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Russia Threatens Tit-For-Tat Response To European Asset Inquiries

  • Robert Coalson

Since the Yukos arbitration ruling, Russian Foreign Minister Sergei Lavrov has indicated that Moscow may take retaliatory action against the assets of foreign companies.

Since the Yukos arbitration ruling, Russian Foreign Minister Sergei Lavrov has indicated that Moscow may take retaliatory action against the assets of foreign companies.

Tensions continue to mount between Russia and the West after Belgium, France, and Austria took steps this week to freeze Russian government assets to cover a settlement ordered by a European arbitration court in July.

Russian Foreign Minister Sergei Lavrov, speaking to journalists in St. Petersburg on June 19, said affected Russian entities "intend to file claims with a Russian court seeking for similar actions to be taken in the Russian Federation to seize the property of foreign companies with state capital in response to the illegitimate actions taken against them."

Lavrov said Moscow is not satisfied with the explanations it has received from the Belgian Foreign Ministry.

He said the seizure of Russian accounts in Belgium "totally contravenes...conventions on diplomatic relations" and that the action might have been "timed specially to the St. Petersburg Economic Forum" in order to "obstruct this cooperation" between Russian and Western companies.

On June 17, court bailiffs in Belgium informed 47 Russian entities-- including diplomatic representations, Russian companies, and the representation of the Russian Orthodox Church -- to provide information about any Russian state assets they control. No assets have been seized and Belgian authorities have not commented.

The move was initiated to enforce a July 18, 2014, ruling by an arbitration court in The Hague awarding nearly $50 billion to former Yukos shareholders.

Moscow expects other Western countries to take measures similar to those initiated in Brussels. Russia has said that it will file a countersuit against the former Yukos shareholders' claims.

Yukos was dismantled following the 2003 arrest of its former owner, Mikhail Khodorkovsky, on fraud and tax-evasion charges. Russian courts seized and sold off Yukos's assets, most of which ended up in the hands of Russian state oil company Rosneft.

Khodorkovsky spent 10 years in prison, maintaining his innocence and saying his prosecutions were politically motivated. He was pardoned by President Vladimir Putin in December 2013 and now lives in self-imposed exile in Switzerland.

'Bewildering' Russian Stance

Former Russian Finance Minister and influential economist Aleksei Kudrin, also attending the St. Petersburg forum, told Dozhd TV that he does not think Western countries will seize the assets of Russian companies.

"These are joint-stock companies and they have many shareholders besides the state," Kudrin said. "If you arrest the property of Gazprom or Aeroflot or Rosneft, foreign shareholders would suffer as well."

He added that the Russian government itself owns very little non-diplomatic property in foreign countries and that cultural-exchange programs might suffer the most.

Kudrin also said "the very fact that several countries have undertaken the forcible enforcement of a decision of an international court -- which is obligatory for Russia -- is already a negative factor for our investment climate."

Russian lawyer Karinna Moskalenko, speaking to RFE/RL's Russian Service, also expressed bewilderment that Russia has refused to abide by the arbitration court's ruling.

"Russia itself selected a judge and this is a foundation of the legitimacy of the court," Moskalenko said. "If Russia entrusted this court to become involved in this dispute as an independent arbiter, that means its decisions must be carried out."

She added that Moscow's refusal to comply could be costly in the end.

"If they don't comply, creditors will use compulsory methods," she said. "Many economists say that the compulsory enforcement of the ruling could be nearly twice as expensive because of the way the value of the assets is calculated."

Russia To Leave ECHR?

Some Russian state media have erroneously reported that the moves to seize Russian assets were made to enforce a completely separate July 31, 2014, ruling by the European Court of Human Rights (ECHR) that awarded 1.8 billion euros to Yukos shareholders.

Moskalenko speculated that had been done intentionally by those in the Kremlin who seek to withdraw from the Strasbourg court and the Council of Europe.

"Some want Russia out of the Council of Europe and an end to the ECHR's jurisdiction over Russia," she said. "Some absolutely don't want Russia within any system of rights where it has to pay for violations. The government does not want people to have a real mechanism for protecting their human rights or resisting lawlessness."

Despite the discussion of tit-for-tat measures, the official Russian reaction to the threatened asset seizures has been restrained.

Nongovernment figures, however, have been more forceful.

"I can't say anything about idiots," said Russian Railways head and oligarch Vladimir Yakunin, "except to advise them to seek psychiatric help."

Kremlin-friendly analyst and former State Duma deputy Sergei Markov declared the move "a new stage in the hybrid war against Russia."

In a post on Facebook, Markov said the Yukos decision is just a pretext and that "other pretexts will be found."

"Russia is guilty in the eyes of the West merely because it exists," he wrote.

Political scientist Igor Panarin, noted for his frequent predictions that the United States is on the verge of imminent dismemberment, also wrote on Facebook that the Belgian and French moves are part of a "hybrid war" against Russia, claiming that this "war" is being organized by United Kingdom.

He listed eight aspects to this hybrid war, including the organization of an uprising against Putin, the "mobilization of the information resources of the West," and the "activization of the fifth-column, pro-British agents of influence in Russia (nationalists and pseudo-religious structures, nongovernmental organizations, etc.)."

With reporting by RFE/RL's Russian Service, Reuters, ITAR-TASS, and Interfax
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