Independent Researcher

Abstract.

This suggests that similar patterns can be observed across all EU and Five Eyes countries.

This article questions the underlying legal and policy rationale for this “freezing” – what in many cases may be more aptly dubbed a form of “seizing”of assets – the attempts to investigate the assets, and the process by which they may be reoriented or redirected in both the US and the UK. It examines domestic sanctions, anti-money laundering legislation, unexplained wealth ordinances, and civil asset forfeiture laws for their potential, to some or most degree, to be used to uncover and freeze foreign ill-gotten gains. Based on ample existing evidence of corrupt practices and ill-gotten gains on the part of Iran’s political leadership “where relatives have often had more wealth than their legally sources of income” it is the position of this study that neither system, U.S. nor Switzerland, have the appropriate legal channels for the appropriated wealth to enter into much needed public works projects. It then makes recommendations on how to remedy the absence of such a legal framework, suggesting the Foreign Illicit Enrichment and Asset Accountability Act (FIEAA), which would grant new powers for investigation; a reverse onus clause for high-risk PEPs; and a civil forfeiture clause for unaccounted for or illicit wealth obtained by PEPs. The article concludes that Iranian, or other country’s, assets confiscated or frozen due to alleged securities violations must be protected by non-partisan legal channels to ensure that the use of such funds goes to support public service, particularly the NHS and programs assisting Iranian victims or families of victims of conflicts associated with Iran rather than individual politicians. The benefit of this approach is that it could put anti-corruption, human rights and national security incentives along the same path as well as produce concrete benefits for the local population.

1. Introduction

Freezing the assets of foreign officials has for much time been one of the signifying features of western foreign policy, especially in regard to nations engaged in large scale human-rights abuses, rabid corruption, and/or regional destabilization. Iran has perhaps become the most publicized contemporary example, facing decades of U.K. and U.S. sanctions specifically targeting its government, banks, and collaborators (UK Government 2024; OFAC 2024). In fact, interest has more recently shifted from officials themselves to the role of their families, who often seem to serve as guardians to offshore wealth obtained through what cutting describes as ‘ill-gotten gains’. They have significant resources of family members, who, perhaps ironically, often live in or study/work in western countries, and hold significant funds that appear disconnected from any form of legal earning and are thus, arguably, in the scope for a stronger anti-money laundering attention (Transparency International,2022; Iran International, 2023).

These sanctions are under the Sanctions and Anti- Money Laundering Act 2018 (SAMLA) and overseen by the Office of Financial Sanctions Implementation (OFSI) in the UK. In the U.S., the Office of Foreign Assets Control (OFAC) is in charge of enforcing sanctions via executive order as well as other statutes that include the International Emergency Economic Powers Act (IEEPA) statute and terrorism, proliferation, and human rights acts. Both allow for freezing the assets of named individuals and entities, including cases in which family members are believed to be utilized to evade sanctions (HM Treasury 2025 ; OFAC 2024) . But, both of these jurisdictions currently seem to regard asset freezes as temporary preventative measures rather than an avenue for confiscation and public-benefit distribution.

The research presented herein poses three overarching questions. To begin with, what are the existing legal structures which regulate the freezing of the assets of Iranian officials’ families in the UK and the U.S.? Second, common unrealistic patterns of illicit enrichment in Iran, how could such systems be enhanced to probe and perhaps acquire unaccounted wealth? Third, what might be done with the funds seized to help bolster national civil services, specifically supporting the National Health Service in the U.K, and veterans benefits in the U.S.A.? Examining these comparatively and suggesting that integrating suggestions from the global practice on anti-corruption we might need new laws to turn frozen assets into assets for the public good.

2. Existing Legal Frameworks for Asset Freezing

2.1 The United Kingdom

The UK’s sanctions regime is primarily set up through the SANCTIONS AND ANTI- MONEY LAUNDERING ACT 2018 which gives ministers the power to impose asset freezes, travel bans and other sanctions on individuals. Asset freezes “sort of prevent you from dealing, rather than block you from dealing” with funds or economic resources that are in the control or possession of a designated person, and compliance guidance is provided and the U.K. Sanctions List is maintained by OFSI. Family members where they are believed to be complicit in maintaining or hiding the assets of the sanctioned official can also be added . As a recent example, “associates” and “controllers” of assets have been very explicitly included in new UK regulations on “human-rights sanctions” who can be targeted by sanctions if they are suspected to be facilitating evasion of other sanctions (HM Treasury, 2025). Further, the Senior Courts Act 1981 gives the English court’s extensive power to grant worldwide freezing orders that will restrain an asset anywhere in the world (Pinsent Masons, 2024). These have oftentimes been used for corruption and fraud cases and could possibly be suited for foreign PEPs where the origin of wealth is not explained in any legal or credible way.

Also, the U.K. has an innovative, albeit according to some reports as yet underused, legislative tool under the Criminal Finances Act 2017 known as “Unexplained Wealth Orders” (UWOs). UWOs can be obtained if an NCA officer believes that funds are “probably” linked to criminal behavior or they are connected to a politically exposed person from a corruption-risk jurisdiction (NCA, 2020). It could be said that the families of Iranian officials fit precisely this profile, with their wealth being large, rapid, and dramatically inconsistent with declared earnings . Much abused as the UWOs have been procedurally – with high- profile examples of failed prosecutions – nevertheless UWOs stand as an instrument which might uncover what could be the illicit source of the wealth of Iranian elite (WilmerHale, 2024).

2.2 The United States

The US approach to sanctions perhaps even more executive led than the U.K. IEEPA and presidential executive orders enable OFAC to enforce comprehensive sanctions, including various measures against “the Government of Iran, the Islamic Revolution Mostazafan Foundation, the Islamic Revolutionary Guard Corps, other persons involved in proliferation activities, or in acts of terrorism or human rights abuses” (OFAC, 2024; U.S. Department of the Treasury, 2023). Those who offer other forms of support or “material support”, those acting on behalf of sanctioned entities, or participating in evasion networks may all also be designated by OFAC (Al Jazeera, 2022). This seems like a convenient way to let family members in when they are acting as a channel for wealth.

Unlike the UK, but, the U.S. does not have an analog to UWOs, and civil forfeiture of unexplained wealth of foreign political elites appears to rely on either an identified underlying crime or a categorization under anti-terrorism laws (U.S. Department of Justice 2020). The U.S. has attempted to innovate in some particular instances, by freezing Iranian or North Korean assets to help pay for judgements to victims of terrorism, but these methods are ad hoc and have already been the subject of numerous lawsuits (Berkeley Journal of International Law, 2022). Though recent recommendations regarding Russian assets have spurred a call for more comprehensive legislative reform, as of now a comprehensive framework is in place (Reuters, 2024; Carnegie Endowment, 2025).

The comparative analysis therefore shows that while both jurisdictions have the ability to freeze assets, neither has the ability to quickly liquidate those assets as funds for the public good without additional legislation. This is a major shortcoming of the legal system.

3. Illicit Enrichment and Asset Concealment among Iranian Elites

Transparency International (2022) and Iran International (2023) both have extensive evidence linking Iranian officials and their families to systematic illicit enrichment greater than what their official salaries would allow them to collect. Corruption in state institutions, vast portions of the economy controlled by the Revolutionary Guard, and widespread rent seeking seem to be conducive factors that allow for the accumulations of wealth through illegitimate means. Most of this wealth is rumored to be offshored to places where elite families can invest in real estate, luxury goods and financial instruments through shell companies, nominees, and elaborate trust, that same wealth but is reportedly supporting an anemic domestic economy with a corrosive, expanding informal sector instead of creating alternative economic drivers and employment.

Even more common are the children of Iranian officials “oversized beneficiaries reflected in high value assets located in London, U.A.E, Canada, and various U.S Cities”(Atlantic Council, 2024). The vast majority are unable to earn the kinds of salaries that might support multi-million pound property portfolios whilst being students. Their resources are therefore a questionable target for AML observation. Both AML models in the UK and US rely on the inability to show the provenance of funds as a reason for investigation and, in civil matters, forfeiture. This seems to be in line with broader trends in fighting corruption among kleptocratic elites in Russia, Nigeria, Venezuela, and China (OECD, 2019; Côté, 2021).

And based on this, it could be argued that Iranian elites’ wealth in the UK and the U.S. could constitute a sort of legally and morally acceptable target for this kind of transparency and fiscal capture, under due process considerations. The next section of this report sets out the level of the law, proposing a model laws to fill in the gaps in current law.

4. The Foreign Illicit Enrichment and Asset Accountability Act (FIEAA)

Because current UK and US law is framed around freezing rather than repurposing assets, the ISVG proposes the Foreign Illicit Enrichment and Asset Accountability Act (FIEAA). This would setup a clear process for the investigation, seizure and forfeiture of the assets of high risk foreign politically exposed persons and family members unable to explain the legitimate source of their wealth.

4.1 Key Provisions of FIEAA

Increased Unexplained Wealth Powers . With respect to the UK this could mean the implementation of UWOs as a requirement for foreign PEPs holding in the country over £500,000 of unexplained property. In the U.S. this would require a federal UWO style mechanism allowing investigators to request source of funds information without having to have proof of predicate crimes. These would fill what seems to be an important enforcement gap in both countries.

Reverse Burden of Proof for High-Risk PEPs. In such circumstance, if a prima facie case of the amount of assets were to be disproportionate to legal earnings would be demonstrated, the onus would then lie to the asset holder to prove that he legally received his assets. Such reverse onus provisions already exist under the UK Proceeds of Crime Act 2002, anti-corruption legislation in Italy and France (Côté, 2021) . These measures are seen to be in line with human rights standards when proportionately implemented under judicial review (UNODC, 2021).

Automated Frozen Pending Investigation. As soon as a FIEAA inquiry is initiated, assets would be frozen for the purpose of preserving them from flight or misappropriation. This again follows the current OFSI and OFAC practice but would be explicitly related to pathways to confiscation and thus help bridge the gap between temporary restraint and permanent loss.

Civil Forfeiture and In Rem Jurisdiction. Assets would be seized from the respondent and “gated” to the state via a preponderance of evidence standard, meaning the respondent would not be able to prove a legitimate source of funds. This would act as a sort of alternative to the major obstacles presented by attempts to use criminal measures to address foreign bribery cases, which have difficulties in terms of evidence and over jurisdictional issues that have come to be understood as insurmountable (Kerr, 2020).

Public-Benefit Restitution Funds. The captured assets would be placed in a general fund. In the case of the UK, this money would go to the National Health Service making up for the massive shortfall, to help reduce the waiting times and to invest in the infrastructure of healthcare that is so lacking. In the U.S., funds would go to programs for military personnel and veterans affected by operations in Iran.

4.2 Legal Rationale

From a legal perspective, the proposed FIEAA framework appears to be consistent to some of the legal instruments and principles that are already in place. Among those there are the obligations imposed by the United Nations Convention against Corruption (UNCAC), which promotes the criminalization of illicit enrichment and the establishment of mechanisms for recovery of assets (UNODC, 2021) . Nor would the framework conflict with ECHR Protocol 1 Article 1, which allows deprivation of property in the public interest so long as it is proportionate . For the U.S., such guarantees would be in compliance with due process under the Fifth Amendment of the Constitution ( Berkeley Journal of International Law, 2022). Crucially, non-discrimination would be maintained, as the legislation would be aimed at unexplained wealth rather than national identity so.

4.3 Ethical and Policy Justification

But, it could be argued that having vast amounts of money channeled into public services from illicit funds that came from overseas may benefit more than just the simple social policy of providing the services. Two, it makes sanctions more legitimate as they will be able to show direct results and not just the freezing of assets. Second, it would benefit domestic populations via enhanced public services. Third it would act as a deterrent to global kleptocracy by sending a message that Western jurisdictions will not provide sanctuaries for ill- gotten gains. Fourth, it would connect anti-corruption enforcement to social welfare in a way that made it more politically sustainable. These explanations seem broadly in line with mainstream international anti-corruption policies (OECD, 2019; Crisis Group, 2023).

5. Repurposing Confiscated Assets for UK and US Civil Services

5.1 The benefits to the National Health Service

The NHS is grappling with funding shortfalls, investment in infrastructure, and has a staffing crisis. Converted funds could eventually do all of these things: modernize hospitals and equipment, take care of waiting lists, bring more mental-health services, provide programs that would help retain staff. Such a policy would mirror current practice in the UK, which re-invests assets seized through criminal confiscation to fund community policing and law-enforcement programs in general, and, thus, would set a precedent for how forfeited assets should be used to serve a public purpose.

5.2 U.S. Military Personnel Benefits

Iran-backed militia in “proxy” wars have injured and killed American casualties. Accessing frozen assets for veteran healthcare, disability compensation, and family support programs could parallel the U.S. Victims of State-Sponsored Terrorism Fund. Such a distribution could be seen as a form of restorative justice wherein funds aimed at the support of victims of Iranian- related activities from monies acquired inappropriately.

5.3 International examples

The political decision to freeze and potentially re-appropriate either sovereign or elite pilfered Russian wealth as a result of the 2022 Ukrainian invasion suggests a growing acceptance of the political motivation behind converting stolen wealth belonging to a foreign nation for redistributive purposes (BBC News 2025; Carnegie Endowment 2025). The legal and diplomatic hurdles to this project are enormous, but these debates provide a model and perhaps some of the political will to consider approaching Iranian elite resources in similar ways. The European Parliament has also been active in exploring the legality of such developments, leading to some hint of the direction of international agreement on these policies (European Parliament, 2021).

6. Conclusion

In this paper, I have discussed the cases of each country in which they currently implement asset freezes on family members of Iranian officials, highlighted what appears to be a gap in the existing regimes, and have offered a new legal regime described as FIEAA, that would respond to illicit enrichment and allow for reallocation of that wealth. Iranian elites, as well as their families, are often deemed to have wealth not in line with their honest earnings and therefore arguably fit candidates for special monitoring. Under a framework that married the civil forfeiture, the judicial safeguards and the enhanced Unexplained Wealth Order, both countries both countries stand the chance of dispossessing foreign, illicit, wealth and applying it to essential public resources.

This type of spending directly in the NHS and U.S. veteran support programs would not only enhance domestic welfare systems, it would also help to reinforce the validity of sanctions policy. It must be noted that this call for an inclusive population based definition would face momentous legal, diplomatic and practical hurdles. Future research should attempt to measure the volume of capital that Iran’s elites have abroad, as well as explore potential avenues for coordinating internationally around antikleptocracy measures. But, this model creates an ethic that finds a way, on a principled basis, to use frozen assets from a passive barrier to something that could be channeled for the public good.

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