LONDON—In an attempt to crack down on money laundering and corruption, the British government has suspended investor visas that allow the superrich to gain speedy entry to the country.
Tier-one investor visas enable wealthy people to settle in the UK by investing in government bonds or British businesses.
A person can apply to settle after two years with an investment of 10 million pounds ($12.8 million), or after three years with an investment of 5 million pounds ($6.4 million).
However, there have been concerns that so-called golden visas have been used to launder money from countries like Russia and China.
Caroline Nokes, Britain’s immigration minister, said in a statement: “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 only genuine investors, who intend to support UK businesses, can benefit from our immigration system.”
The scheme will be suspended until it has been audited, according to the BBC.
Around 3,000 investor visas have been granted in the last decade. In 2014, 1,172 people were granted tier-one visas, many of them from Russia and China. In 2017, the number of approvals had dropped to 355.
Under the new rules, independent and “suitably regulated” auditors will investigate applicants’ finances and businesses to ensure there are no people coming into the country with illegally acquired money.
Applicants will also need to prove they have had control of their money for at least two years before their application. They will be banned from investing in British government bonds and will need instead to put their money in active British companies.
The ‘Brightest and Best’
The tier-one visa scheme was introduced in 2008 as a way to encourage people from outside the EU to invest in the UK. They were required to be of “good character” and have a UK bank account.
The hope was that the “brightest and best” would be attracted to the UK to settle in the country.
However, in 2014, the Migration Advisory Committee, which advises the government on immigration, concluded that the scheme had contributed little to British citizens. They said most applicants bought gilts—effectively loans to the government—rather than actually investing in the UK.
The committee said: “The evidence we received from partners highlighted that financial considerations are very much secondary to nonfinancial considerations, with British citizenship often as the ultimate prize. What is less clear is the extent to which UK residents benefit from the existence of the route, and even if they benefit at all.”
In October, Vera Jourova, EU justice commissioner, warned that “golden passports” also put Europe’s security at risk because states could grant them to potentially dangerous or corrupt individuals.
Jourova said that the EU “must not become a safe haven for criminals, corruption, and dirty money,” according to German news service Die Welt.
Jourova called on member states to “quickly adopt” new EU laws on combating money laundering. “We don’t want any Trojan horses in the EU,” she said. “Some member states must do more to ensure citizenship is not awarded to criminals.”
The Paris-based Organization for Economic Cooperation and Development said many “golden passport” schemes undermine the fight against tax evasion.
“Schemes can potentially be abused to misrepresent an individual’s jurisdiction of tax residence,” it warned.
A European Commission report on the use and abuse of “golden passport” schemes is due later this year.
Epoch Times reporter Tom Ozimek contributed to this report.