By Elton Gomes
The UK is suspending its investor visas for the rich. By doing so, the UK will be closing a route to permanent residency and British citizenship that has gained popularity among Russian oligarchs and wealthy Chinese.
The Tier 1 visa program will be suspended from midnight on Friday (December 7) due to reforms that are being designed to tackle money laundering and organized crime, according to a Home Office statement, Bloomberg reported.
Tier 1 visa applicants will now have to provide audits of their financial and business interests and exclude government bonds as a qualifying investment. The freeze will lift once the changes, which are due in 2019, have been put in place.
Tier 1 visas, also known as golden visas, have been criticised for providing oligarchs and the super-rich an easy route into the UK. In July, there was a 46% increase in the number of applicants to the Tier 1 investor visa scheme, wherein more than 400 applications came from wealthy overseas investors.
The changes to the scheme come after a government review of the visa as part of a crackdown on money laundering in the UK. Immigration minister Caroline Nokes said: The UK will always be open to legitimate and genuine investors who are committed to helping our economy and businesses grow. However, I have been clear that we will not tolerate people who do not play by the rules and seek to abuse the system.
That is why I am bringing forward these new measures which will make sure that only genuine investors, who intend to support UK businesses, can benefit from our immigration system, the Guardian reported.
The suspension comes after relations between the UK and Russia sunk to a new low since the Cold War following the poisoning of a former Russian double-agent and his daughter in March.
UK Prime Minister Theresa May retaliated against the attack, which left one civilian dead, by expelling dozens of suspected spies.
What are Tier 1 visas?
Tier 1 visas are visas that provide a faster route for wealthy investors coming from outside the European Union and Switzerland to settle in Britain.
The program was introduced in 2008 to attract wealthy foreign nationals who are able to invest large amounts of capital in Britain. Due to the visa program, billions of pounds have poured into London over the past decade, following an influx of global elites who have benefited from the program. The visa program peaked in 2014, when a total of 1,172 visas were granted.
To qualify, foreign nationals must put down a minimum of 2 million pounds (around $2.5 million) as an investment in Britain.
Such an investment in United Kingdom can be in the form of bonds, share capital, or companies that allow investors to apply for permanent residency within five years.
Who benefits from having Tier 1 visas?
The visa program has been especially popular among Russian oligarchs and wealthy people from China and the United Arab Emirates. Over 1,000 Tier 1 visas were granted in the 12-month period ending in September 2018.
Wealthy Russians to be heavily affected?
Tier 1 visas have been widely condemned by those who believe they leave the UK open to corruption, or that they could be an easy pathway for stolen funds or money laundering through the UK from Russia, China, and the Middle East.
Wealthy Russians are said to be the most affected, considering that Tier 1 visas have been suspended. One such wealthy Russian is Roman Abramovich. Owner of English Premier League team Chelsea FC, Abramovich has had a tough time renewing his Tier 1 visa.
A person close to Abramovich said that his investor visa expired at the end of April, and an application to renew it was taking far longer than usual. This troubled Abramovich particularly because investor visas are initially valid for three years and four months, and are normally extended with ease after that every two years.
The British authorities have not given any explanation for the delay, the person said. This has led to speculation that the British authorities might not allow wealthy Russians like Abramovich through the investor visa route.
If Abramovichs British visa delay turns out to be more than a lapse, it could be a sign that the British government, too, is opposing Russian oligarchs.
Elton Gomes is a staff writer at Qrius