Despite Donald J Trump’s best efforts to appease the Kremlin, relations could not be any worse between Russia and the West. The full reach of Moscow’s meddling is obvious from the fact that Arron Banks, Brexit’s bankroller, has rather nefarious historical connections to Russian officials in London and is probably in Putin’s pocket just like Trump. After the recent nerve agent attacks on the Skripals in Salisbury, big Russian money is not welcome on the UK’s shores anymore. Russia is often described as an “absolute kleptocracy” where the political elite is rampantly plundering public wealth. For example, British parliamentarians who have authored Moscow’s Gold: Russian Corruption in the UK strictly believe that “turning a blind eye to London’s role in hiding the proceeds of Kremlin-connected corruption risks signalling that the UK is not serious about confronting the full spectrum of President Putin’s offensive measures.” Naturally, some casualties must follow from the Russian side and Roman Abramovich – the business tycoon who owns Chelsea Football Club – found himself standing in the crossfire. Abramovich’s problems with his Tier 1 (Investor) visa inspired him to obtain an Israeli passport under the 1950 law of return which allows people of the Jewish faith to return to the Jewish state but only at the cost of extreme marginalisation of indigenous Palestinian Arabs, more than 700,000 of whom were collectively expelled from their homes in 1948 alone.
Downing Street instantaneously clarified that Israel’s move to grant Roman Abramovich citizenship does not grant him immunity from UK immigration controls and that he would not be entitled to work in the UK or remain in the country for more than six months. The heightened level of scrutiny now applied by UKVI inevitably means that Russians are no longer in the running for investor visas. New candidates must fill in the gap so as to maintain the vibrancy of the investor route or otherwise it will become a relic of a failed immigration policy that sought to reduce migration but ended up becoming violent towards its own citizens. The relevant rules under the points-based system explain that the route is for high net worth individuals (HNWI) making a substantial financial investment in securities in the UK. However, you do not need to be a Russian oligarch with a football club to apply as an investor and £2,000,000 (£2 million) in investment funds is all that is needed to score the 75 points to obtain an investor visa. The funds must be invested in UK government bonds, share capital or loan capital in active and trading UK registered companies.
Rates of return in government bonds are low but my due diligence shows that privately issued secure bonds can yield annual returns of up to 12 per cent – paid in monthly 1 per cent increments – which means that an investment of £2,000,000 will mature into £3,200,000 (£3.2 million) after five years. Applicants in the investor category must be 18 or over, have opened a UK bank account and they must be able to prove possession of the funds which must be disposable in the UK. Since the £2,000,000 that is to be invested is a large sum of money, to provide comfort to applicants it is not expected of them that they should be able to prove their English language skills or show any other evidence of maintenance funding that is mandatory for other Tier 1 applicants. Successful applicants are granted entry clearance for a period of three years and four months. Limited switching is permitted into the investor route from within other points-based system (PBS) categories within Tier 1, Tier 2 and Tier 4.
Leave to remain is granted for two years to those HNWI who were last granted leave as Tier 1 (Investor) migrants and for three years to any other applicant. Investors are allowed to work in the UK but there is no obligation on them to do so. Normally, with an investment of £2,000,000 a person would be entitled to settlement after five years. But accelerated settlement routes exist. Those who have invested £5,000,000 (£5 million) can achieve ILR/settlement in three years and those who have invested £10,000,000 (£10 million) can obtain ILR/settlement in two years. A dependent partner – i.e. a spouse or a civil partner or an unmarried partner where cohabitation is ongoing for two years – and any dependent children under the age of 18 at the time of the initial application are able to accompany the main investor applicant.
Despite new powers for enforcement authorities to pursue unexplained wealth orders, too much aggression with the Russian oligarchy is likely to backfire because unlike Russia, the English legal system can be used to inflict humiliating defeats on the government of the day. The picture of Russia presented in Moscow’s Gold in general and of the Kremlin in particular is also intriguing in light of the news that Kirill Shamalov’s split from president Putin’s daughter Katerina Tikhonova, because of his affair with the glamorous London based socialite Zhanna Volkova, has cost the Russian businessman half of his £1.2 billion fortune.
Betraying Putin is a costly affair and Abramovich’s expanding fortune of £12 billion and trouble free existence in Russia demonstrate that he is probably just another one of Putin’s cronies who is being cheeky with the British state by pretending that his new Israeli citizenship can allow him to circumvent the UK’s complex system of immigration law. But equally if Abramovich’s investor visa is under consideration in Russia then it is probably the case that his passport is in the UK’s possession and the poor chap was unable to travel outside the country without first withdrawing his application. What the hell?
Under Appendix V of the Immigration Rules, a non-visa national means a person who does not require a visit visa under Appendix 2 to the visitor rules. An Israeli passport is no doubt helpful to Abramovich because as of 21 November 2016, regular visitors to the UK from Israel have been eligible to apply to join the UK’s Registered Traveller Service which provides approved members, who have undergone advanced security checks an expedited clearance through the UK border. The service costs money and it best serves business-people and Israelis who travel to the UK frequently. Vetted and registered persons from Israel can thus:
- service available in 10 UK airports, plus Eurostar terminals;
- enter UK border through e-Passport gates or the UK/EU passport lane and do not need to fill in a landing card.
But paradoxically despite such close ties to the UK, Israelis are nevertheless counted among those untrustworthy persons (citizens of other countries in the Middle East and states such as China, Russia) who must register with the police in the UK if they wish to remain here for more than six months. Downing Street greeted the news of Abramovich’s Israeli citizenship by clarifying that:
Those with Israeli passports are non-visa nationals, which means they do not need a visa to come to the UK as a visitor for a maximum period of six months. Israelis are required to obtain a visa if they want to live, work or study in the UK.
Yet visa free entry to the UK still allows the Russian tycoon to do a great many things and in any event as a business visitor he can:
- attend meetings, conferences, seminars, interviews;
- give a one-off or short series of talks and speeches provided these are not organised as commercial events and will not make a profit for the organiser;
- negotiate and sign deals and contracts;
- attend trade fairs, for promotional work only, provided the visitor is not directly selling;
- carry out site visits and inspections;
- gather information for their employment overseas;
- be briefed on the requirements of a UK based customer, provided any work for the customer is done outside of the UK.
Equally, under the terms of the rules established for business and corporate intra-corporate activities, an employee of an overseas based company may (i) advise and consult, (ii) trouble-shoot, (iii) provide training, and (iv) share skills and knowledge on a specific internal project with UK employees of the same corporate group, provided no work is carried out directly with clients.
However, nothing can guarantee Abramovich entry into the UK on his Israeli passport. Indeed, he can be refused admission if he fails to establish that he is a “genuine visitor”. For example, if he intends to indulge in espionage or other activity for the Kremlin and is discovered then he will most certainly have to return to Israel or Russia if he is not prosecuted in the UK. Or maybe the billionaire’s punishment can be to go and live on his $500,000,000 yacht the Eclipse. Perhaps Putin, Trump and Kim Jong-un can join him.
London is, and has always been, the global financial elite’s playground. For example, there have been no recorded sales in the Shard – an exclusive development for the superrich owned by Qatar – because the minimum asking price for a property is £50,000,000 (£50 million) and the owners do not want to sell for anything less than that because it would drive down the price of all the remaining units in the building. However, the Shard’s acclaimed Italian architect, Renzo Piano, has defended his building because it provides a great many poor people with employment. Piano, who has also designed international airports and grand churches, claims that his profligate projects like the Shard support the economy and generate employment for workers during and after completion.
Overall, the situation is such that unknown sums of foreign money are neatly tucked away in the London property market because prices tend to double every seven years in prime locations such as South Kensington and other choice localities. Even though the Tier 1 (Investor) route does not permit property investment it is nevertheless possible to invest in property in addition to the £2,000,000 that must be held in securities. So people who invest, for example, an additional £2,000,000 in property for their own residential purposes for the five years that they will spend in the UK as investors can not only reap the rewards of interest on their investment, they can also earn a large sum of money by virtue of the 100 per cent appreciation in their residential property (or any additional property that they buy). But of course, with Brexit the UK is looking less attractive as an investment destination because of looming economic uncertainty. Moreover, some analysis also suggests that buy-to-let landlords are selling off their property portfolios because of the removal of lucrative reliefs that previously permitted them to deduct payments such as mortgage interest and maintenance costs from profits. Such trends are likely to undermine the buoyancy of the property market.
Interestingly, EU member states such as Latvia are leading the way in offering citizenship by investment programme which only requires a €65,000 investment in equities to pave the way for Latvian citizenship after five years’ residence. Be that as it may, nothing else comes close to matching the type of money which the global elite has made by simply storing their money in the London property market. But as the Grenfell Tower tragedy so clearly shows, London presents a tale of two cities where dirty foreign money is worshiped but the lives of the local poor are worth nothing. In reality, the levels of oppression in London are so severe that the city is just a stone’s throw from becoming something out of Putin’s Russia.