Golden visas

Question 1

Top line

Answer 1

The golden visa scheme presents a major money laundering risk for the proceeds of corruption entering the UK.

Question 2

What are Tier 1 investor visas?

Answer 2

Tier 1 investor scheme is the UK’s system for issuing residency visas in exchange for a commitment to invest in the UK economy.

A HNWI must invest a minimum £2m in UK Gov bonds/ share or loan capital in active UK registered companies. After 5 years, investors can apply for permanent residency in the UK. This is reduced to 3 years for those investing £5m or more, and 2 years for those investing £10m.

Question 3

When were Tier 1 visas introduced?

Answer 3

June 2008

Question 4

How much are the T1 visas worth to the UK economy?

Answer 4

We have analysed HO data and calculated that at least £3.15bn has entered the UK since the scheme commenced in 2008 (this figure came from counting all T1 visas and assuming the minimum was invested, so the real number is likely to be higher.)

Question 5

How many people have used the scheme since inception?

Answer 5

3000

Data also shows an increase from 153 in 2009 to 1173 in 2014

Question 6

To which country do we give the highest number of T1 visas?

Answer 6

China – 37% of total successful applicants (Q3 2008 – Q2 2015) / 1126
Russia – 23% /706
United states – 5%/150

Question 7

What is the breakdown of money from Russia and China through the Golden Visa scheme?

Answer 7

At a minimum, a total of £1.15bn of investment flows into the UK can be attributed to Chinese golden visa investors and £729m to Russian nationals.

Question 8

What is the blind faith period?

Answer 8

From inception – 6 April 2015:
• HO relied on applicant commitment to transfer funds to UK bank account AFTER they were awarded Tier 1 investor visa. They expected that AML checks would be carried out by banks – this was their assurance against ML risks
• However – highly likely that banks used fact that an individual had been awarded a Tier 1 visa as evidence to overcome any due diligence concerns when assessing the applicant’s legitimacy.
• As a result: The corrupt would have been attracted to Tier 1 system for 2 reasons a) residency but ALSO b) to help circumvent AML checks

Question 9

How can we improve the UK’s supervision of ML risks?

Answer 9

• Adequately RESOURCE UK law enforcement effort
• CONSOLIDATE the # of AML regulatory supervisors & provide adequate resources for supervision
• Require relevant AML senior mangers in private sector to have PERSONAL RESPONSIBILITY for ML failings

Question 10

What are the key recommendations?

Answer 10

• The UK Home Office should require up-front and public declarations of legitimate income and legal sources of wealth by golden visa investors
• The UK should establish a preventative visa denial list for people that are highly likely to be involved in systematic corruption