Sun, Jun 21, 2015 - Page 13 News List

Russia threatens reprisals over asset freeze

‘HIGHWAY ROBBERY’:The accounts of Russian government offices in Belgium were frozen over legal claims by Yukos shareholders over US$50 billion in compensation


Moscow on Friday threatened to retaliate against state-linked foreign firms operating in Russia after its official assets in Western Europe were frozen over legal claims by former Yukos oil company shareholders.

Russian officials said state accounts had been frozen in Belgium, and representatives of claimants from the defunct oil firm said Russian assets were also blocked in France.

The former shareholders are trying to collect some of the record US$50 billion in compensation awarded to them by an arbitration court last year for the way Russia seized and dismantled the company after arresting Yukos owner and prominent Kremlin critic Mikhail Khodorkovsky in 2003.

However, Russian President Vladimir Putin stressed that “Russia does not recognize the authority of this court” and vowed instead to defend against the seizures.

“We will defend our interests by the route of justice,” Putin said.

The Russian leader did not specify what the legal route entails, but earlier Russian Minister of Foreign Affairs Sergei Lavrov had said in televised comments that Russian entities impacted by the moves were preparing to go to court to force the freezing of the assets of “foreign companies with government involvement” in Russia.

In Belgium, accounts of the Russian embassy in Brussels and representative offices at the EU and NATO headquarters were among those affected, the Russian Ministry of Foreign Affairs said on Thursday.

In France, accounts in about 40 banks were frozen along with eight or nine buildings, Tim Osborne, executive director of the main shareholder, GML, told reporters.

“Russia is working on it. What our response will be — time will tell,” Russian Deputy Minister of Foreign Affairs Vasily Nebenzya told the Interfax news agency, adding that “whoever acts like this has to understand that there will be a counterreaction.”

The head of Russia’s parliament, Sergei Naryshkin, described the asset freezes in Europe as “highway robbery.”

The row came as relations between Russia and the EU sank to a low over the conflict in Ukraine, with the Europeans accusing Moscow of supporting and arming the rebellion in the east of the former Soviet state — a claim that Russia denies.

In response to the moves in Belgium, Moscow summoned the Belgian ambassador to explain the action, and threatened “reciprocal measures targeting Belgian assets in Russia.”

The Belgian Ministry of Foreign Affairs said the seizures had been conducted by bailiffs without the involvement of Belgium’s government, but Moscow dismissed that claim. State-run bank VTB Bank said on Thursday that some of the accounts of its affiliate in France had been frozen. VTB chief Andrei Kostin insisted on Friday that he saw the move as “more of a judicial issue than a political one.”

There was no further confirmation of any other asset freezes in France from officials in Moscow or Paris.

Yukos was once Russia’s biggest oil company, but was broken up after the arrest in 2003 of its owner, Kremlin critic Khodorkovsky. Khodorkovsky was released in 2013 following a decade in prison after a presidential pardon.

Last year, the Permanent Court of Arbitration in The Hague ruled that Moscow had forced Yukos into bankruptcy with excessive tax claims before selling its assets to state-owned firms. It ordered Russia to pay Yukos shareholders a record US$50 billion in compensation.

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