The Supreme Court determined last week that a funding arrangement used to help people get Investor visas did not meet the standards of the immigration laws. The decision in R (on the application of Wang) v. Secretary of State for the Home Department [2023] UKSC 21 overturns the Court of Appeal’s ruling and reinstates the original Upper Tribunal verdict.
As a result of the ruling, Ms. Wang and more than 100 other people who are said to have taken part in the same financing scheme would not be eligible for visas. Given that the entire investor programme was cancelled in February 2022, the ruling has little wider importance in terms of how the investor visa requirements should be interpreted. However, certain holders of golden visas who have applications for extensions pending or due soon may be impacted.
For two reasons, it is worthwhile to step back and think about the verdict. One is to draw attention to the issues with the investment program’s design. The other is what we might refer to as the Home Office’s or the Supreme Court’s “cake-ist” method of interpreting immigration laws.
Designing a Programme For Investors
The general idea behind an investor programme is to persuade wealthy individuals to invest in the economy of the target nation in exchange for a visa. If the investments aren’t worthwhile or genuine, all that’s really going on is that affluent people are acquiring visas.
The UK Investor Programme debuted in 1994 and underwent several revisions. In 2014, there was a significant shift in strategy that increased the investment requirement from £1 million to £2 million and tightened the restrictions to address money laundering concerns.
The “Maxwell” strategy is the one that the Supreme Court found in Wang did not adhere to the immigration regulations. Any financial scheme being referred to as “Maxwell” can raise some first suspicions. In essence, those applying for investor visas would borrow £1 million from Maxwell Asset Management Ltd, which is controlled by Mr. Dimitry Petrovich Kirpichenko, a Russian person, with the understanding that Eclectic Capital Ltd, which is owned by Mrs. Nika Kirpichenko, also a Russian national, would receive payment. The Kirpichenkos were a married couple. The funds were transferred to Eclectic Capital Ltd., where they were primarily invested in Russian businesses.
As a result, the system allowed for the borrowing of funds, but the borrower had no control over where the funds were put. Instead, they were handed to the wife of the first company’s owner and invested in Russian firms rather than British ones. It was consequently obvious that it did not fulfil the program’s general objectives for British investment visas.
The legal dispute centred on whether the immigration regulations were followed exactly, and consequently, whether they were well-written enough to achieve the goal of the scheme. The rules, according to the Upper Tribunal, were poorly written but nonetheless served their intended purpose. In contrast, the Court of Appeal determined that the plan nearly complied with the strict, technical criteria of the regulations. The Upper Tribunal was supported by the Supreme Court.
As a result, there are lessons to be learnt about how this type of scheme is designed, the rules are written, and compliance is tracked. Although there doesn’t appear to be any immediate chance of a similar programme being implemented again, the lessons learned go beyond investor visas. Any sort of visa must be designed and written with great care in order to prevent unforeseen consequences. That calls for patience, consultation, and oversight—all things the Home Office doesn’t appear to be particularly good at.
An Absurd Interpretation of Immigration Laws
With specific reference to Mahad v Entry Clearance Officer [2009] UKSC 16 and MO (Nigeria) v Secretary of State for the Home Department [2009] UKHL 25, Wang goes through the motions of referencing prior authority on the interpretation of immigration rules. We are reminded that the regulations have a special legal position and that because they are declarations of the Secretary of State’s policy, they should not be applied as strictly as traditional law.
The rules that make up the points-based system, according to Ms Wang’s attorneys, are quite different. By enacting rigorous check box rules, which create predictable results but may occasionally result in unfairness, they represent policy rather than a broad policy through their specific terms and phrases.
Their source for support for this claim was the Home Office itself, which had received support in numerous Court of Appeal cases.
In essence, the Home Office has demonstrated its ability to insist on a strict check box method in order to reject applications, as well as its ability to insist that the tick box standards provide enough latitude to reject further applications. The Home Office gets to have its cake and eat it, which is why I refer to it as a cake-ist approach to interpretation. The courts have given in to the Home Office and shown their customary respect.
Some people might find my portrayal of them in this article unfair. There can be little question that the courts take a highly subservient stance towards the Home Office, despite the fact that there may be sound (though debatable) reasons for it. I believe it is more so than in other areas of public law. Although this is a constant, it necessitates that the courts take somewhat varying tactics in various circumstances.
Recently, I’ve been reflecting on what, properly or wrongly, I believe to be the absence of a recognised field or school of immigration law. Despite having numerous distinctive aspects, immigration law is regarded as a branch of public law. We have Macdonald’s, which is aptly referred to as “the practitioner’s Bible,” the Journal of Immigration, Asylum and Nationality Law, and a few colleges provide courses in immigration law. However, if it’s compared to something like employment law, we lag far behind. Perhaps a more rigorous academic approach to immigration law could aid in improving the case law’s clarity of reasoning.
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Written by:
Ghulam Mustafa
Director, Barrister