Second Russian Oligarchs Empire in London

Eaton Square is also known as Red Square by Russian residents in London
Credit: ANDY RAIN/EPA-EFE/REX/Shutterstock

LONDON, (Parliament Politics Magazine) – A long-overdue conversation about Russian Oligarchs Empire in London has been sparked by Vladimir Putin’s recent attack on Ukraine. After two decades of allegedly supporting Putin’s leadership, London has earned the title “Londongrad”. There was an enormous worldwide outcry against Putin’s dictatorship during the invasion of Ukraine. 

Due to this, the United Kingdom is now looking upon its many Russian billionaire communities with some shame. It’s now possible to put into action things that were unthinkable only a month ago.

How did Britain become the Oligarch’s Playground?

In the 1950s, a small Birmingham bank named Midland helped establish Britain’s image as a haven for overseas money. After the 1929 Wall Street crash, governments decided to strengthen cross-border money regulations. Capital controls put restrictions on foreign currency exchange and foreign property ownership. The Exchange Control Act of 1947 was passed into law when the British Empire was on extinction. Making it seem like London’s days as the global financial hub was over.

Officially hostile to the US government, they want to retain their money in dollars. The Dollar had overtaken the pound sterling as the world’s reserve currency in 2009. Soviet diplomats and officials have been able to deposit covert money in British bank accounts. Money movement restrictions got placed to avert global financial risk.

London-The City of Secret Money

By the early 1960s, the City of London had a mountain of dollars. “Eurodollars” refers to monies that evaded “onshore” scrutiny.

Other nations joined in, but the UK remained the offshore industry’s hub. It happened because, First, English law demanded substantial property rights. Secondly, a few forgotten nooks of Britain’s West Indies were preparing to dominate the offshore world at that time, with the blessing of Westminster.

mansion Russian oligarch Oleg Deripaska in Belgravia, London
Credit: REUTERS/Peter Nicholls

After a period of preserving and “offshoring” private money, Russian oligarchs empire in London, who had significantly benefited from the demise of communism, chose to stay.

Authoritarian leaders could more readily reject democratic demands because they could depend on a well-insulated, rich elite backing as global disparity grew. Using the offshore skills of London and its chain of foreign affiliates, Putin constructed his power structure.

Government Targeting the Russian Oligarchs Empire in London

The Mayor of London, Sadiq Khan, urges the government to seize the assets of more billionaires linked to Vladimir Putin. Economic Crime Bill, which had been languishing in a back office for years, was finally brought to parliament. Requiring foreign firms to disclose who could have a concealed interest in their property.

It’s been decades since the UK government has taken such harsh measures against financial assets. But the seizure of assets today does not explain why Russian billionaires initially opted to reside in London over anywhere else. 

During the last half-century, the United Kingdom has established itself as the leading centre for offshore wealth transfer. In the 1960s, the United States, Britain’s closest friend, worried for the country’s future.

According to Dean Acheson, the United Kingdom had “lost a kingdom and still hasn’t recovered a role”. Acheson misunderstood the extent of British capitalism’s legal and financial foundations across the globe. 

As launderette replaced the country’s former role as “manufacturer of the world”, Britain no longer had any territories. They started accepting black money from different countries and turning it into white money before redistributing it to new offshore locations.


The seizure of assets wounded Putin at home, but the UK must do more to lose its reputation as an access point to the offshore world. Of course, Russian riches aren’t the only issue. Many wealthy people from throughout the world have made London their second home.

However, if Russia’s invasion of Ukraine fades from the headlines, it is unclear if the Economic Crime Bill will get implemented. Britain might compel its foreign colonies to fix tax avoidance schemes and abolish secrecy. It may also eliminate the non-dom rule that exempts UK residents from paying tax on overseas assets or income.

It shouldn’t have required a catastrophe like the Ukraine conflict for the UK to confront its past as the offshore world’s hub. We can’t wait for another catastrophe tied to London’s riches to make progress.

Beth Malcolm

Beth Malcolm is Scottish based Journalist at Heriot-Watt University studying French and British Sign Language. She is originally from the north west of England but is living in Edinburgh to complete her studies.