance statement:
• in the directors' report;
• in annual report and financial statements; or
• on the company's website (with cross-references from the
directors' report).

Belgium | China | France | Germany | Italy | Netherlands | UK | US (Silicon Valley) | fieldfisher.com

24
UK Corporate Governance Regime
Pre-IPO:
Requirements and challenges for non-UK companies listing in London
The provisions of the Code are considered to be among the most highgrade
governance standards applied around the world. Compliance with some
provisions can present challenges for non-UK issuers, including:
Structuring an effective board
Prospective non-executive director
Board, managerial and operational independence
Board diversity
Accountability and transparency
“Comply or explain” regime
Heightened investor scrutiny
Relationship agreement (premium listing, majority shareholder scenario)

Belgium | China | France | Germany | Italy | Netherlands | UK | US (Silicon Valley) | fieldfisher.com

25
UK Corporate Governance Regime
Post-IPO:
Continuing obligations
Non-UK as well as UK issuers are subject to continuing obligations imposed by
high standards of the UK Corporate governance regime
The role of the board in effective risk The UK Bribery Act 2010 and its implications for
management and oversight business
Inside information Managing directors’ conflicts

The role of independent adviser Executive Remuneration

Sustainability governance: taking corporate The relationship between directors and

social responsibility on board shareholders: financial communications and
investor relations
Protection for directors and their companies Board evaluation

Belgium | China | France | Germany | Italy | Netherlands | UK | US (Silicon Valley) | fieldfisher.com

26
 Corporate Governance in
Cross-Border M&A and
Joint Ventures
Practical Case Study

English Law Summit, Astana Sergei Ostrovsky

24 April 2018 Partner, Ashurst LLP

Tel: +442078591821
sergei.ostrovsky@ashurst.com
 Cross - border M&A

• English law private M&A vs public M&A and UK Takeover Code: what's the
difference?
• UK Corporate Governance Code: the 'Gold Standard‘
– Applies to all companies listed in London with a Premium listing of
equity shares regardless of whether they are incorporated in the UK
or elsewhere
• In private M&A - period between signing and completion: conduct,
governance, compliance, reputational and risk mitigation
– Elements of management control/governance imposed by an
international strategic buyer: buyer’s representative (observer);
negative control by the buyer (consent, veto); seller’s undertaking to
comply with some of the buyer’s governance policies prior to
completion, etc.
– Risk: buyer as a ‘shadow director’

28
 International Joint Ventures

• International JVs and UK-style corporate governance

– Governance 'benchmarking': what to expect from an international counterparty? What is
reasonable and what is not?
– why: bankability and reputation?
– who are the counterparties?
– what is the JV's business?
– where is the JV incorporated: general law, company's constitution, shareholders'
agreement and corporate governance?
• Provisions sometimes ‘borrowed’ from the Code
– Note the difference: public and private shareholders: whose money invested?
– Effective board: separation of roles (eg chairman vs CEO), independent directors; insurance
– Composition of a board: in a JV ‘entrenched’ directors: in whose interest are they acting?
Diversity; skills; remuneration; code of conduct

29
 These materials are for training purposes only
and are not intended to be a comprehensive
review of all developments in the law and
practice, or to cover all aspects of those
referred to. Please take legal advice before
applying anything contained in these materials
to specific issues or transactions. For more
information please contact the presenters or
your usual contact.

English Law Summit in Kaz slides

© Ashurst 2017
 Criminal Liability of
Companies in the UK
Tanveer Qureshi
Carmelite Chambers
• Companies can be prosecuted

• Range of offences

• Three main techniques:

• Identification Principle

• Vicarious Liability (Act of employees)

• Criminal Liability arising from Statute

 Failure to prevent offences
• Inroad into identification offences

• Strict Liability and therefore avoids Identification Principle

• Enhanced regulation with criminal bite

• Extension of Corporate Manslaughter and Corporate Homicide Act 2007

• “Senior Management” “…played a significant role”

 Control Principle

• Extension and development

• Criminal Finance Act - prevent facilitation of tax evasion

• Jursidction beyond England and Wales

• Future trend with corporate criminal liability

 Specific Defence &
Punishment
• Most offences impose Strict Liability such to concepts such as
“reasonable practicability” e.g Health & Safety

• Reasonable precautions

• Bribery Act - Adequate Procedures

• Officers deemed guilty if company guilty

• Fines, confiscation, compensation orders, ban from tendering, director

disqualification, prison
 Criminal Liability of
Companies in the UK
Tanveer Qureshi
Carmelite Chambers
 ENGLISH LAW SUMMIT – CASE STUDY

Old Gold Mine owned by KazCo (KazCo), not worked for years, thought to have
previously unknown reserves.

KazCo wishes to re-start Mine + requires finance.

New shareholders (Middle East Sovereign Wealth Fund (“Investor A”)) +

Central Asian Restructuring Bank (“Investor B”).

Investors A + B pay $50m for surveys and drilling work on the condition that:

• London Guarantee Bank (“LGB”) issues $50m refund guarantee to Investors

A+B
• Drilling completed by March 2018.
KazCo appoints CHINA-KAZ DRILLING CONTRACTORS (“CKDC”) for
geological survey + drilling services to identify location + quantity of reserves by
March 2018.

Events:

• Feb 2018, Mine collapses.

• KazCo blames CKDC’s negligent drilling; CKDC blames KazCo’s

misrepresentions on ground conditions.

• March 2018 drilling not completed + preliminary survey not obtained.

 Dispute 1: Investors A + B v LGB:

Investors want return of $50m investment and call under Refund Guarantee. LGB refuses
alleging unspecified ‘fraud’. Investors commence arbitration.

Article X: PROPER LAW

The proper law of this Guarantee is the law of the UK, and the Parties submit to the
exclusive jurisdiction of the Courts of the UK and of all Courts having jurisdiction in
appeal from the Courts of the UK.

Article Y: ARBITRATION
All disputes and differences whatsoever which will at any time hereafter arise between the
parties in relation to this Guarantee which the Parties using their best endeavors in good
faith cannot resolve shall be referred to arbitration under the rules of the International
Arbitration Court in London before any legal proceedings are initiated. The arbitration
shall be conducted in the UK in accordance with the provisions of the law in the UK in
effect at the time of the arbitration and shall be conducted by one or more arbitrators
appointed thereunder. The Bank may also choose to bring any claim in the Courts of the
UK.

Investors appoint arbitrator from London Chambers No1 + counsel from same Chambers.
 Dispute 2: LGB v KazCo:

LGB in dispute with KazCo over alleged misrepresentations relating to Refund

Guarantee and other loans. Commences arbitration in relation to loan agreements.

DR Clauses:
"Any dispute arising out of or in connection with this Loan Agreement, including any
question regarding its existence, validity or termination, shall be referred to and
finally resolved by arbitration under the LCIA Rules, which Rules are deemed to
be incorporated by reference into this clause. The number of arbitrators shall be
three. The seat, or legal place, of arbitration shall be Kazakhstan. The language
to be used in the arbitral proceedings shall be Kazakh. The governing law of the
contract shall be the substantive law of England."

LGB appoints arbitrator who was consultant with law firm representing it for 6
months 5 years ago + appointed several times in previous arbitrations by other
parties represented by same firm. LGB and arbitrator fail to tell KazCo.
 Dispute 3: KazCo v CKDC

KazCo wishes to claim for losses arising from Mine collapse.

CKDC counterclaims for misrepresentation relating to the ground conditions.

DR Clause:
English law – arbitration, if any, London according UNCITRAL Rules.

KazCo appoints same arbitrator as in KazCo v LGB arbitrations regarding

Refund Guarantee + loan agreements.
 Appointment of arbitrators -
conflicts and strategy

Andrew STEVENS, Barrister

(Intl. Arbitration & Commercial Disputes)
4 Pump Court Chambers,
London

astevens@4pumpcourt.com
 Arbitrator Challenges: Issues & Motivations

Potential Issues
Same Arbitrator: Appointed by same party many times.
Same Chambers: Arbitrator and Counsel both from the same “chambers".

Potential Motivations
Principle / genuine concern.
Tactics during the arbitration.
An eye on enforcement.

Andrew STEVENS astevens@4pumpcourt.com

Barrister
 Appointment of arbitrators -
conflicts and strategy

Andrew STEVENS, Barrister

(Intl. Arbitration & Commercial Disputes)
4 Pump Court Chambers,
London

astevens@4pumpcourt.com