Tier 1 (Investor) Route: Review of Operation

Suella Braverman Excerpts

Thursday 12th January 2023 Written Statements

[The Secretary of State for the Home Department (Suella Braverman)]

In March 2018, following the Salisbury poisonings, the then Home Secretary Amber Rudd committed to a review of individuals who had entered the UK under the tier 1 (investor) immigration route, prior to reforms made in 2015.

I am now providing here the Government’s final response summarising the findings of that review.

The tier 1 (investor) route had allowed individuals (primarily non-EEA nationals) investing in the UK to enter, and eventually settle in, the UK. It was launched in 2008 and at that time required applicants to be able to demonstrate they had access to £1 million of available funds to invest in UK Government bonds and shares or loan funds to UK companies. The UK had operated some form of investor visa programme for high-net-worth personal investment since 1994. The tier 1 (investor) visa route was ultimately closed on 17 February 2022.

I can confirm that the Home Office considered the cases of the 6,312 tier 1 (investor) migrants and tier 1 (investor) adult dependants who obtained leave between the launch of the route on 30 June 2008, and the introduction on 6 April 2015 of a requirement to open a regulated UK bank account before applying for a visa under the route. Each case was reviewed for potential links to criminality or other risk factors. Officials also considered whether there were wider risks presented in the design and implementation of the route at that time, and the overall economic benefit of the route.

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 been 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. While unable to comment specifically due to the operational sensitivity of the 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.

The Home Office is robust in refusing leave where this is appropriate. During the operation of the tier 1 (investor) visa programme, the route has had a refusal rate for main applicants and their dependants of 7.9% for entry clearance applications and 4% for leave to remain applications, and for main applicants seeking indefinite leave to remain (settlement) the refusal rate is 2.2%¹.

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 the evidence base on which the Government made their decision to ultimately close the route on 17 February 2022. 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.

In that spirit, I am setting out in more detail broader systemic findings from the review:

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. In a number of instances, financial institutions associated with multiple high-risk migrants at the time have since been issued significant fines by the Financial Conduct Authority. This has been due to the firms’ handling of customer due diligence for high-risk clients in general rather than specifically for tier 1 (investor) visa applicants.

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. Cases linked to historical allegations of corruption or financial crime are complex, may be based on suspicion or allegations only, and not evidenced by criminal enforcement action in the country of origin. Complex financial crimes such as corruption and embezzlement can also remain undetected for significant periods of time.

I recognise that the UK’s openness to global business carries risks that malign actors will take advantage of our systems to pursue corrupt and criminal ends. We must ensure that kleptocracies such as Russia are not able to act with impunity overseas. That is why the UK has taken strong action since the start of the war, and why we will continue to do so in the years to come. We have swiftly implemented the strongest set of economic sanctions ever imposed, against a G20 country. This stands at 1,200 individuals and 120 entities linked to the Russian state. In total, we have frozen over £18 billion in Russian assets since the war began.

We have established a new combatting kleptocracy cell in the National Crime Agency to investigate criminal sanctions evasion and high-end money laundering. And we have brought forward new and robust legislation to prevent corrupt elites from abusing our open economy, including establishing a new, open register for overseas entities owning property in the UK.

The Government are clear that any future visa route to facilitate investment-based migration must not offer entry solely on the basis of the applicant’s personal wealth. 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.

¹ Entry clearance refusal rate 30 June 2008 to Q3 main applicants and dependants.

Refusal rate for tier 1 (investor) leave to remain from 30 June 2008 to 2020.

Settlement for main applicants (indefinite leave to remain) April 2013 to 9 December 2022.

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