Russian money in London

"Londongrad" redirects here. For other uses, see Londongrad (disambiguation).

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

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

• Russian oligarchs § Russian oligarchs in London
• History of Russia (1991–present)#"Shock therapy"
• Russians in the United Kingdom
• Shock doctrine

References

1. "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. 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

• Bullough, Oliver (2022). Butler to the World: How Britain Helps the World's Worst People Launder Money, Commit Crimes, and Get Away with Anything. New York: St. Martin's Press. ISBN 9781250281920. OCLC 1303568974.
• Bullough, Oliver (May 25, 2018). "How Britain let Russia hide its dirty money". The Guardian. Retrieved July 3, 2022.
• Londongrad: From Russia with Cash; The Inside Story of the Oligarchs. Mark Hollingsworth, Stewart Lansley. Published May 5, 2009.