U.K. sus­pends visa pro­gram for su­per rich in crack­down

The Daily Star (Lebanon) - - BUSINESS - By Tom Met­calf, Alex Mo­rales and Neil Cal­lanan

The U.K. is sus­pend­ing its in­vestor visas for the rich, clos­ing a route to per­ma­nent res­i­dence and Bri­tish cit­i­zen­ship that’s pop­u­lar with Rus­sian oli­garchs and wealthy Chi­nese.

The pro­gram will be sus­pended from mid­night Fri­day ahead of re­forms de­signed to tackle money laun­der­ing and or­ga­nized crime, ac­cord­ing to a Home Of­fice state­ment. They re­quire ap­pli­cants to pro­vide au­dits of their fi­nan­cial and busi­ness in­ter­ests and ex­clude gov­ern­ment bonds as a qual­i­fy­ing in­vest­ment. The freeze will lift once the changes, due in 2019, have been put in place.

The sus­pen­sion comes after re­la­tions be­tween the U.K. and Rus­sia sunk to their low­est ebb since the Cold War fol­low­ing the poi­son­ing of a former Rus­sian dou­ble-agent and his daugh­ter in March.

Prime Min­is­ter Theresa May re­tal­i­ated against the at­tack, which left one civil­ian dead, by ex­pelling dozens of sus­pected spies. Rus­sian ty­coon Ro­man Abramovich was among those caught up in the ten­sion, and the Bri­tish gov­ern­ment failed to re­new his visa. He has since re­ceived Is­raeli cit­i­zen­ship.

May said ear­lier this year that the gov­ern­ment was re­view­ing the pro­gram after Labour Party law­maker Yvette Cooper ques­tioned the ori­gin of money from 700 Rus­sians who have been granted the visas. The num­ber of ap­pli­cants fell sharply in 2015 after the gov­ern­ment in­tro­duced new anti-money laun­der­ing due dili­gence checks and dou­bled the min­i­mum in­vest­ment for the per­mit to 2 mil­lion pounds ($2.6 mil­lion).

The visa is open to those from out­side the Euro­pean Eco­nomic Area and Switzer­land. Chi­nese in­vestors have in­creas­ingly turned to the visas in re­cent years, mak­ing up al­most 50 per­cent of ap­pli­cants in the third quar­ter, ac­cord­ing to data com­piled by fi­nan­cial ser­vices firm Shard Cap­i­tal Part­ners LLP.

Gov­ern­ment-backed im­mi­gra­tion pro­grams aren’t un­com­mon in other parts of the world. The U.S. has an im­mi­gra­tion pro­gram, known as the EB-5 visa, that lets im­mi­grants who cre­ate jobs in the coun­try stay per­ma­nently. Por­tu­gal has a so-called golden visa pro­gram that al­lows for­eign in­di­vid­u­als to buy prop­erty val­ued at 500,000 eu­ros ($567,000) or more in re­turn for res­i­dency.

The U.K.’s move could ham­per peo­ple world­wide, but Rus­sian oli­garchs may be most af­fected by the changes. The U.K. has long been a par­tic­u­larly ap­peal­ing ju­ris­dic­tion for ul­tra­rich Rus­sians as a safe and sta­ble place to do busi­ness, hold their wealth and ed­u­cate their chil­dren, so much so that the city has been nick­named Lon­don­grad. But the sus­pen­sion is the lat­est sign that such ap­peal may be fad­ing after the gov­ern­ment crack­down in the wake of the poi­son­ing on Bri­tish soil.

“We will not tol­er­ate peo­ple who do not play by the rules and seek to abuse the sys­tem,” Im­mi­gra­tion Min­is­ter Caro­line Nokes said in the state­ment. The new mea­sures “will make sure that only gen­uine in­vestors, who in­tend to sup­port U.K. busi­nesses, can ben­e­fit from our im­mi­gra­tion sys­tem.”

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