UK’s ‘golden visa scheme’ suspended

The UK is to suspend its top tier investor visa scheme, as part of a drive to crack down on organised crime and money laundering.

Tier 1 ‘golden visas’ are currently offered to non-EU residents over three years entry in return for £2 million investment in UK bonds, share capital or loan capital in UK companies. They can then apply to settle permanently after two years if they invest more than £10 million.

Around 1,000 applications for tier 1 investor visas were granted last year, but as London has increasingly become the capital of the super-rich, “the government has been concerned by the provenance of some of the wealth” flooding into the country reports Reuters.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

“Golden visas have been widely condemned by those who believe they leave the UK open to corruption or stolen funds being laundered through the UK from Russia, China and the Middle East,” says Sky News.

In July, figures showed a 46% increase in the number of applicants to the scheme, with more than 400 applications from wealthy overseas investors, reports the South China Morning Post.

Russian and Chinese investors make up the vast majority of applications. However, The National says “critics have pointed out that more than 90% of all applications have been successful, indicating that checks were not sufficient to vet incomers”.

In a well-publicised case, Russian oligarch Roman Abramovich, owner of Chelsea football club and friend of Russian President Vladimir Putin, withdrew his golden visa application earlier this year as relations between the two countries went south over the Salisbury spy poisoning.

The UK scheme is one of 13 lightly regulated schemes operated by EU member states that have led to 100,000 new residents and more than 6,000 new citizens, according to anti-corruption campaigners Transparency International.

The group said the UK’s golden visa scheme has been the fourth most lucrative, netting the UK some €498 million. Spain has earned nearly double that. Cyprus, which has been criticised for selling citizenship, has netted nearly €5bn.

Global Witness has conducted a two-year investigation these schemes and raised major concerns about their abuse by criminals and shady businessmen, while outlining how they enable corruption.

Ava Lee, Anti-Corruption Campaigner at Global Witness said: “It is shameful that the UK government has sold residency to the super wealthy in return for an investment which they give back with interest, while missing their targets for providing unaccompanied child refugees with safe asylum.”

In a bid to crackdown on wealthy investors gaming the system, the Immigration Minister Caroline Nokes has now brought forward new measures which she says “will make sure that only genuine investors, who intend to support UK businesses, can benefit from our immigration system”.

From midnight tonight, applicants seeking to invest in the UK will have to provide comprehensive audits of all their financial and business interests, and prove they have control over the investment needed.

While welcoming in the “step forward in preventing the corruption risks inherent in these schemes” Lee warned that “until the rest of the Commonwealth follows suit, visa-free access to the UK is still very much for sale to anyone with a lot of cash to spare.”

In September the National Crime Agency, which tackles serious and organised crime, announced it too was stepping up efforts to tackle dirty money funneling into or through the UK.

Part of this new crackdown involves the use of Unexplained Wealth Orders (UWOs), one means by which the assets of corrupt “politically exposed persons” or those with links to serious crime can be seized.

In October, the wife of a jailed Azeri banker became the first person targeted with a UWO after authorities seized property worth about £22m.