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3rd Jul 2022

Russian assets up for grabs after Yukos ruling in Paris

  • Khodorkovsky, a Kremlin critic in exile, at the European Parliament last year (Photo: europarl.europa.eu)

Russian-French relations will be tested after a Paris court on Thursday (17 December) said former Yukos shareholders can continue to freeze Russian assets.

The Paris Court of Appeal denied a Russian request to suspend the process, pending the outcome of a broader legal challenge, due late next year.

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The shareholders of the giant oil firm, which Russia broke up a decade ago, in recent months targeted 40 Russian state bank accounts and 10 buildings, mostly in Paris, including Russia’s mission to the UN heritage body, Unesco.

Some assets will now be held by the Caisse des Depots et Consignations, a French state financial body, French news agency AFP reports.

The shareholders, Russians who live in Israel, but who act via a holding firm, GML, in Gibraltar, have launched similar proceedings in Germany, the UK, and the US. Proceedings in Belgium briefly froze the bank accounts of Russia’s EU, Belgian, and Nato missions.

“[We] will continue to attach property belonging to the Russian Federation,” the shareholders said in a statement on Thursday.

The asset freezes come after an arbitration tribunal in The Hague, last year, awarded them $50 billion in damages over Russia’s violation of the Energy Charter Treaty, an investor protection pact.

The freezes also targeted Russia’s stake in the Euronews TV channel and the accounts of Russian state media Tass, VGTRK, and Russia Today.

For its part, Russia has challenged the applicability of The Hague decision in EU jurisdictions.

Its foreign ministry, in June, called the Belgian freezes an “openly unfriendly act, [a] gross violation of the universally recognised norms of international law." Its foreign minister, Sergei Lavrov, threatened "similar actions to be taken in the Russian Federation to seize the property of foreign companies with state capital."

The Yukos affair goes to the top of Russian politics.

Russian president Vladimir Putin dismantled the firm in his first term in office. He also jailed the former Yukos CEO, a Kremlin critic, who now lives in exile in London, for 10 years.

Most Yukos assets were transferred to state oil firm Rosneft. Igor Sechin, a Putin confidante and former deputy PM, then became Rosneft CEO.

Rosneft and Sechin were named in EU and US sanctions over Russia’s invasion of Ukraine.

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