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Russian money in London

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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

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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

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References

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  1. ^ 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.
  2. ^ Guriev, Sergei (Winter 2005). "The Role of Oligarchs in Russian Capitalism". Journal of Economic Perspectives. 19 (1): 131–150. Retrieved 15 May 2024.
  3. ^ 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.
  4. ^ "Five things we learned about Russians in the UK". BBC Radio 4. Retrieved 17 July 2022.
  5. ^ Sweeney, Mark (14 March 2022). "Tate galleries cut ties with sanctioned billionaires after Ukraine invasion". The Guardian.
  6. ^ Flood, Alison (26 April 2018). "Waterstones bookshops bought by hedge fund Elliott Advisors". The Guardian.
  7. ^ Johnston, Ian (17 April 2022). "Waterstones turns new page as custodian of independent bookselling". Financial Times. Archived from the original on 17 April 2022.
  8. ^ "Ukraine crisis: How much Russian money is there in the UK?". BBC News. 11 March 2022.
  9. ^ "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.
  10. ^ "Russia" (PDF). Intelligence and Security Committee of Parliament. 21 July 2020. Archived (PDF) from the original on 3 March 2022. Retrieved 6 March 2022.
  11. ^ Pickard, Jim (28 February 2022). "Government brings forward bill to tackle UK's 'dirty money'". Financial Times. Retrieved 6 March 2022.

Further reading

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