What is the ‘UK Golden Visa’?
The Tier 1 Investor Visa, also popularly known as a Golden Visa, was introduced by the Uk in 2008 as a way to encourage wealthy investors to move to the United Kingdom. The visa itself was seen as a ‘fast track’ method of gaining U.K. residency and, subsequently, citizenship, based on the applicants investing power in UK-based businesses.
The introduction of the Golden Visa was seen as controversial for some, as anyone with tremendous assets and wealth could apply for the visa and buy their way into residency.
To apply for the Golden Visa, the applicant must be above 18 years of age and have complete ownership over the necessary assets and wealth on whose claim they are applying on. They must also be able to prove that their wealth has been earned by legal means and that they plan to use their investments for the public good. Investors must shell out at least 750,000 pounds to be considered for the Golden Visa. They must also be free of any criminal background.
Though the initial stay period under the visa is two years, applicants can apply for a ‘leave to remain’ extension, for which they must follow all immigration laws and rules during their stay in the United Kingdom. They must also wholly follow through on their promise to invest and continue investing at the same level throughout their stay.
To be considered for permanent residency, applicants must maintain at least 2 million pounds worth in an investment fund in a U.K. bank account.
What are Russian Oligarchs?
The term Oligarch typically refers to a ruler in an Oligarchy, which is a form of government where a select number of wealthy individuals have control over a country. The term also specifically refers to a number of wealthy Russian individuals who accumulated wealth following the fall of the Soviet Union and still have a considerable amount of political influence.
These Oligarchs are open supporters of the Russian government’s violent policies and are known to use their wealth to fund military operations and other questionable activities, such as helping fund the invasion of Ukraine. The U.S. took a stance against these influential people, implementing blocking statutes on their foreign properties, yachts, and other assets. The U.K. followed suit, imposing their own sanctions on a list of 18 Russian businessmen with a combined wealth of over 30 billion pounds- out of which eight were found to be holders of the Golden Visa. It has since added many more individuals to its sanctions list.
How the U.K. Golden Visa benefits Russian Oligarchs
Russian Oligarchs have no end of riches and assets. They use their massive wealth to spread their influence and power over Russia, and sometimes even beyond the Russian borders.
After the Russian attack on Ukraine, the U.S. and U.K. set out to incapacitate the Russian government by sanctioning influential government authorities, organizations, and these wealthy Oligarchs. Many Oligarchs were found to be funding the Russian military and providing them with the means to buy devastating tanks, missiles, and other weapons.
Known for their political and criminal connections, Oligarchs also participate in rampant money laundering to dispose of and conceal the origins of illegally-got funds in their coffers. The U.S. put sanctions on some of the biggest Oligarchs in order to put an end to their terror-funding regime.
However, many Oligarchs used their influence and power to escape Russia and evade sanctions. Many of these individuals own property and yachts in other countries, including the U.S. and U.K., where they fled to take refuge in the war and weight of sanction-after-sanction. This is where the UK Golden Visa comes in.
Since 2008, the United Kingdom has granted over 2,581 Golden Visas to Russian Citizens, which makes up almost half of all Golden Visas issued til late. The Golden Visa has become a convenient way for Oligarchs to pour their extra wealth into legal bonds and provide them with a way to live in the U.K. where they can escape from the jurisdiction of U.S. sanctions on Russia.
Through the Golden Visa scheme, many Oligarchs were able to invest in and obtain permanent residency in the U.K. This is not the first time when Golden Visa is surrounded by controversies. Even Chinese Underground Banking was the conduit of laundering dirty proceeds to the UK and then obtaining UK Golden Visa. Many Golden Visa holders used this to their advantage and fled to the U.K. amidst the height of the war to escape the consequences of their actions.
What has the U.K. done to reform the scheme?
The U.K. Home Office initially reviewed all Russian Golden Visa applications from 2008-2015 after an incident involving Russian military intelligence agent Sergei Skripal, which caused tension between the two countries. However, did not take much further action on the matter, only declaring in 2019 that applicants must compulsorily have a bank account in the U.K. to be considered.
What, in fact, did push the HoemOffice to take action was the onset of the Russia-Ukraine war, prompting them to halt their acceptance of new applications for the UK Golden visa scheme. The program has since then been altogether scrapped in order to stop ‘corrupt individuals’ from making their way into the U.K. and put a stop to the exploitation of the immigration system. Instead, they will now focus on a new and improved investor route to the points-based immigration process that will help select genuine investors willing to fund innovative business in the country, rather than use the system as just an easy way to gain U.K. citizenship.
Following suit, the European Commission issued a statement asking all countries to similarly end their Golden Visa and Passport schemes and suspend all Russian visas with immediate effect to prevent infiltration by Oligarchs and other sanctioned individuals.
Conclusion
Though the U.K. rolled out its Golden Visa scheme to promote foreign investment in its innovative and upcoming businesses, the scheme backfired when it inadvertently helped provide British citizenship to many wealthy Russian Oligarchs. In fact, Russians were found to benefit the most from the scheme, with almost half of the visas being granted to wealthy Russian business people.
This, in turn, helped increase Russian influence in the U.K., and helped provide Oligarchs with a safe refuge after the rest of the world, including the U.K., began to slap sanctions on them for their undue behavior and excessive terror funding.
In response to finding out that eight of 18 individuals on their sanctions list were holders of the UK Golden Visa, the government decided to do away with the UK Golden Visa scheme entirely and revoke all Russians’ visas. They are currently working on reforming their investor immigration schemes to prevent a repeat of the extensive abuse of the system by wealthy Russians and to provide a fair chance to other genuine investors.
Other countries have made similar efforts to weed out these Oligarchs and punish them for their crimes, like the U.S. Department of Justice’s TaskForce KleptoCapture.
