The Court of Appeal has dismissed a bid by the wife of a jailed banker to have the Unexplained Wealth Order made against her discharged.

As a result, a large house in Knightsbridge and a golf course in Berkshire could come on to the market. The two properties have a combined value of over £22m.

Yesterday, the court upheld the earlier decision of the High Court, which refused to discharge the UWO made against Zamira Hajiyeva in 2018 by the National Crime Agency.

The UWO requires Hajiyev to explain how in 2009 she and her husband could afford to buy the £11.5m home near Harrods – where she spent £16m over the course of a decade, including £600,000 in a single day.

The property itself was acquired in 2009 by a company incorporated in the British Virgin Islands.

She is the wife of Azerbaijani banker Jahangir Hajiyev, convicted of fraud and embezzlement.

Sarah Pritchard, director of the National Economic Crime Centre, said: “This is a significant result which is important in establishing Unexplained Wealth Orders as a powerful tool helping us to investigate illicit finance generated in, or flowing through, the UK.

“As a new piece of legislation we anticipated that there would be a legal challenge. We are pleased that the court has upheld the case. It will set a helpful precedent for future UWO cases.”

UWOs allow the National Crime Agency to seize property if they believe that the owner is a Politically Exposed Person (PEP) – someone from outside the European Economic Area who is in a position of power that makes them liable to bribery or corruption – and is unable to explain the source of their wealth.

The case highlights the importance to estate agents under anti-money laundering regulations to carry out enhanced due diligence to identify PEPs and/or their family members.

Enhanced due diligence must be carried out by agents even where the person concerned has ceased to be involved with a public function. Such due diligence is a requirement for at least 12 months afterwards.

John Dobson, chief executive of AML compliance firm SmartSearch, said: “The property market has increasingly been targeted by money launderers. High-value transactions  are particularly attractive as they enable large quantities of dirty cash to be ‘washed’ through seemingly legitimate channels in one go.

“This ought to have been picked up at the time but nowadays those involved in the transaction would have nowhere to hide. The regulations require banks, accountants, estate agents and conveyancers not just to verify the ID of transacting parties but to screen them against Sanction and PEP lists.

“Where there is a positive match, they are under an obligation to carry out enhanced due diligence and report any suspicions to the relevant authorities.”

However, he said that too many firms are continuing to rely on old-fashioned document checks and “in many cases simply turning a blind eye to illicit activity that can support terrorism, people-trafficking, drugs cartels, or the luxurious lifestyles of corrupt businessmen and their families”.