A review of the UK Tier 1 investor visa revealed there had been risks associated with corruption and organised crime among a group of applicants.
Home secretary Suella Braverman said in a statement that the Home Office considered around 6,312 cases among Tier 1 investor migrants and adult dependants who obtained leave between the launch of the programme on 30 June 2008 and 6 April 2015 – when the requirement to open a regulated UK bank account before applying was introduced.
Braverman said: “The review of cases identified a small minority of individuals connected to the Tier 1 (Investor) visa route that were potentially at high risk of having obtained wealth through corruption or other illicit financial activity, and/or being engaged in serious and organised crime.
“I should stress that the work carried out only implies that a particular individual potentially poses a risk of having connections to criminality; it does not mean guilt has been proven. UK law enforcement have access to this data and are taking action as appropriate under their operational remits.
“Information on all high-risk individuals has been discussed with the Home Office’s independent operational partners and a range of actions has and is being considered including, where appropriate, immigration action. Given the importance of ensuring the independence of the law enforcement process, I am unable to say more on the operationally sensitive work being taken forward in this area.
“Whilst unable to comment specifically due to operational sensitivity of work – as an example of the range of actions we are taking I can say that we have already sanctioned 10 oligarchs who had previously used this route as part of our extensive response to Russian aggression in the Ukraine.”
Main findings
Braverman set out the three main findings of the review, including:
- The route attracted a disproportionate number of applicants from the countries identified in the UK’s National Risk Assessment of money laundering and terrorist financing 2020 as particularly relevant to the cross-border money laundering risks faced and posed by the UK;
- The review did not find evidence of a systemic failure across financial institutions to carry out appropriate customer due diligence checks on Tier 1 (Investor) visa applicants in the period in question. However, there was evidence of high-risk Tier 1 (Investor) applicants seeking out and exploiting financial institutions that had the weakest customer due diligence controls; and
- The review found that the particular risks presented by the Tier 1 (Investor) route compared with other visa routes meant that the immigration system was not as well equipped to respond. UK Visas and Immigration are trained immigration caseworkers, but the risks posed by this route would require specialist expertise in detecting financial criminality.
Future plans
The home secretary added that the refusal rates for the Tier 1 visa were 7.9% for entry clearance applications; 4% for leave to remain applications; and 2.2% for indefinite leave to remain.
“The lessons learned from this review, and from ongoing monitoring and evaluation of the Tier 1 (Investor) route and the impact of reforms made between 2014 and 2019, formed a significant part of evidence base on which the government made its decision to ultimately close the route on the 17 February 2022,” she said.
“The Home Office has found that there are inherent difficulties in an investment-based immigration route based on passive wealth, both in terms of security and economic value. I am determined this government will ensure such mistakes are not repeated.”
As a result, Braverman said that any future ‘golden visa’-type schemes should not be based solely on an applicant’s levels of personal wealth.
She added: “We are continuing to consider options to bring forward alternative provisions to support investment-based migration benefiting the UK economy on a fundamentally different model within the innovator visa programme, placing more emphasis on the applicant’s track record as an investor in innovative business and an assessment of their plans to actively engage in such activity in the UK. We will ensure any new provisions are brought forward carefully.”
Side effects
Mandeep Khroud, senior associate immigration solicitor at Irwin Mitchell, told International Adviser: “Although the fight against money laundering appears to be a legitimate reason to close the Tier 1 (Investor) route, upon closer examination, we must consider the disproportionate effect it may impose on genuine individuals who were benefiting from this route using licit money to obtain entry clearance, leave to remain or settlement in the UK.
“A more proportionate approach could have been to maintain the Tier 1 (Investor) route but create more stringent mechanisms within the application process in order to prevent foreign nationals circumventing the immigration rules who may be seeking to exploit the route by, for example, using the route as a money laundering scheme.
“These mechanisms may include, for instance, creating a requirement that bank accounts opened for the purpose of the Tier 1 (Investor) visa may only be held with financial institutions approved by the Home Office and set out in a list from which the applicant may choose. This would allow the Home Office to ensure that only those organisations which have the adequate levels of CDD and AML systems to deal with this route may be included on the list.
“Further to this, the Home Office could also consider developing an internal specialist team to deal with the identification of criminal activity involved in such applications. Although this may entail further costs to the government, in light of the UK’s current economical climate, it may be prudent to balance the challenges of implementing a specialist team against the loss of genuine high net worth individual’s investments into the UK, as the former would have been of great help in boosting the UK’s economy indicators.”
