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The fall of Londongrad? Times change for Russia's super-rich

Author : Forbes

Source : 112 Ukraine

Many of them settled on London as a place to invest, and, in some cases, to reside
17:30, 18 October 2018

Daily Storm

From the ruins of Russia's Communism some of the winners of Russia's new capitalism came westwards. Having made their money in the chaotic, and sometimes dangerous, business climate that followed the fall of the Soviet Union, Russia's new rich started to look beyond their country's borders for places to spend -- and securely save -- their new wealth.

Many of them settled on London as a place to invest, and, in some cases, to reside. It was good business for high-end real estate agents. Britain's private schools raked in millions of dollars in fees from parents keen for their offspring to benefit from the most exclusive education. London's most expensive shops were happy to satisfy a craving for luxury acquired during childhoods under Communism.

Related: FBI tried to recruit Russian oligarch Deripaska, - NYT

Not all of the wealth was legally acquired, of course. Russia in its immediate post-Soviet years was simply not that kind of business climate. One young Russian-speaking British man this contributor knew in the early 1990s told the story of helping a Russian 'biznesmen' (the word 'businessman', its letters altered to fit the language,  was now understood in Russian) to look at real estate in London. Agents' fees were settled from a suitcase full of cash.

For those rich Russians keen to leave some aspects of their past behind, London could help with that, too. A trusted legal system meant that some business disputes with their origins on the other side of the former Iron Curtain actually came to court in the United Kingdom. Highly-skilled public relations professionals were on hand to repair and enhance reputations. In any case, the local libel laws meant that some inconvenient allegations would never appear in print.

Related: Is Ukraine ready to impose sanctions against Russian oligarchs?

As energy prices rose in the 2000s, Russia's super-rich became even richer. The cash continued to flow into the British capital. This stratum of society became known as 'Londongrad'. Mark Hollingsworth and Stewart Lansley's book of the same name chronicled the excesses of the post-Soviet expatriates.

Now times are changing. When the first oligarchs moved westwards in the 1990s and early 2000s, they were welcomed by a Britain not only open to wealthy outsiders but enjoying improving business and diplomatic ties with its former cold war foe. No longer.

Related: U.S. imposes sanctions against Russian oligarchs close to Putin

Russia's 2014 annexation of Crimea, together with suspected Russian involvement in the poisoning earlier this year in Britain of the former Russian intelligence officer, Sergei Skripal, and his daughter, Yulia, have taken British-Russian relations to a post-Cold War low.

At the same time, the British authorities have introduced new measures -- 'Unexplained Wealth Orders' -- aimed at cracking down on illegally acquired money and property. These require 'a person who is reasonably suspected of involvement in, or of being connected to a person involved in, serious crime to explain the nature and extent of their interest in particular property, and to explain how the property was obtained.'

Read the original text at Forbes.

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