Increasingly, high net worth individuals are being targeted as part of a worldwide clamping down by law enforcement agencies for potential corruption.
Rebecca Hill writes for IFA Magazine, published 4 September 2023.
For wealthy clients who conduct complex financial dealings overseas multiple jurisdictions are likely to be involved. Increasingly, clients might just find themselves subject to extradition requests for allegations of white collar crime.
In this article for IFA Magazine, Rebecca Hill, a barrister in the extradition team at 5 St Andrew’s Hill provides expert legal insight into the common pitfalls that ultra high net worth clients can sometimes fall into when conducting business overseas, what makes them a target to law enforcement agencies and what to look out for.
On 14th June 2023 Zhang LI, the billionaire CEO of Chinese Developer Guangzhou R&F Properties Co Ltd consented to his extradition to the United States to face trial for offences relating to the bribery of public officials. Having consented, Mr Zhang Li is awaiting the Secretary of State’s extradition order before he is summarily removed to the United States.
Mr Zhang Li was arrested on a provisional extradition request (unsupported by full documentation). He is one of a growing number who find themselves so detained following 2020 changes to the UK law which expanded the use of provisional requests to allow individuals to be arrested and detained pursuant to Interpol Red Notices (the exact basis for Mr Li’s arrest is unclear from press reports.) These changes presently apply to limited specified countries, namely Australia, Canada, Iceland, Lichtenstein, New Zealand, Norway, Switzerland and the US but there is potential for them to be expanded more widely at the discretion of the Government.
The UK’s move to expand powers to arrest without traditional safeguards is reflective of increased international co-operation designed to address growth in trans-national criminality emanating from globalisation and digitalisation. In May 2023 the European Union announced a new EU network against corruption to address the commitment made by President von der Leyer to take decisive action to fight corruption internationally. In 2022 Interpol launched its ‘Financial Crime and Anti-Corruption Centre’ (IFCACC) with the express aim of providing a ‘coordinated global response against the exponential growth in transnational crime’. In parallel it has revisited the possibility of introducing a ‘Silver Notice’ to its armoury by which it aims to trace and recover criminal assets. It is apparent that the international community is taking these issues seriously and is acting upon its rhetoric.
In addition to this growing international cooperation, in recent years many States (including the UK, Australia and Switzerland) have fortified their criminal laws relating to corruption and bribery by introducing offences for corporates who fail to prevent their representatives committing bribery on their behalf. The UK definition of bribery involves the offer, promise or gift of a financial or other advantage intended to induce improper performance of a relevant function or activity. Although other jurisdictions’ definitions will vary, the mischief addressed is broadly the same. As will be apparent, the definition is wide (deliberately so) and has the potential to ‘bite’ in a wide spectrum of circumstances involving individual and corporate actors. This shift to extend criminal consequences places additional responsibilities (and risks) upon Directors.
A third facet to the international community’s action against bribery, corruption and white-collar crime is the willingness of certain States to exercise their jurisdiction widely and to investigate (and prosecute conduct) outside their borders. Anecdotally, extradition practitioners in England and Wales have
reported a notable increase in the number of United States’ requests in particular (often for international financial crime) with very little nexus to the US. Examples include frauds perpetrated entirely from the UK where one of many (international) victims was based in the US and international corporate supply of ‘legal highs’ (from Europe to multiple jurisdictions) where a test purchase was made from the US.
The combined effect of widened criminal jurisdictions in multiple States and increasing international cooperation is to materially increase the exposure (and thus risk) of investigative overreach and criminal measures for High Net Worth individuals who live and work across borders In addition to extradition requests, individuals targeted by international criminal investigations may find their travel impeded by Interpol diffusions and Red Notices and increasingly their assets frozen through the use of account freezing executed through mutual legal assistance.
High Net Worth individuals are rightly concerned in this context as to how they might best protect their positions. The truth is, there is no absolute protection. If individuals are aware of proceedings against them then advice should be sought swiftly to identify and challenge any Red Notices or diffusions and to ensure finances are in order. However, it is frequently the case that the first an individual learns of the interest of law-enforcement is upon their arrest. Extra vigilance is therefore advised when travelling generally, and in particular when visiting or transiting through the United Kingdom for any individual who is engaged in disputes, regardless of where those disputes are founded.
Rebecca Hill is a leading practitioner in extradition and international crime who has worked at the forefront of this niche area for more than a decade. Rebecca’s significant expertise in human rights and European law complements her public law practice in which she represents individuals in challenges against the State and the Government. She regularly acts in cases of the utmost gravity before all levels of Court including the Divisional and Administrative Court and the European Court of Human Rights. Rebecca is ranked in Chambers and Partners as a band 2 leader in the field of Extradition at the London Bar and is also ranked in tier 2 in The Legal 500.