Russia Set for Global Asset Fight Over Yukos After Seizures

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Russia is bracing for more foreign asset seizures in a clash over the defunct Yukos Oil Co. after France and Belgium began enforcing a $50 billion damages award.

France confiscated insignificant funds in the accounts of Russian companies and diplomatic missions at the local subsidiary of OAO VTB Bank, Economy Minister Alexei Ulyukayev said Thursday. Earlier, Belgium served Russian state-owned lenders and entities with seizure notices as part of a 1.65 billion-euro ($1.9 billion) court ruling, ordering them to declare assets belonging to the Russian state or debts to it.

“These decisions have been politicized,” Kremlin economic aide Andrey Belousov said Thursday in St. Petersburg. “We forecast several countries will take analogous steps.”

The moves by the European Union members brings the former Yukos owners’ fight for restitution into focus as Russia kicked off its premier investor forum in President Vladimir Putin’s hometown of St. Petersburg. Yukos, once Russia’s top oil producer, was dismantled amid billions of dollars of back-tax claims that former owner Mikhail Khodorkovsky called a response to his political activities.

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The Permanent Court of Arbitration in The Hague ruled last July that Russia is liable to pay almost half of the $103 billion plus interest sought by GML Ltd., a holding company belonging to four former owners who don’t include Khodorkovsky.

Russia’s appeal of the decision may be heard in November, Finance Minister Anton Siluanov told reporters, while Ulyukayev ruled out paying the damages. Lawyers and government agencies are studying the Belgian ruling, Kremlin spokesman Dmitry Peskov told reporters.

While the asset freezes are unlikely to affect the Bank of Russia’s international reserves, keeping the cash pile outside of U.S. or EU assets is under consideration, Siluanov said. “No such decision has been taken so far, we believe that we can keep the existing structure for now,” he said.

Belgium’s ambassador to Moscow was summoned over the freezes, the Russian Foreign Ministry said on its website.

“The Russian side will be forced to consider taking adequate response measures against properties of the Kingdom of Belgium” if it doesn’t unfreeze the assets, the ministry said.

The Yukos plaintiffs are targeting Russian government assets in France and Belgium that aren’t protected by diplomatic immunity in a process that could take years to resolve, GML Director Tim Osborne said by phone from London.

“We are not in this for a Pyrrhic victory,” he said. “We haven’t ruled out other jurisdictions, but they will be more difficult” because of local laws on asset seizure.

Austria has also sought to freeze Russian assets, RIA Novosti reported, citing the Austrian ambassador to Russia.