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France freezed Russian assets

June 18, 2015

French authorities have seized dozens of bank accounts and several buildings owned by the Kremlin, shareholders of now-defunct oil giant Yukos have said. The Belgian government is said to have taken similar steps.

People walk by the Yukos oil company headquarters in Moscow on July 8, 2004
Image: Reuters

France has frozen Russian government assets, as Paris seeks to enforce a 2014 court ruling ordering Moscow to pay compensation to shareholders of now-defunct oil giant Yukos, which the Kremlin forced into bankruptcy in 2006.

The move was relayed by executive director of main shareholder GML, Tim Osborne, who said Thursday that "eight or nine buildings" had been seized along with some 40 bank accounts.

He added that French authorities had intervened two weeks ago, but that the news had only been "leaked" to Russia on Thursday. Neither Moscow, nor Paris have confirmed the reports.

"Proceedings are already under way in Britain and the United States and further countries will follow," Osborne said.

The statement comes on the same day the Kremlin announced it was looking into similar reports, claiming that a Belgian arbitration court had sided with a group of former shareholders about freezing Russian state property worth 1.65 billion euros ($1.9 billion).

"We are now in the most careful manner examining all circumstances of the claim," Kremlin spokesman Dmitry Peskov said on Thursday.

Putin's wrath

The dispute between Moscow and the shareholder dates back to mid-2000, after the Russian government broke up and began auctioning off Yukos' assets to other state-owned firms. Yukos was Russia's biggest oil company at the time, and was headed by the country's richest man, who was also one of President Vladimir Putin's staunchest opponents, Mikhail Khodorkovsky.

Khodorkovsky was arrested at gunpoint in 2003 on allegations of tax evasion, in what many critics see as a warning shot by Putin meant to intimidate his detractors.

But in 2014 the Permanent Court of Arbitration in The Hague ruled unanimously to award $50 billion (37.2 billion euros) in damages to shareholders to subsidiaries of Gibraltar-based Group Mentap, through which Khodorkovsky ran Yukos. Group Menatep today exists as holding company GML.

The Hague's ruling followed decisions that Moscow had used its legal and tax system to unfairly target Yukos, handed down by the European Court of Human Rights and the Arbitration Institute of the Stockholm Chamber of Commerce, which is an established neutral body used by Russia and the West since the 1970s for trade disputes.

pad/uhe (AP, AFP, Reuters)