Saturday

2nd Jul 2022

New French law would shield Russian assets

  • Paris: Action by former Yukos shareholders prompted Russian warning to French judges (Photo: DinosaursAreNotDead)

The French government is trying to pass a law that would help Russia to protect its assets from being frozen in business conflicts.


A government amendment to a bill on transparency and the fight against corruption says that assets could be frozen only if the state that owned them "has expressly agreed to the implementation of such a measure".

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The amendment also says that assets can be frozen only when they are "specifically used by the state for other purposes than non-commercial public service".


The bill comes after former shareholders of Yukos, the giant Russian oil firm broken up by Russia more than 10 yes ago, won $50 billion in damages from Russia in an arbitration tribunal in The Hague last year.

Judges said Russia had violated the Energy Charter Treaty, an investor protection pact, when they dismantled the oil company, which had been run by Mikhail Khodorkovsky.

Khodorkovsky, an oligarch who became a Kremlin critic, was also jailed for 10 years on tax evasion charges.

He now lives in the UK and is still a prominent opponent of Russian president Vladimir Putin.

The ex-Yukos group had used The Hague ruling to try to seize Russian assets, such as foreign bank accounts or the building of the Russian embassy to Unesco, a UN heritage body based in France, in lieu of the $50 billion fine.

It is taking similar action in Belgium, Britain, Germany, India and the US.

Last December, a French court rejected Russia’s appeal to suspend the asset-freezes.

According to France Info radio, the Russian government threatened France with retaliations after it lost the appeal.

France Info radio said it had seen a letter sent in March by the Russian foreign minister to the French embassy in Moscow saying that "any attempt to apply measures … with regard to Russian assets … will be considered as giving right to adoption of appropriate and proportionate measures with regard to the French republic".

"The ministry of foreign affairs will be grateful if the embassy could bring the content of this note to the attention of the French tribunal," the minister added.

His proposal to warn French judges of the consequences of their decision ignored the separation of political and judicial powers that is normal in France and in Europe more broadly.

The anti-asset freezing bill is currently under discussion in the National Assembly, with a vote expected later this month.

Russia also won a legal victory in April when a Dutch district court overturned the decision of The Hague tribunal. But the ex-Yukos group is to appeal the district court verdict in a higher tribunal.

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