LONDON (Parliament Politics Magazine) – What is the value of Russian currency in the United Kingdom?
Many rich individuals and firms from Russia and other countries invest legally in the UK financial and real estate markets.
However, the anti-corruption organisation Transparency International has discovered that Russians accused of financial crime or with ties to the Kremlin own at least £1.5 billion in UK property.
According to a Home Office assessment, the UK has witnessed “a large volume of Russian, or Russian-linked illegal finance” spent on items such as luxury real estate, automobiles, and school fees, as well as gifts to cultural institutions that allow people to “launder their reputation.”
When it comes to property, which can be owned by corporations rather than individuals, information can be difficult to come by. Only four of the 94,000 homes where the registered legal owner is an overseas business are identified as being owned by Russian corporations, according to the Overseas Company Ownership database for England and Wales.
However, it’s feasible that Russians may eventually possess a large number of properties purchased through corporations registered in places like the British Virgin Islands (BVI).
Alexei Chepa, a Russian politician and businessman, used a BVI company to purchase a 10-bedroom property in Holland Park in 2011 and sold it for £25 million last year. “The acquisition would have followed absolutely the proper process as advised at the time,” his representatives said.
In October 2021, a large leak of about 12 million documents known as the Pandora Papers revealed the extent to which these offshore entities are used.
It revealed hidden wealth, tax evasion, and money laundering by some of the world’s wealthiest and most powerful people.
Researchers discovered that Russian citizens owned 5% of the offshore corporations that held UK properties, which totaled over 700.
Why is the United Kingdom so appealing to Russian investors?
For wealthy Russians, London has always been a favoured place for settling down or purchasing property and assets.
Tier 1 (Investor) visa scheme, the UK’s “golden visa,” provided residency to individuals wealthy enough to invest £2 million or more in the country.
The visa holders, along with their families, were entitled to seek permanent residency in the UK. The speed with which they could apply was determined by the magnitude of their investment:
- With £10 million, you have two years.
- Three years, £5 million
- With £2 million over five years
Since the initiative began in 2008, the Home Office has given 2,581 investor visas to Russian citizens.
The government cancelled it on February 17, 2022, in response to mounting pressure over the UK’s ties to Russia.
On the London Stock Exchange, Russian enterprises have also been able to raise huge amount of money through share sales.
En+ Group, an energy company, was one of the beneficiaries. The corporation was controlled by Oleg Deripaska, a close associate of Russian President Vladimir Putin, at the time of its first public offering.
In 2018, a House of Commons committee urged the government to remedy “gaps in the sanctions framework” that permitted En+ to float on the London Stock Exchange.
