Senior Russian officials said Kremlin lawyers are studying France and Belgium’s seizure of Russian government assets in the two countries as part of a court settlement to compensate shareholders of Yukos, the privately owned oil company that was shut down by Moscow.
The Permanent Court of Arbitration in The Hague ruled in July 2014 that Russia owes $50 billion to the shareholders for confiscating the assets of Yukos in 2003, then Russia’s largest oil producer, and giving them to the state-run oil company Rosneft.
Yukos had been operated by Mikhail Khodorkovsky. Once he was the country’s richest entrepreneur but was arrested on charges of tax violations in 2003 and sentenced to prison in 2005. He was only released after President Vladimir Putin pardoned him in December 2013.
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Khodorkovsky argues that the case against him and Yukos was merely revenge for his political opposition to Putin. The court in The Hague agreed, saying the case against both Khodorkovsky and Yukos was politically motivated.
The Yukos shareholders, represented by GML, Yukos’ former holding company, said it would be very difficult to persuade the Russian government to reimburse them. In fact, Russia has refused to pay the damages, so the shareholders persuaded courts in Belgium, Britain, France and the United States to enforce the ruling piecemeal.
The Russian news agency Interfax reports that former Yukos shareholders say they are owed $1.9 billion of Russian state property in Belgium. It wasn’t immediately known how much was owed from Russian assets in France.
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Russian Economy Minister Alexei Ulyukayev said June 18 that France had frozen a small amount of money in bank accounts held by Russian companies and diplomatic missions at the local subsidiary of the Russian bank VTB. He said Belgium had served seizure notices to Russian state-owned lenders and other entities ordering them to declare assets belonging to the Russian state.
In Moscow, government spokesman Dmitry Peskov said Kremlin lawyers were “in the most careful manner examining all circumstances of the claim.”
An economic aide to Putin, Andrei Belousov, said in St. Petersburg that the actions by France and Belgium were politicized, but added, “We are concerned. We expect a number of countries to take similar measures.” Ulyukayev simply dismissed the asset freezing as unlawful.
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The actions by France and Belgium come as Russia opens a key international forum on the investment climate environment in Russia in St. Petersburg, Putin’s hometown. Peskov said, however, that he believes the actions by Paris and Brussels were a mere coincidence.
“This has nothing to do with the investment climate in Russia,” the Kremlin spokesman said. “Business circles are interested in Russia, as evidenced by the guest list of the forum.”
Khodorkovsky, who now lives in exile in Switzerland, reacted to the reports about the frozen assets on Twitter, saying, “I expect that the money will be spent on projects that will benefit Russian society.”
By Andy Tully of Oilprice.com
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Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com