The British government is scrapping the so-called "golden visas" for wealthy investors after widespread criticism that they were being used by money launderers and by Russian oligarchs close to the Kremlin.

Home Secretary Priti Patel said Thursday the decision came after a review of Tier 1 visas.

"This is just the beginning of our new crackdown on fraud and illegal finance," said the conservative minister.

Philip Pickert

Business correspondent based in London.

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So far, Tier 1 visas have provided easy access to the kingdom for the wealthy and investors.

Anyone with assets of at least £2million in British investment funds and a bank account on the island could get a residence permit with the “Golden Visa”.

The "Golden Visa" program was introduced in 1994, but in 2015 and 2019 the conditions were tightened somewhat.

Ukraine invasion warning

The "Golden Visa" was particularly popular with Russians, Chinese and Arabs.

It is estimated that around 700 Russians have received such visas.

Many wealthy people from Russia have bought luxury properties in London areas such as Westminster, Mayfair, Knightsbridge and Chelsea ("Chelski").

The British capital is therefore also nicknamed “Moscow on the Thames” or “Londongrad”.

In July 2020, a report by Parliament's Intelligence and Security Committee (ISC) ruled that London was serving as a "laundromat" (money-laundering machine) for oligarchs.

The money also finances patronage and leverage "across a broad swath of the British establishment - PR firms, charities, political interests, academic and cultural institutions have all been willing recipients of Russian money and have contributed to a 'reputation-washing' process," the report reads the report.

According to Transparency International, UK property worth £1.5 billion is owned by Russian citizens accused of corruption.

A quarter of this is in the London government district of Westminster.

In addition, more than 2,000 companies registered in the UK or its overseas territories have been linked to £82 billion in Russian money laundering from fraud and embezzlement cases, it said.

The British government is also preparing legislation that would sanction investments by Kremlin-affiliated oligarchs and businessmen in the UK should Russian troops invade Ukraine.

Secretary of State Liz Truss announced two weeks ago that there would be no more hiding places "for those who supported the Russian regime".