News / Economy

Sanctions Threaten London’s Secretive Russian Oligarchs

Sanctions Threaten London’s Secretive Russian Oligarchsi
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

HRW: Egypt's Trial of Morsi ‘Badly Flawed’

Human Rights Watch says former Egypt leader's detention without charge for more than three weeks after his removal from office violated Egyptian law; government rejects criticism More

Photogallery Lancet Report Calls for Major Investment in Surgery

In its report published by The Lancet, panel of experts says people are dying from conditions easily treated in the operating room such as hernia, appendicitis, obstructed labor, and serious fractures More

Music Industry Under Sway of Digital Revolution

Millions of people in every corner of the Earth now can enjoy a vast variety and quantity of music in a way that has never before been possible More

This forum has been closed.
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.
Study: Insecticide Damaging Wild Bee Populationsi
April 24, 2015 10:13 PM
A popular but controversial type of insecticide is damaging important wild bee populations, according to a new study. VOA’s Steve Baragona has more.

Video Study: Insecticide Damaging Wild Bee Populations

A popular but controversial type of insecticide is damaging important wild bee populations, according to a new study. VOA’s Steve Baragona has more.

Video Data Servers Could Heat Private Homes

As every computer owner knows, when their machines run a complex program they get pretty hot. In fact, cooling the processors can be expensive, especially when you're dealing with huge banks of computer servers. But what if that energy could heat private homes? VOA’s George Putic reports that a Dutch energy firm aims to do just that.

Video Cinema That Crosses Borders Showcased at Tribeca Film Festival

Among the nearly 100 feature length films being shown at this year’s Tribeca Film Festival in New York City are more than 20 documentaries and features with international appeal, from a film about a Congolese businessman in China, to documentaries shot in Pakistan and diaspora communities in the U.S., to a poetic look at disaffected South African youth. VOA’s Carolyn Weaver has more.

Video UN Confronts Threat of Young Radicals

The radicalization and recruitment of young people into Islamist extremist groups has become a growing challenge for governments worldwide. On Thursday, the U.N. Security Council heard from experts on the issue, which has become a potent threat to international peace and security. VOA’s Margaret Besheer reports.

Video Growing Numbers of Turks Discover Armenian Ancestry

In a climate of improved tolerance, growing numbers of people in Turkey are discovering their grandmothers were Armenian. Hundreds of thousands of Armenians escaped the mass deportations and slaughter of the early 1900's by forced conversion to Islam. Or, Armenian children were taken in by Turkish families and assimilated. Now their stories are increasingly being heard. Dorian Jones reports from Istanbul that the revelations are viewed as an important step.

Video Migrants Trek Through Western Balkans to Reach EU

Migrants from Africa and other places are finding different routes into the European Union in search of a better life. The Associated Press followed one clandestine group to document their trek through the western Balkans to Hungary. Zlatica Hoke reports that the migrants started using that route about four years ago. Since then, it has become the second-most popular path into Western Europe, after the option of sailing from North Africa to Italy.

Video TIME Magazine Honors Activists, Pioneers Seen as Influential

TIME Magazine has released its list of celebrities, leaders and activists, whom it deems the world’s “most influential” in 2015. VOA's Ramon Taylor reports from New York.

Video US Businesses See Cuba as New Frontier

The Obama administration's opening toward Cuba is giving U.S. companies hope they'll be able to do business in Cuba despite the continuation of the U.S. economic embargo against the communist nation. Some American companies have been able to export some products to Cuba, but the recent lifting of Cuba's terrorism designation could relax other restrictions. As VOA's Daniela Schrier reports, corporate heavy hitters are lining up to head across the Florida Straits - though experts urge caution.

Video Kenya Launches Police Recruitment Drive After Terror Attacks

Kenya launched a major police recruitment drive this week as part of a large-scale effort to boost security following a recent spate of terror attacks. VOA’s Gabe Joselow reports that allegations of corruption in the process are raising old concerns about the integrity of Kenya’s security forces.

Video Japan, China in Race for Asia High-Speed Rail Projects

A lucrative competition is underway in Asia for billions of dollars in high-speed rail projects. Cambodia, India, Indonesia, Malaysia Thailand and Vietnam are among the countries planning to move onto the fast track. They are negotiating with Japan and the upstart Chinese who are locked in a duel to revolutionize transportation across Asia. VOA Correspondent Steve Herman in Bangkok has details.

Video Scientists: Mosquitoes Attracted By Our Genes

Some people always seem to get bitten by mosquitoes more than others. Now, scientists have proved that is really the case - and they say it’s all because of genes. It’s hoped the research might lead to new preventative treatments for diseases like malaria, as Henry Ridgwell reports from London.

Video Bible Museum Coming to Washington DC

Washington is the center of American political power and also home to some of the nation’s most visited museums. A new one that will showcase the Bible has skeptics questioning the motives of its conservative Christian funders. VOA religion correspondent Jerome Socolovsky reports.

Video Armenia and Politics of Word 'Genocide'

A century ago this April, hundreds of thousands of Armenians of the Turkish Ottoman empire were deported and massacred, and their culture erased from their traditional lands. While broadly accepted by the U.N. and at least 20 countries as “genocide”, the United States and Turkey have resisted using that word to describe the atrocities that stretched from 1915 to 1923. But Armenians have never forgotten.

Video Afghan First Lady Pledges No Roll Back on Women's Rights

Afghan First Lady Rula Ghani, named one of Time's 100 Most Influential, says women should take part in talks with Taliban. VOA's Rokhsar Azamee has more from Kabul.

Video New Brain Mapping Techniques Could Ease Chronic Pain

From Boulder, Colorado, Shelley Schlender reports that new methods for mapping pain in the brain are providing validation for chronic pain and might someday guide better treatment.

VOA Blogs

World Currencies


Rates may not be current.