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Russia warns of retaliation for Yukos overseas asset freeze

Published on 19/06/2015

Moscow threatened Friday 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 $50 billion (44 billion euros) 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.

Foreign Minister Sergei Lavrov 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 European Union and NATO headquarters were among those affected, the Russian foreign ministry said Thursday.

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

“Russia is working on it. What our response will be — time will tell,” deputy foreign minister Vasily Nebenzya told Interfax news agency, adding that “whoever acts like this has to understand that there will be a counter reaction.”

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

– ‘More judicial than political’ –

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 foreign ministry said the seizures had been conducted by bailiffs without the involvement of Belgium’s government, but Moscow dismissed that claim.

State-run VTB bank said 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 Mikhail Khodorkovsky.

That came shortly after President Vladimir Putin warned Russia’s growing class of oligarchs against meddling in politics.

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 $50 billion in compensation.

Russia was told to pay compensation to shareholders in subsidiaries of Gibraltar-based Group Menatep, through which Khodorkovsky ran Yukos.

The group exists today as holding company GML, although Khodorkovsky is no longer involved and is not a party to the compensation claim.

GML’s Osborne said that proceedings were “already underway in Britain and the United States and further countries will follow.”

He explained that legislation in Belgium and France made it easier to freeze assets pending the outcome of the Yukos compensation dispute.