News / Economy

Sanctions Threaten London’s Secretive Russian Oligarchs

Sanctions Threaten London’s Secretive Russian Oligarchsi
X
Henry Ridgwell
March 25, 2014 6:36 PM
During the past decade London has proved a magnet for rich Russians. But the billions of rubles that pour into the City of London could be under threat, as Britain weighs economic sanctions against Russia following Moscow’s annexation of Crimea. Henry Ridgwell reports for VOA from London.
VIDEO: During the past decade, London has proved a magnet for rich Russians. But the billions of rubles that pour into the city could be under threat. Henry Ridgwell reports.
Henry Ridgwell
During the past decade London has proved a magnet for rich Russians. But the billions of rubles that pour into the City of London could be under threat, as Britain weighs economic sanctions against Russia following Moscow’s annexation of Crimea.
 
In London’s wealthy districts of Kensington and Chelsea, street names like Moscow Road and St. Petersburgh Place point to the historic appeal for wealthy Russians.

Parts of the city are affectionately known as ‘Londongrad’ by Russian residents. Much of the allure stems from the security London affords, says Nicholas Redman of the International Institute for Strategic Studies.

“We have a court system here, and property rights system in Britain, which you just do not have the equivalent of in Russia. And so people that have made money in Russia like to have a base here in order to feel more secure in the future,” said Redman.

Global trade hub

That security is under question as Britain draws up stronger economic sanctions against Russia in case of further incursions into Ukraine.

The City of London is a hub for Russian businesses pursuing global trade. Nearly 70 Russian companies are listed on London stock markets, including energy giants Rosneft and Gazprom.

The threat of sanctions has caused the postponement of at least two stock offerings, though, as the appetite for Russian securities has fallen, according to Moscow-born Sergei Ostrovsky from the Russia division of global law firm, Ashurst.

“There will a period of caution while people put on hold projects, which can be put on hold, adopt the wait and see position," said Ostrovsky. "And where they will be cautious to take on new projects. In the long term it is difficult to see for an easy replacement for the city of London where Russian business is concerned.”

Prime London property is another favored investment. Real estate agents highlight the $39-million sale in 2012 of a 12-bedroom house in Kensington, complete with movie theater and swimming pool - the ideal investment for a Russian oligarch.

Broker Ed Mead, Executive Director of real estate agent Douglas and Gordon, said, “The secrecy laws here allow you to buy a property in an offshore or a company name. You pay an enhanced stamp duty [tax]. And I think they quite like the anonymity that provides them.”

Analysts debate issue

Russia’s President Vladimir Putin relies on the support of influential oligarchs with lots of money parked in London, said Redman of the International Institute for Strategic Studies.

“If large members of the Russian elite are being seriously inconvenienced, if their wealth is being wiped out, if they are no longer welcome in the kind of places that they are used to going in, then it is reasonable to assume that their loyalty would at least be tested,” he said.

Sanctions would not have an immediate effect on Russia’s wider economy, said Elizabeth Stephens of insurance brokers Jardine Lloyd Thompson. “We have seen with Iran, we saw with Iraq under [Saddam] Hussein, it takes many years for that to come to fruition. And in the interim, the European Union would hurt their own economies as well.”

Analysts say that trade-off is being debated in capitals across Europe - none more so than in London.

You May Like

Obama: Alaskans Feel Signs of Climate Change

They're seeing bigger storm surges as sea ice melts, more wildfires, erosion of glaciers, shorelines More

1855 Slave Brochure Starkly Details Sale of Black Americans

Document lists entire families that were up for sale in New Orleans, offering graphic insight into the slavery trade More

Katrina Brought Enduring Changes to New Orleans

The city’s recovery is the result of the people and culture the city is famous for, as well as newcomers and start-up industries More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Colombians Flee Venezuela as Border Crisis Escalatesi
X
August 27, 2015 2:08 AM
Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Is China's Economic Data Accurate?

Some investors say China's wild stock market gyrations have been made worse by worries about the reliability of that nation's economic data. And some critics say the reports can mislead investors by painting an unrealistically-strong picture of the economy. A key China scholar says Beijing is not fudging ((manipulating)) the numbers, but that the economy is evolving quickly from smoke-stack industries to services, and the ways of tracking new economic activity are falling behind the change. V
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Shipping Containers Provide Experimental Housing

Housing prices around the San Francisco Bay area are out of reach for many people, so some young entrepreneurs, artists and tech industry workers are creating their own houses using converted shipping containers. But as VOA's Mike O’Sullivan reports from Oakland, the effort requires ingenuity and dealing with restrictive local laws.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video Technique May Eliminate Drill-and-Fill Dental Care

Many people dread visiting dentists because they're afraid of drills. Now, however, a technology developed by a British firm promises to eliminate the need for mechanical cleaning of dental cavities by speeding a natural process of tooth repair. VOA’s George Putic reports.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.
Video

Video French Experiment in Integrating Roma Under Threat

Plans to destroy France’s oldest slum have sparked an outcry on the part of its Roma residents. As Lisa Bryant reports from the Paris suburb of La Courneuve, rights groups argue the community is a fledgling experiment on integrating Roma who are often outcasts in many parts of Europe.
Video

Video Kenyans Turn to Agriculture for Business

Each year Kenyan universities continue to churn out graduates for the job market despite the already existing high rate of unemployment among youth in the country. Some of these young men and women have realized that agriculture can be as rewarding as any other business or job, and they are resorting to agribusiness in large numbers as a way of tackling unemployment. Rael Ombuor reports for VOA.
Video

Video First Women Graduate Elite Army Ranger School

Two women are making history for the U.S. Army by proving they are among the toughest of the tough. VOA's Carla Babb reports from Fort Benning, Georgia as 94 men and those two women rise as graduates of the difficult Ranger school.

VOA Blogs

World Currencies

EUR
USD
0.8874
JPY
USD
120.83
GBP
USD
0.6497
CAD
USD
1.3271
INR
USD
66.162

Rates may not be current.