In an effort to battle money laundering and other financial crimes, the UK will suspend its Tier 1 “Golden Visa” as of December 7th until it puts in place more stringent rules and requirements in 2019.
As reported by The Guardian, these new requirements will call for “applicants to provide comprehensive audits of their financial and business interests, and show they have had control of the £2m of investment funds required to obtain the tier 1 visa for at least two years.”
Additionally, people interested in this visa scheme “will no longer be able to invest in government bonds as part of the reforms, and must invest in active and trading UK companies.”
In 2018 alone, close to one thousand individuals benefited from the UK’s golden visa.
Furthermore, according to The Guardian, “more than 400 very wealthy overseas investors applied for tier 1 investor visas in the year to 31 March, a 46% increase on the number of applicants in the previous 12 months.”
This visa has been particularly popular with wealthy Russian, Chinese and UAE nationals and has added close to 500 million Euros to the country’s coffers according to Transparency International.
The UK’s Minister of Immigration, Caroline Nokes, said, “The UK will always be open to legitimate and genuine investors who are committed to helping our economy and businesses grow. However, I have been clear that we will not tolerate people who do not play by the rules and seek to abuse the system.”
“That is why I am bringing forward these new measures which will make sure that only genuine investors, who intend to support UK businesses, can benefit from our immigration system,” she added.
This move stems from growing tensions between the UK and Russia following the attempted assassination of Russian double agent Sergei Skripal and his daughter in the UK and Primer Minister Theresa May’s expulsion of dozens of alleged Russian spies in the country.
Criticism Abounds Towards the UK’s Tier 1 Golden Visa
As explained by the New York Times, back in 2014, the UK government’s Migration Advisory Committee heavily criticized the visa scheme, suggesting that it “brought limited economic benefits because most of the investors had bought fixed-interest loan securities known as gilts, meaning that they were effectively loaning the government money instead of investing in the country.”
Additionally, anti-corruption activists and NGOs opposed the golden visa as it has the potential of bringing into the country illicitly gained money.
In a statement following the suspension’s announcement, Duncan Hames, Transparency International’s Director of Policy, said, “Property and other high-end sectors are increasingly accused of allowing dirty money into the UK but it's astonishing to think that the UK's own visa scheme can be used to launder corrupt money into the UK. Once obtained 'Golden' visas can also open the door to channel much larger sums of stolen cash into our financial system.”
“Any individuals found by this review to have brought suspicious money into the UK should be subject to police investigation into the provenance of all their UK assets,” he added.
Furthermore, Ava Lee, Anti-Corruption Campaigner at Global Witness, views this suspension as a “step forward in preventing the corruption risks inherent in these schemes,” but believes that “until the rest of the Commonwealth follows suit, visa-free access to the UK is still very much for sale to anyone with a lot of cash to spare.”
However, industry experts believe the Tier 1 Golden Visa is a good and legitimate option for individuals looking to invest in the UK.
As reported by the Financial Times, Nicolas Rollason, who leads the immigration team at Kingsley Napley, showed his support for this visa scheme as a “good route for legitimate investors.”
“Any improvements to scheme which prevent those seeking to bring in ill-gotten gains is welcome, as it will hopefully restore credibility to the visa category and show that the UK remains open to these families,” he added.