Over the years, the UK has rewarded high levels of foreign investment in the country with residence permits – without looking at whether it was money laundering. Now these “golden visas” are to be abolished.

It’s a small step, a declaration—finally. The British government wants to remove the so-called “golden visa”. So far, anyone who invests two million pounds in Great Britain can obtain a residence permit – the right to live in the country and bring up a family. This visa is temporary but can be converted into an unlimited title.

Christophe Procelli
ARD-Studio London

This rule was introduced in 2008 by the Labor government to attract investment in the country. Between 2008 and 2015, 6,312 of these visas were issued, approximately 700 to Russian nationals. In 2015, the rules were tightened. But uncertainty remains: who was brought into the country with which investment? Related investigation is on. Report will be presented soon.

Government responds to allegations

From 2015, investors were required to provide proof of UK account and people were subject to criminal record checks. In the coming week, the Interior Ministry apparently wants to introduce a law that would completely eliminate visas for investors. The government is responding to allegations that it is not doing enough to combat money laundering and promote transparency in investment in the UK.

Example: Investors invest money through foreign companies. “It’s an important point,” says Tom Keatinge, director of the White Collar Crime Institute for Russian think tank. So much property in the UK is owned by XY Company in Belize or the British Virgin Islands. Who benefits? Appropriate rules to replace this should not be presented until autumn.

Like the reform of the commercial register. As of now anyone can enter there company under any fantasy name. Names are not checked. “In the new legislative proposal it will be important to design the commercial register in such a way that the data is scrutinized,” Keating said. As of now, the law does not provide for this.

America fears shortcomings

Seizing Russian money in London is not so easy. There are city tours that pass through the luxurious mansions of Russian citizens. But a lot of money should not be visible at all, which America has clearly criticized. The government in Washington fears that more sanctions should be imposed in London.

Transparency International estimates that the Russians have invested around €1.8 billion in the UK for money laundering links to the Kremlin. 28 percent of them are in the center of power – in real estate in the District of Westminster. More than 2000 companies involved in corruption and money laundering are affected – with an investment volume of more than 96 billion euros.