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

How to Safeguard Your Mobile Privacy

As the digital world becomes more mobile, so too do concerns about eroding privacy and increased hacking More

'Desert Dancer' Chronicles Iranian Underground Dance Troupe

Film by Richard Raymond is based on true story of Afshin Ghaffarian and his friends More

Researcher: Obesity Poses Complex Problem

Professor at Symposium on Obesity, Diabetes and Metabolic Syndrome says problem involves more than calorie intake, warns of worldwide health impact 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.
Scientists Say Plankton More Important Than Previously Thoughti
X
George Putic
May 26, 2015 9:26 PM
Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video US-led Coalition Gives Some Weapons to Iraqi Troops

In a video released Tuesday from the Iraqi Ministry of Defense, Iraqi forces and U.S.-led coalition troops survey a cache of weapons supplied to help Iraq liberate Mosul from Islamic State group. According to a statement provided with the video, the ministry and the U.S.-led coaltion troops have started ''supplying the 16th army division with medium and light weapons in preparation to liberate Mosul and nearby areas from Da'esh (Arabic acronym for Islamic State group).''
Video

Video Amnesty International: 'Overwhelming Evidence' of War Crimes in Ukraine

Human rights group Amnesty International says there is overwhelming evidence of ongoing war crimes in Ukraine, despite a tentative cease-fire with pro-Russian rebels. Researchers interviewed more than 30 prisoners from both sides of the conflict and all but one said they were tortured. Henry Ridgwell reports for VOA from London.
Video

Video Washington Parade Honors Those Killed Serving in US Military

Every year, on the last Monday in the month of May, millions of Americans honor the memories of those killed while serving in the armed forces. Memorial Day is a tradition that dates back to the 19th Century. While many people celebrate the federal holiday with a barbecue and a day off from work, for those who’ve served in the military, it’s a special day to remember those who made the ultimate sacrifice. Arash Arabasadi reports for VOA from Washington.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.
Video

Video Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam War

For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Female American Soldiers: Healing Through Filmmaking

According to the United States Defense Department, there are more than 200-thousand women serving in the U.S. Armed Forces.  Like their male counterparts, females have experiences that can be very traumatic.  VOA's Bernard Shusman tells us about a program that is helping some American women in the military heal through filmmaking.
Video

Video Iowa Family's Sacrifice Shaped US Military Service for Generations

Few places in America have experienced war like Waterloo. This small town in the Midwest state of Iowa became famous during World War II not for what it accomplished, but what it lost. As VOA’s Kane Farabaugh reports, the legacy of one family’s sacrifice is still a reminder today of the real cost of war for all families on the homefront.
Video

Video On Film: How Dance Defies Iran's Political Oppression

'Desert Dancer' by filmmaker Richard Raymond is based on the true story of a group of young Iranians, who form an underground dance troupe in the Islamic Republic of Iran. This is the latest in a genre of films that focus on dance as a form of freedom of expression against political oppression and social injustice. VOA’s Penelope Poulou has more.
Video

Video Turkey's Ruling Party Trying to Lure Voters in Opposition Stronghold

Turkey’s AK (Justice and Development) Party is seeking a fourth successive general election victory, with the goal of securing two-thirds of the seats in Parliament to rewrite the constitution and change the country's parliamentary system into a presidential one. To achieve that, the party will need to win seats in opposition strongholds like the western city of Izmir. Dorian Jones reports.
Video

Video Millions Flock to Ethiopia Polls

Millions of Ethiopians cast their votes Sunday in the first national election since the 2012 death of longtime leader Meles Zenawi. Mr. Meles' party, the Ethiopian People's Revolutionary Democratic Front, is almost certain of victory again. VOA's Anita Powell reports from Addis Ababa.

VOA Blogs

World Currencies

EUR
USD
0.9152
JPY
USD
122.70
GBP
USD
0.6494
CAD
USD
1.2374
INR
USD
63.925

Rates may not be current.