France, Belgium freeze Russian assets over Yukos case

Russian government condemns French and Belgian moves to seize Russian bank accounts and real estate

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

The Russian government on Thursday condemned Belgian and French moves to freeze Russian assets such as bank accounts and real estates in order to enforce its judgement ordering Russia to pay $50 billion to shareholders of the bankrupt oil company Yukos.

The Russian Foreign Ministry summoned the Belgian ambassador and warned that Moscow may retaliate against Belgian accounts in Russia in a similar manner.

Russian Economic Development Minister Alexei Ulyukakev told the Associated Press (AP) that his government would challenge the freezes. Although he admitted that Russia could face similar moves elsewhere, he reiterated that Russia has no intentions to pay the $50 billion.

An arbitration court in The Hague, Netherlands, ruled last year that Russia had forced Yukos – once owned by Kremlin dissident Mikhail Khodorkvsky – into bankruptcy through oversized tax claims and then sold its assets to state-owned companies such as Rosneft, and Gazprom.

The court ordered Russia to pay compensation to four shareholders of the Gibraltar-based Menatep Group which today exists as holding company GML, except Khodorkvsky himself who is no longer involved and is not a party to the damages.

Since Russia has refused to pay the damages, shareholders turned to other countries to enforce the ruling by freezing Russian state assets.

The Financial Times has reported that the accounts of some firms in Russian VTB bank’s French subsidiary have been frozen, citing the bank’s senior executive Mikhail Zadornov speaking on Russian television.

According to the report, the account of Russian state-owned RT television’s representative office in France was also among the frozen assets.

Executive director of main Yukos shareholder GML Tim Osborne told AFP that accounts in around 40 banks had been frozen as well as “eight or nine buildings.”

He also said that proceedings are already underway in Britain and the United states and “further countries will follow.”

“We still have to convince a legal court [in these countries] that our arbitration award should be recognized as the equivalent of a judgment in their court, so they can enforce it,” he said.

“We remain confident that we will win, and that we will collect if not all, then a substantial part, of the award — but it will take time.”

In a separate case last year, the European Court of Human Rights awarded minority shareholders of Yukos $1.9 billion.

However, Russia didn’t submit a compensation plan, missing the deadline last week.

TRTWorld and agencies