Monday, June 27, 2016


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Russia Reacts Furiously After State Asset Freezes In Belgium, France

In July, an international arbitration court in The Hague ordered Russia to pay about $50 billion to former Yukos shareholders.
In July, an international arbitration court in The Hague ordered Russia to pay about $50 billion to former Yukos shareholders.

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Russia has reacted angrily to what it says is a decision by Belgian authorities to freeze the bank accounts of Russian diplomatic missions in Brussels and other organizations, moves Moscow described as “openly hostile” actions.

Russia’s Foreign Ministry said on June 18 that it had summoned Belgium’s ambassador in Moscow, Alex Van Meeuwen, to express Moscow’s protest over the actions, which the ministry said affected Russia’s EU and NATO representative offices, as well as "a number of other Russian organizations" in Belgium.

"The Belgian ambassador was told that Russia considers such action by the Belgian authorities as an openly hostile act," the ministry said.

A day earlier, Interfax and other Russian media outlets reported that Belgian court bailiffs notified dozens of companies and other organizations of Belgium’s plan to freeze Russian state assets to cover a settlement compensating shareholders in the now-defunct Russian oil company Yukos.

Meanwhile, Russian officials and executives at state-run companies said Russian government bank accounts had been frozen in France as well.

In July, an international arbitration court in The Hague ordered Russia to pay about $50 billion to former Yukos shareholders, ruling that Russia violated the 1991 international Energy Charter when it shut down the company and auctioned off its main assets in 2004.

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

Khodorkovsky spent a decade in prison due to prosecutions widely seen as politically motivated. He was pardoned by Russian President Vladimir Putin in December 2013 and has publicly accused the Kremlin of engineering his arrest and Yukos's downfall.

Tim Osborne, the director of GML, a holding company created by the five major shareholders in Yukos, told AP that The Hague judgment was "rolling out" in France and Belgium and is likely to continue in Britain and the United States.

"It'll take years, but it'll get done eventually," Osborne said.

Osborne told AP that French authorities began freezing multiple bank accounts linked to the Russian state more than a week ago, while Belgium started on June 17.

He said did not know how many accounts had been frozen or their balances but that he expects GML will ultimately recover the funds.

Osborne told Reuters that Russia "has made no effort to contact us to try and discuss [the $50 billion award] and has made it very clear that they are not going to pay it, so we are left with no choice but to enforce it."

The Russian state-owned media behemoth Rossia Segodnya had its accounts frozen both in Paris and Brussels, according to a June 18 report by RIA Novosti, which operates under the umbrella of the news conglomerate.

Rossia Segodnya editor in chief Margarita Simonyan said the organization has “taken measures” to ensure that its radio and online news coverage in other countries is uninterrupted.

The head of a subsidiary of Russian bank VTB, Mikhail Zadornov, said in a June 18 interview with Rossiya-24 television that the accounts of Russian companies and diplomatic missions were frozen at the bank's French subsidiary a day earlier.

Zadornov added, however, that the diplomatic accounts were unblocked.

Kremlin aide Andrei Belousov told reporters at an economic forum in St. Petersburg on June 18 that the Russian government is “concerned” about the situation and that Moscow expects “a number of countries to take similar measures.”

Kremlin spokesman Dmitry Peskov, meanwhile, said the government and its lawyers would look into the issue.

"We are now in the most careful manner examining all circumstances of the claim," Peskov said.

Khodorkovsky, who now lives in self-exile in Switzerland and is backing political opponents of Putin, welcomed news of the moves to seize Russian assets.

"I expect that the money will be spent on projects that will benefit Russian society," Khodorkovsky said on Twitter.

With reporting by AFP, AP, Reuters, Interfax, RIA Novosti, Vedomosti, and rbc.ru

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