Russian and Chinese dirty money propping up the London property market?

[Warlord]

Came across this interesting article in Wired Magazine:

How the golden visa scheme let Russian money pour into the UK
 

Greed and loopholes made London the world’s capital of dirty money and dark influence

Quote

In 2018, in retaliation for the Novichok poisoning of Sergei and Yulia Skripal in Salisbury, the Home Office promised to review the visas of 700 Russian expats. These Russian citizens, who came to Britain between 2008 and 2015, had benefited from the Tier 1 visa programme – a route to residency – also known as “golden visas” – for wealthy foreigners willing to invest millions of pounds in the UK.

Now, despite several changes in the years following the poisoning, the Intelligence and Security Committee's report into Russian activity in the UK has once again recommended the scheme’s overhaul. It claims that the Tier 1 scheme, and similar previous schemes stretching back to the early 90s, turned London into a “laundromat” for corrupt foreign money, and cemented Russian influence in the UK’s business and social scene as the “new normal”. It is likely, the report states, that such a move would at this point only constitute “damage limitation”.

The golden visa programme was introduced in 2008, along with other reforms to the immigration system, to simplify routes to residency and citizenship in the UK. At the time, the stated aim of this programme was to “boost the UK's economy by attracting and retaining the ‘brightest and best’ workers or business people.” Qualifying was straightforward. Foreign nationals had to invest a minimum of £1 million (raised to £2m in November 2014) in the UK – in bonds, share capital or companies. With a £2m investment, they could apply to settle within five years; with £5m, the wait reduced to three years; with £10m, it was just two years.

Between 2008 and 2015, just over 3,000 individuals came through the scheme, peaking in 2014, in which 1,172 visas were granted. Twenty-three per cent (705) of the people granted residency during that period were Russian. Transparency International, a non-profit that investigates global corruption, labels this a “blind faith" period.

“We found out, through our research and investigation back in 2015, that when someone would apply for a visa, the Home Office would grant the visa before the money had been invested through a UK bank,” says Rachel Davies, head of advocacy at Transparency International. “They would just trust that the banks would do their normal anti-money laundering due diligence that they have to do under law.” It turned out that the banks didn't. They trusted the fact that the Home Office had granted the person a visa; they didn't check the money either.

Though no list of Russian figures who have benefited from this scheme has been released, there have been high profile examples. Roman Abramovich, the owner of Chelsea football club, is probably the most famous – he secured Israeli citizenship after the UK government failed to renew his visa in 2018.

A conservative estimate of the amount of money from Russian actors that flooded into the UK during this period is £729m, though Davies emphasises that it's likely much higher than that. Not all the Russians that have used the scheme are linked to criminality and corruption, but those who are and managed to slip through the net represent a threat on two levels: money laundering and political influence.

The former is a worldwide problem – the Global Financial Integrity, a research authority, estimated that in 2012 around £54 billion of illicit wealth was moved out of China and around £6.2bn from Russia. Three years later, in 2015, China’s central bank estimated that £82bn of suspected corrupt wealth was laundered out of the country every year, while the Central Bank of Russia said the annual outflows of illicit money from Russia could be as high as £31bn. The UK's National Crime Agency estimates that £100bn in “dirty money” is funnelled into the UK each year, mainly from Russia, Nigeria, Pakistan and the Far East.

This has provided dirty money with a safe haven. “Imagine someone who is in Russia or China, and they are involved in illegal activities – let's say drug trafficking,” says Alina Tryfonidou, a professor of law at the University of Reading. “The scheme actually provides an opportunity for them to both use the money in some way, and then also to have the chance to move somewhere else if they feel they're going to be caught in their country of nationality.”

This investment generates a second problem: political capital. Since the 90s, the Intelligence and Security Committee's report says that Russian citizens with close links to Russian president Vladimir Putin invested in building influence across a wide swathe of the British establishment – PR firms, charities, academic and cultural institutions, contributing to a “reputation laundering” process. And with British citizenship came the right to donate to British political parties. “Some of them will be totally legit, and some of them will have links to Putin or corruption or criminality,” says Davies. “And they may now be citizens of the UK, hobnobbing with politicians, sending their kids to the same private schools, moving in their circles and having influence in the UK.”

 

More:

https://www.wired.co.uk/article/russia-report-golden-visas

 

Edited July 31, 2020 by Warlord

[stop_the_craziness]

Thanks for this.  When I was explaining to my mum the other day that the London property market was an enormous money-laundering scheme she asked me if I also believe the earth is flat.  Ordinary people really, really do not believe that this sort of stuff goes on.

[Warlord]

24 minutes ago, stop_the_craziness said:

Thanks for this.  When I was explaining to my mum the other day that the London property market was an enormous money-laundering scheme she asked me if I also believe the earth is flat.  Ordinary people really, really do not believe that this sort of stuff goes on.

Ha!

Send her the link! 

[dougless]

And ordinary people think the Tories are fiscally responsible.

[spyguy]

19 minutes ago, dougless said:

And ordinary people think the Tories are fiscally responsible.

2008.

Labour.

Conservatives were slightly better at raising races in foriegn residents.

Non domiciled status needs scrapping.

Ban on purchasing UK real estate from opaque / hidden trusts.

5% yearly  tax on all real estate owned by nin national.

 

[NoHPCinTheUK]

Why would a rich chap buy a property in London? 
I mean, there are plenty of other cities around the world where you can do it. Why not Switzerland? 
Because somewhere else, they want you money and they want you to live there. Here, we have been selling assets with a 5% return pa. 
 
Big small difference. 

[NoHPCinTheUK]

https://www.investorsinproperty.com/news/2018-10-23/buying-a-property-in-switzerland-what-you-need-to-know
 

Foreigners may only buy a residential property in a touristic area. So unless you are Swiss, or hold a Swiss Residence Permit, you cannot buy a property in Geneva, Basel, Zurich, Zug or any of the other cities in Switzerland. Foreigners are allowed to buy chalets and apartments in most Swiss ski resorts as these are in tourist areas.

Foreigners are able to buy in ski resorts in Cantons Bern, Graubünden, Obwalden, Uri, Vaud & Valais.
 

and 

 

You cannot buy a property in the name of a company in Switzerland.

 

and 

 

 
More recently, the Lex Weber (the Weber Law) has prevented any building permits being granted for second homes in any communes where second homes already make up 20% of the property stock. Therefore, generally speaking, it is not possible to buy newbuild properties in Switzerland.
 

 

[NoHPCinTheUK]

The Swiss make money, don’t ask for it to foreigners. 

[Switch625]

16 minutes ago, Neapolitan said:

Why would a rich chap buy a property in London? 
I mean, there are plenty of other cities around the world where you can do it. Why not Switzerland? 
Because somewhere else, they want you money and they want you to live there. Here, we have been selling assets with a 5% return pa. 
 
Big small difference. 

Because we are the world's launderer for dirty money?

[NoHPCinTheUK]

2 minutes ago, Switch625 said:

Because we are the world's launderer for dirty money?

Same as Lux, Switzerland and Monaco. 
 

In those country you bring your money and your interests there. You can’t just inflate the bubble and wait for someone else to pay +25% a flat you’ve never seen. 

[Warlord]

1 minute ago, Neapolitan said:

Same as Lux, Switzerland and Monaco. 
 

In those country you bring your money and your interests there. You can’t just inflate the bubble and wait for someone else to pay +25% a flat you’ve never seen. 

This article and report is about London not the others.  Stop trying with your misdirection, troll.

 

[NoHPCinTheUK]

Just now, Warlord said:

This article and report is about London not the others.  Stop trying with your misdirection, troll.

 

What you didn’t get about my posts? My question is still there. Why would a rich Russian/Chinese park his money here and not in Monaco, Zurich, Paris? 
 

Because what is allowed here is forbidden there. Read my link about Switzerland. 
I have heard of empty flats owned by someone in HK who have never set foot in this country.

[Society of fools]

I do remember at the time of the Skripal poisoning there was a discussion on the BBC World Service where the BBC  journalist was asking a City of London financial expert if there was any way that Russia could be "punished" for its egregious behaviour. 

The BBC journalist suggested that one way to get the message through to Moscow might be to prohibit Russians citizens or their connected corporations from buying British real estate. 

The instant, almost panicky rejoinder from the financial expert was to respond "That would be just cutting off our nose to spite our face". 

I laughed out loud. 

[Blink]

Foreign investors.

HMOs.

Money Laundering.

Three reasons why true Londoners have been gerrymandered out of the city. The biggest  unspoken scandal of our times.

[MARTINX9]

A number of countries don’t allow foreign nationals to buy freehold property and existing homes. Some don’t even allow you to buy anything including new build apartments. China being one such nation.

That way your land and your country continues to belong to your own people who have a stake in the Country and a loyalty to it.

If you sell your nation and it’s land to the highest bidder it’s no longer yours.

 

[Simhadri]

Meanwhile more benefits 

https://www.express.co.uk/news/politics/1316702/nicola-sturgeon-news-scotland-ubi-Universal-Basic-Income-SNP-latest-economy

This means that couples under 65 would receive an annual payment of £6,240 whilst families of four (2 adults, 2 children) would receive £13,520 per year.

[Mikhail Liebenstein]

8 hours ago, Simhadri said:

Meanwhile more benefits 

https://www.express.co.uk/news/politics/1316702/nicola-sturgeon-news-scotland-ubi-Universal-Basic-Income-SNP-latest-economy

This means that couples under 65 would receive an annual payment of £6,240 whilst families of four (2 adults, 2 children) would receive £13,520 per year.

UBI is probably a good idea now, and could be part paid for by a big tax on landlords.

Edited August 1, 2020 by Mikhail Liebenstein

[Simhadri]

53 minutes ago, Mikhail Liebenstein said:

UBI is probably a good idea now, and could be part paid for by a big tax on landlords.

and further big tax on stock market gains too.

[spyguy]

12 hours ago, Society of fools said:

I do remember at the time of the Skripal poisoning there was a discussion on the BBC World Service where the BBC  journalist was asking a City of London financial expert if there was any way that Russia could be "punished" for its egregious behaviour. 

The BBC journalist suggested that one way to get the message through to Moscow might be to prohibit Russians citizens or their connected corporations from buying British real estate. 

The instant, almost panicky rejoinder from the financial expert was to respond "That would be just cutting off our nose to spite our face". 

I laughed out loud. 

London EA != Financial expert.

Golden visa was pure Mandleslime/greedy Blair policy.

Theres a hefty negative cost to dealing with dodgy foreigners esp. ones from countries not on good terms with US.

US have weaponise the dollar /dollar trade in recent years. Bit of 'because it can' bit of 'good for the world' - as the US sees it.

The UK is fully on board now

https://www.theguardian.com/law/2020/jul/06/magnitsky-sanctions-who-are-those-being-targeted-by-uk

Shows how upside the UK is that a Con government brings something like this into the law, whilst Labour created lots of of dodgy scams for dodgy people.

[longgone]

1 hour ago, Mikhail Liebenstein said:

UBI is probably a good idea now, and could be part paid for by a big tax on landlords.

A direct payment from landlord to tenants Would be good, HMO tenants could be on to a windfall. 6 tenants in one house all getting 80 quid a week each , that's one happy home.

[Mikhail Liebenstein]

1 minute ago, longgone said:

A direct payment from landlord to tenants Would be good, HMO tenants could be on to a windfall. 6 tenants in one house all getting 80 quid a week each , that's one happy home.

Yes, perhaps this could be known as reverse rent. As we know all landlords enjoy providing a service, so how can they possibly say no.

[Mikhail Liebenstein]

48 minutes ago, Simhadri said:

and further big tax on stock market gains too.

That’s called Capital Gains Tax.

 

[longgone]

1 minute ago, Mikhail Liebenstein said:

Yes, perhaps this could be known as reverse rent. As we know all landlords enjoy providing a service, so how can they possibly say no.

Indeed they do say they are providing Homes for those less fortunate, it's their time to shine now.

Could call it the happy hmo scheme.

[shlomo]

1 hour ago, spyguy said:

London EA != Financial expert.

Golden visa was pure Mandleslime/greedy Blair policy.

Theres a hefty negative cost to dealing with dodgy foreigners esp. ones from countries not on good terms with US.

US have weaponise the dollar /dollar trade in recent years. Bit of 'because it can' bit of 'good for the world' - as the US sees it.

The UK is fully on board now

https://www.theguardian.com/law/2020/jul/06/magnitsky-sanctions-who-are-those-being-targeted-by-uk

Shows how upside the UK is that a Con government brings something like this into the law, whilst Labour created lots of of dodgy scams for dodgy people.

But is anything going to be done, it is just words so far.

[Warlord]

1 hour ago, spyguy said:

Golden visa was pure Mandleslime/greedy Blair policy.

 

Correct. 2007/2008 when Brown was at his peak and he could do no wrong.

Most of our ills can be traced back to New Labour.  I know I bang on about but it's sincerely  true and we must remind the younger generation of this important fact.

Never forget!

 

Edited August 1, 2020 by Warlord