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UK Govt slammed for U-turn on suspension of ‘golden’ visa scheme for super wealthy

Vidya Ram London | Updated on December 12, 2018 Published on December 12, 2018

Anti-corruption campaigners have condemned the British Home Office’s decision to backtrack on plans to suspend a “golden” visa scheme for wealthy investors, just days after announcing the suspension.

Last week the Home Office had said it was planning to suspend the Tier-1 (investor) visa scheme that enables its holders to gain a swifter route to settlement in the UK until new safeguarding rules were brought in 2019. While mainly used by Russian and Chinese nationals, it is also popular with Indian nationals: 82 applied for an investor visa through this route between 2008 and March 2018, reported Transparency International.

However, the formal announcement to Parliament never materialised, with no mention of the scheme or changes to it in an update from the Home Office. “The Tier 1 (Investor) visa is not currently suspended, however we remain committed to reforming the route. A further announcement will be made in due course,” said the Home Office in a statement.

Transparency International, which is among the campaign groups pushing for change amid signs that reforms left the route open to abuse, called for urgent clarification from the government.

“It is vital that government has a joined-up approach to fighting corruption with departments working together in unison. We are concerned to hear conflicting messages on government action on this important issue over the past week,” said Rachel Davies Teka, head of advocacy at Transparency International UK.

“The corruption risks inherent in these schemes was serious enough for Caroline Nokes to suspend them last week, so what’s changed?,” said Naomi Hirst, a senior anti-corruption campaigner at Global Witness. “For a government so keen on taking back control of its borders, this is not just an embarrassment, it’s shameful.”

What the scheme offers

The scheme, which is open to those who invest at least £2 million in UK government, shares or businesses, offers a faster route to settlement in the country. Those who invest over £10 million can apply to settle after two years, while those who invest over £5 million can do so in three years.

While the UK government had sought to position the visa scheme as part of its strategy to attract the “brightest and the best”, campaigners have long warned that it provided a means for the super wealthy internationally to launder money in the UK. In 2015, Transparency International identified over 3,000 individuals and their families — the “vast majority” of whom were from Russia and China — who had been granted these so-called “golden” visas with “little to no checks done” on the source of the wealth. In some cases, applicants were awarded visas even before opening a UK bank account.

However, legal groups have warned of the consequences of the sudden suspension. “The Tier 1 investor route, in line with similar programmes offered by many other countries, has been successful in attracting high net worth individuals and their families to the UK for over 20 years,” said the law firm Penningtons in an analysis of the proposed changes, noting that the instances of abuse were “few and far between.” The Financial Times also reported that the Immigration Law Practitioners Association had written to the government expressing concerns, including about the failure to give sufficient notice as was practice.

The change marks an embarrassing U-turn for Britain’s Home Office and Home Secretary Sajid Javid, seen as one of the contenders for the Conservative Party leadership should Theresa May be ousted in a no-confidence vote.

Published on December 12, 2018
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