In what is arguably the most significant move against Russian wealth and influence in Europe, Belgium, France and Austria today all froze various assets belonging Russian state-owned enterprises in connection to civil case the Kremlin lost a year ago and for which it has refused to ante up damages. The winner of that case, Yukos, once Russia’s largest oil company, was awarded $50 billion in July 2014 after an international arbitration court found that it had had its own assets expropriated by the Russian government over a decade ago.
The freeze affects the state wire service TASS, the state media holding company Rossiya Segodnya, and other state media abroad.
“We are working on this issue within the framework of a common government policy,” TASS said in a press statement, refusing to provide more details.
Gazeta.ru learned that court notices about the freeze were received at TASS editorial bureaus in Belgium and France.
Margarita Simonyan, editor-in-chief of Rossiya Segodyna, which publishes RT.com, told Gazeta.ru the situation with her company was similar. “The arrest was place on our account in France,” she said. “As for the other countries, after the situation in France, the company was concerned to take measures not to allow the halt of our radio and online broadcasting work there.”
Simonyan, however, disputed the account of the freeze given by Russian Forbes, which initially claimed that properties were frozen. She confirmed to Forbes.ru what Gazeta.ru also reported, that it was RT's bank account in France that was frozen, not any property.
Simonyan went a long Twitter tirade today against the magazine, demanding it issue a correction or retraction to its claim. In a press statement, she said that “neither RT nor its subsidiaries own buildings in France…Furthermore, RT is an autonomous non-commercial organization which is not a Russian state institution. they have not made any claims to RT in this case.”
But Forbes.ru has not changed its story, although it currently contains some quotes from Simonyan, which apparently were added after the piece first broke. She claimed that Russia state media had taken precautions earlier to prevent just such blocking of their broadcasting abroad, although she declined to reveal the details.
Meanwhile, Tim Osborne, the head of Group Menatep Ltd, the holding company for Yukos, confirmed the asset seizures to Forbes:
“According to my information, it's a question of seizure of a building in which the television channel RT (the former Russia Today) is located in Paris, said Osborne. There are also several buildings in Paris which are the property of the Russian Federation, and that is one of them, he explained. Furthermore, in the event that the television channel does not pay damages to the government, it will also be frozen. Regarding the salary of employees, Osborne explained that the freeze would not affect them since they are employees and not property of the state.”
Meanwhile, Andrei Kostin, head of state-controlled VTB Bank, said that a week ago, accounts of Russia companies and diplomatic missions were frozen at his bank’s French subsidiary. The accounts of the missions were then unfrozen in keeping with the Vienna Convention but the rest of the properties were seized.
European authorities have cast a wide net with their determination to freeze Russian assets, and some are arguing that it may be too wide.
Aleksandr Mineyev, Novaya Gazeta's correspondent in Brussels, said a process-server came to his door this morning and served him notice that he must report any Russian Federation state property or funds in his possession. He explained that Novaya Gazeta, an independent non-state paper, doesn't have any Russian state assets.
Attached to the notice was a list of all the other persons served, including Aeroflot, the archbishop of the Russian Orthodox Church in Brussels and the Belgian Orthodox church and other non-governmental media. Diplomatic missions were excluded. The document stated that the court notices were from a Belgian arbitration court regarding the Yukos judgment.
Since the Russian government had not responded to the judgement in more than a year, authorities were freezing Russian assets, the notice said.
Mineyev said many in the list were not Russian organizations, but banks or other institutions such as insurance companies or Eurocontrol, which manages air traffic control in Europe, that might have Russian accounts.
The Belgian court cited a decision from the European Court of Human Rights which demanded that the Russian Federation submit a plan to pay all the sums indicated in its decision and to make the payments no later than June 15, 2015.
Yukos was founded by former political prisoner and businessman Mikhail Khodorkovsky who is today a major critic of Vladimir Putin. Khodorkovsky was arrested in 2003 and convicted of theft and tax evasion in 2005. He ultimately served 10 years in jail before being pardoned by Putin over a year ago. And while he was not a plaintiff or beneficiary in the arbitration case, he nonetheless welcomed the asset freezes today in a tweet reading, “Happy over the arrests of property of our bureaucracy in Belgium. I expect that the funds recovered will go to projects useful for Russian society.”
Yukos, once worth $40 billion, was broken up and nationalized, with most assets handed to Rosneft, headed by Putin crony Igor Sechin. Rosneft has been placed under E.U. and U.S. sanctions for its role in the Ukrainian war, and Sechin has been additionally sanctioned by the U.S.
(Note: This article is adapted from two posts published at The Interpreter, an online translation and analysis journal sponsored by the Institute of Modern Russia, which Mikhail Khodorkovsky’s son heads.)
