December 17, 2018 10:04AM

Proving Your Wealth Is “Legitimate”

This story from WAPO sent a chill down my spine:

Until quite recently, Zamira Hajiyeva was living the high life, according to British authorities. She had a $15 million townhouse in London’s tony Knightsbridge neighborhood, a golf club in the English countryside and a gold‐​plated shopping habit at Harrods.

That was before a British court this year asked the 55‐​year‐​old from Azerbaijan an impertinent question: How did she afford those purchases?

That query is at the heart of a bold British push to try to reverse what the government believes is a flood of foreign investment stemming from overseas corruption and criminality.

In other words, the U.K. is shifting the burden of proof onto foreign investors; they must now prove their wealth is legitimate.

No doubt, some foreign investestments into the U.K., U.S., and elsewhere are attempts to launder ill‐​gotten gains.

But the slippery slope implications of the U.K.‘s new approach are terrifying.

To start, governments can expand this “presumption of guilt” to its own citizens, not just foreign investors. Can you prove all your wealth is from legitimate sources? Unless you have kept scrupulous records your entire life, probably not. And even if you can, doing so is likely an accounting and legal nightmare.

And where would this presumption of guilt stop? Will we someday have to prove we do not use outlawed drugs?

The presumption of innocence is fundamental to a free society. The U.K. is playing with fire.