UK urged to suspend ‘golden visas’ after fast tracking of Russian millionaires

Ministers face calls this weekend to publish an investigation into how more than 700 Russian millionaires were fast-tracked for British residency via a “golden visa” scheme exposed for lax checks on illicit funds.

The government said six months ago that it was finalising its report into tier 1 investor visas granted to the super-rich from several countries, including Russia, China and Kazakhstan, because of concerns over “dirty money”. It now faces calls to suspend the golden visa programme until the review is published.

Under the scheme, launched in 2008, applicants provide a minimum investment of £2m in exchange for the right to live in Britain. They can later apply for full citizenship and a passport.

The Liberal Democrat peer Lord Wallace has tabled an amendment to the nationality and borders bill in the House of Lords, requiring the scheme to be halted until the review is published.

He said: “It’s claimed we are a great global country, but we are behaving like Cyprus and Malta by selling residency.”

Britain faces criticism over claims it has failed to properly monitor the billions of pounds of Russian money which has flowed into London over the past two decades.

A report by the Center for American Progress, a think tank close to the Biden administration, warned last week that “stronger action” against money laundering was required from the UK, which had become a main hub for Russian oligarchs and their wealth. It said more effective action would be required from the UK in the event of tough sanctions against Russia over the Ukraine crisis.

The government has promoted its golden visa scheme around the world over the last decade. Campaigners highlighted that the government was creating a “hostile environment” for illegal immigrants at the same time as selling residency to the super-rich.

The controversial programme came under scrutiny after the Russian state was blamed for the novichok poisoning of Sergei and Yulia Skripal in Salisbury in March 2018. Transparency International warned that the scheme had been “wide open” to abuse by corrupt individuals because of the very limited checks that had been carried out on the source of their wealth.

It was revealed six months after the Salisbury attacks that the government was conducting a review of golden visas handed out between June 2008 and April 2015. It was reported at the time that officials were scrutinising more than 3,000 visas, including more than 700 handed to Russians. There are also hundreds of dependants of successful visa applicants who have been permitted into the country under the scheme. It was reported last year more than 6,300 visas are now under review.

New reforms to the scheme were announced in March 2019, including better checks on the source of funds and the requirement for an applicant to have a UK bank account.

A report by the charity Spotlight on Corruption, called Red Carpet for Dirty Money, was published in July last year and warned of continuing weakness in the golden visa regime, which it said relied too heavily on financial institutions to conduct anti-money-laundering and due diligence checks. Susan Hawley, executive director of the charity, said: “We know Russia has wanted to infiltrate people in the UK and this has been a very easy route to do that. They must be laughing up their sleeves that this country is such an easy touch in allowing people in without proper checks. The government needs to urgently publish its review into the scheme and we need an independent audit of whether it meets its original purposes and whether it is fair.”

Ministers were warned by parliament’s intelligence and security committee report on Russia in July 2020 about risks of the golden visa scheme. It said London had become a popular destination for Russian oligarchs and the key to London’s appeal was “the exploitation of the UK’s investor visa scheme”.

The report said: “The UK welcomed Russian money, and few questions – if any – were asked about the provenance of this considerable wealth…What is now clear is that it offered ideal mechanisms by which illicit finance could be recycled through what has been referred to as the London laundromat.”

John Penrose, the Conservative MP and the government’s anti-corruption champion, is among those pushing for more state action against illicit finance. He accused the government last week of stalling on an economic crime bill that would have exposed the owners of shell companies used to buy British property and introduced new reforms for Companies House.

He warned Putin would “be looking for any signs of weakness that we aren’t serious about threats to sanction his oligarchs.”

A Home Office spokesperson said: “We reformed the tier 1 visa route in 2015 and in 2019 to crack down on dirty money and we have not ruled out making further changes.

“These changes have included requiring banks to confirm they have completed all due diligence checks prior to opening accounts and increasing the requirements for applicants to provide evidence of the source of their funds.”