Russian money in London
Russian money in London is the flow of capital from Russia to the United Kingdom since the dissolution of the Soviet Union which has had a noticeable impact on the London economy. Colloquially the impact of the capital flow is referred to as "Londongrad" and "Moscow-on-Thames".[1]
History
[edit]Russian money has been prevalent in London since the dissolution of the Soviet Union in 1991,[1] following which many Russian oligarchs sought to invest their wealth in other countries.[2] British Government policy encouraged the flow of foreign capital into the United Kingdom, for example through the foreign investor visa routes, introduced during John Major's premiership in 1994, one-fifth of whose recipients since 2008 are Russian citizens.[1] Additional funds flow to British overseas territories, commonly used as tax havens, such as the Cayman Islands and British Virgin Islands.[3] The concept[which?] is commonly associated with the terms "Londongrad" and "Moscow-on-Thames".[1]
Over £27bn is invested by Russian citizens in the United Kingdom.[3] Amongst the investments are Premier League football clubs, Scottish country estates, and the Evening Standard.[4] Tate art institution was supported by Viktor Vekselberg and Peter Aven.[5] Alexander Mamut invested £100m to Waterstones bookstore chain after acquiring it in 2011 for £53m. According to its managing director James Daunt, the intervention saved Waterstones, which managed to make its first annual profit since 2008 in 2016.[6] He later remarked that continued Russian ownership would've been "catastrophic" for the chain in 2022.[7]
According to Transparency International, at least £1.5bn is invested into UK property by Russians "accused of financial crime or with links to the Kremlin".[8] In 2018, following the poisoning of Sergei and Yulia Skripal, a report titled "Moscow's Gold: Russian Corruption in the UK" was published by the Foreign Affairs Committee.[9] In 2020, the Intelligence and Security Committee said that the influence of Russian business was so deeply embedded in the British financial system that it "cannot be untangled".[3][10]
Following the 2022 Russian invasion of Ukraine there was a political desire to take action against UK-based oligarchs. Unexplained wealth orders are expected to be better enforced and foreign investor routes[which?] scrapped. The Economic Crime Bill was also revived and it includes a register to improve transparency of ultimate land ownership, currently obscured through the use of shell companies.[11] Reuters reported that some Russian citizens have been making ownership changes and consulting lawyers to shield their assets.[3]
See also
[edit]- Russian oligarchs § Russian oligarchs in London
- History of Russia (1991–present)#"Shock therapy"
- Russians in the United Kingdom
- Shock doctrine
References
[edit]- ^ a b c d "The rise and fall of Londongrad". The Economist. 5 March 2022. Archived from the original on 6 March 2022. Retrieved 6 March 2022.
- ^ Guriev, Sergei (Winter 2005). "The Role of Oligarchs in Russian Capitalism". Journal of Economic Perspectives. 19 (1): 131–150. Retrieved 15 May 2024.
- ^ a b c d Macaskill, Andrew; Belton, Catherine (28 February 2022). "Londongrad tries to kick its 30-year Russian money habit". Reuters. Archived from the original on 2022-03-01. Retrieved 2022-03-06.
- ^ "Five things we learned about Russians in the UK". BBC Radio 4. Retrieved 17 July 2022.
- ^ Sweeney, Mark (14 March 2022). "Tate galleries cut ties with sanctioned billionaires after Ukraine invasion". The Guardian.
- ^ Flood, Alison (26 April 2018). "Waterstones bookshops bought by hedge fund Elliott Advisors". The Guardian.
- ^ Johnston, Ian (17 April 2022). "Waterstones turns new page as custodian of independent bookselling". Financial Times. Archived from the original on 17 April 2022.
- ^ "Ukraine crisis: How much Russian money is there in the UK?". BBC News. 11 March 2022.
- ^ "Moscow's Gold: Russian Corruption in the UK" (PDF). House of Commons Foreign Affairs Committee. 15 May 2018. Archived (PDF) from the original on 3 March 2022. Retrieved 6 March 2022.
- ^ "Russia" (PDF). Intelligence and Security Committee of Parliament. 21 July 2020. Archived (PDF) from the original on 3 March 2022. Retrieved 6 March 2022.
- ^ Pickard, Jim (28 February 2022). "Government brings forward bill to tackle UK's 'dirty money'". Financial Times. Retrieved 6 March 2022.
Further reading
[edit]- Bullough, Oliver (2022). Butler to the World: How Britain Helps the World's Worst People Launder Money, Commit Crimes, and Get Away with Anything. New York: St. Martin's Press. ISBN 9781250281920. OCLC 1303568974.
- Bullough, Oliver (May 25, 2018). "How Britain let Russia hide its dirty money". The Guardian. Retrieved July 3, 2022.
- Londongrad: From Russia with Cash; The Inside Story of the Oligarchs. Mark Hollingsworth, Stewart Lansley. Published May 5, 2009.