Russian money in London

Last updated

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]

Contents

History

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

Related Research Articles

<span class="mw-page-title-main">Roman Abramovich</span> Russian businessman and politician (born 1966)

Roman Arkadyevich Abramovich is a Russian businessman and politician. He is the former owner of Chelsea, a Premier League football club in London, England, and is the primary owner of the private investment company Millhouse. He has Russian, Israeli and Portuguese citizenship.

<span class="mw-page-title-main">Mikhail Fridman</span> Russian–Israeli businessman, billionaire, and oligarch

Mikhail Maratovich Fridman is a Ukrainian-born, Russian–Israeli tycoon. He is one of the co-founders of Alfa-Group, a multinational Russian conglomerate. According to Forbes, he was the second-richest Russian as of 2013, moving down to ninth-richest Russian in 2023. In May 2017, he was also ranked as Russia's most important businessman by bne IntelliNews. In February 2024, Fridman had a net worth of $13.1 billion, according to the Bloomberg Billionaires Index.

Russian oligarchs are business oligarchs of the former Soviet republics who rapidly accumulated wealth in the 1990s via the Russian privatisation that followed the dissolution of the Soviet Union. The failing Soviet state left the ownership of state assets contested, which allowed for informal deals with former USSR officials as a means to acquire state property.

<span class="mw-page-title-main">Oleg Deripaska</span> Russian businessman (born 1968)

Oleg Vladimirovich Deripaska is a Russian oligarch and billionaire. Deripaska enriched himself on previously state-owned assets that were privatized in the aftermath of the collapse of the Soviet Union. He is the founder of Basic Element, one of Russia's largest industrial groups, and Volnoe Delo, Russia's largest charitable foundation. He was the president of En+ Group, a Russian energy company, and headed United Company Rusal, the second-largest aluminum company in the world, until he quit both roles in 2018.

<span class="mw-page-title-main">Bill Browder</span> American-born English businessman and political activist (born 1964)

Sir William Felix Browder, is an American-born English financier and political activist. He is the CEO and co-founder of Hermitage Capital Management, the investment advisor to the Hermitage Fund, which was formerly the largest foreign portfolio investor in Russia. The Hermitage Fund was founded in partnership with Republic National Bank, with $25 million in seed capital. The fund, and associated accounts, eventually grew to $4.5 billion of assets under management. In 1997, the Hermitage Fund was the best-performing fund in the world, up by 238%. Browder's primary investment strategy was shareholder rights activism. Browder took on large Russian companies such as Gazprom, Surgutneftegaz, Unified Energy Systems, and Sidanco. In retaliation, on 13 November 2005, Browder was refused entry to Russia, deported to the UK, and declared a threat to Russian national security.

Raymond Benedict Bartholomew Michael Asquith, 3rd Earl of Oxford and Asquith,, is a British former diplomat and hereditary peer, styled Viscount Asquith until he succeeded to his father's peerage titles on 16 January 2011. The earldom of Oxford and Asquith was created for his paternal great-grandfather, H. H. Asquith, a former prime minister of the United Kingdom.

<span class="mw-page-title-main">Len Blavatnik</span> Ukrainian-born British-American billionaire businessperson and philanthropist (born 1957)

Sir Leonard Valentinovich Blavatnik is a Soviet/Ukrainian-born British-American businessman and philanthropist. As of January 2024, Forbes estimated his net worth at $31.3 billion. In 2017, Blavatnik received a knighthood for services to philanthropy.

<span class="mw-page-title-main">Alexander Babakov</span> Russian politician (born 1963)

Alexander Mikhailovich Babakov is a Russian politician and member of the State Duma, the Russian parliament. He was appointed Special Presidential Representative to Russians by Vladimir Putin in 2012.

<span class="mw-page-title-main">Alexander Lebedev</span> Russian businessman

Alexander Yevgenievich Lebedev is a Russian businessman, and has been referred to as one of the Russian oligarchs. Until 1992, he was an officer in the First Chief Directorate of the Soviet Union′s KGB and later one of the KGB's successor-agencies, Russia's Foreign Intelligence Service (SVR).

<span class="mw-page-title-main">Petr Aven</span> Russian businessman, politician and economist

Petr Olegovich Aven is a Russian businessman, economist and politician who also holds Latvian citizenship. Until March 2022 he headed Alfa-Bank, Russia's largest commercial bank. In March 2022, he resigned from the board of directors at Alfa-Bank and LetterOne Group to help them avoid sanctions. In 2023 he was named the 659th richest person in the world, with a net worth of around $4.2 billion.

Ukrainians in the United Kingdom consist mainly of British citizens of Ukrainian descent.

<span class="mw-page-title-main">Alisher Usmanov</span> Uzbek-Russian businessman and investor (born 1953)

Alisher Burkhanovich Usmanov is an Uzbek and Russian businessman and investor. By 2023, Usmanov had an estimated net worth of $14.5 billion and was among the world's 100 wealthiest people.

<span class="mw-page-title-main">Russia–Switzerland relations</span> Bilateral relations

Russia–Switzerland relations are foreign relations between Russia and Switzerland. Switzerland opened a consulate in Saint Petersburg in 1816, upgrading it to a legation 90 years later. The two countries broke off diplomatic relations in 1923, when Russia was going through a period of revolutionary turmoil – and they were not resumed until 1946. Due to the Russian invasion of Ukraine, relations became tense after Switzerland imposed sanctions against Russia. Russia placed Switzerland on a list of "unfriendly countries".

<span class="mw-page-title-main">Alexander Mamut</span> Russian billionaire businessman

Alexander Leonidovich Mamut is a Russian billionaire, lawyer, banker and investor. He was until 2020 a co-owner of Rambler Group. He is an Israeli citizen.

Reputation laundering occurs when a person or an organization conceals unethical, corrupt, or criminal behavior or other forms of controversy by performing highly visible positive actions with the intent to improve their reputation and obscure their history.

<span class="mw-page-title-main">Sergei Zheleznyak</span> Russian politician

Sergei Vladimirovich Zheleznyak is a Russian politician. In 2007 he was elected as a member of State Duma and became its Deputy Chairman in June 2012. He was a member of the State Duma's Committee on International Affairs. Prior to his political career he was an advertising, media, and public relations executive.

Owen Matthews is a British writer, historian and journalist. His first book, Stalin's Children, was shortlisted for the 2008 Guardian First Book Award, the Orwell Prize for political writing, and France's Prix Médicis Etranger. His books have been translated into 28 languages. He is a former Moscow and Istanbul Bureau Chief for Newsweek.

<i>Londongrad</i> (TV series) Russian crime comedy television series

Londongrad is a Russian crime comedy television series, the first series on Russian television to be shot in the capital of the United Kingdom.

Vladimir Anatolyevich Chernukhin was the deputy minister of finance of the Russian Federation and Chairman of Vnesheconombank. Chernukhin has spent most of his life as a banker and businessman. Between 2000 and 2002, he served as a Deputy Minister of Finance in Prime Minister Mikhail Kasyanov's government. Chernukhin fled to the UK after Vladimir Putin dismissed him in 2004 and he is known to be a loyalist to former Russian prime minister Mikhail Kasyanov, who in 2005 became an opponent of Putin. He received British citizenship in 2011.

<span class="mw-page-title-main">Economic Crime (Transparency and Enforcement) Act 2022</span> UK bill

The Economic Crime Act 2022 is an Act of Parliament of the United Kingdom, which expands provisions in relation to sanctions and financial crime, that was fast-tracked through Parliament in response to the 2022 Russian invasion of Ukraine.

References

  1. 1 2 3 4 "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. 1 2 3 4 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