LONDON — Britain’s sounding increasingly tough on former Chelsea Football Club owner Roman Abramovich’s frozen billions.
It wants to recoup £2.5 billion that the Russian oligarch made from the club’s sale more than three years ago and give it to Ukraine. A rare joint statement from top finance minister Rachel Reeves and Foreign Secretary David Lammy Monday night said the government is “fully prepared” to take legal action against him.
But legal experts are already expressing doubt about just how realistic the government’s threats are — arguing there’s no legal basis for the administration to claim and then pass on the proceeds.
The British government is likely to come up against the exact same issues it’s experienced since Russia’s full-scale invasion of Ukraine in February 2022: While it’s relatively easy to freeze oligarchs’ assets, seizing them is another matter entirely.
“We’re basically into the territory that we have with all these oligarchs, which is that you can’t just take money off people because you don’t like them,” said Tom Keatinge, director for financial security at the Royal United Services Institute (RUSI), a security think tank.
Chelsea was sold by Abramovich in 2022 to an American consortium. The move came after the U.K.’s Office of Financial Sanctions Implementation issued a license permitting the sale. Abramovich had to demonstrate he would not personally benefit from the transaction — but the proceeds have remained untouched in a British bank account due to semantics over whether they can be used to support Kyiv.
The U.K. government has been clear that the proceeds of the sale must be used for humanitarian purposes in Ukraine — but Abramovich wants the cash to go to “all victims of the war in Ukraine,” including those in Russia.
Abramovich was formally sanctioned in March 2022 for allegedly benefiting from close ties to Putin, a characterization he rejects.
He has never been charged with a crime related to his sanctioned assets. Therefore, the British government needs Abramovich’s consent to use the money as it remains his property. And there is little the government can do about it, according to one sanctions lawyer granted anonymity to speak about a legally sensitive topic.
“I just cannot see any possible substance by which they would have a cause of action against Abramovich, because the funds are sanctioned,” the lawyer said. “They’re still his assets, that’s not disputed.”
“The funds will not be transferred into anyone else’s hands, unless Abramovich chooses to give them away,” they added.
Missing: Legal basis
In their joint statement, Reeves and Lammy did not elaborate on what course of legal action they could take, saying only that the government “is determined to see the proceeds from the sale of Chelsea Football Club reach humanitarian causes in Ukraine, following Russia’s illegal full-scale invasion.”
They added: “We are deeply frustrated that it has not been possible to reach agreement on this with Mr Abramovich so far.”
“While the door for negotiations will remain open, we are fully prepared to pursue this through the courts if required, to ensure people suffering in Ukraine can benefit from these proceeds as soon as possible.”
The same sanctions lawyer cited above said it was difficult to assess the legal basis for the case given the lack of detail provided by the government. While they said it is not impossible the government had something significant it is not disclosing — such as a verbal or written agreement with Abramovich to send funds to Ukraine — they were skeptical: “I find it impossible to believe Abramovich would ever have said that to the U.K. government, or indeed, put it in a contract.”
Tan Albayrak, a sanctions lawyer at Reed Smith, agreed: “I do not see a legal basis, either way, because the funds are frozen. They cannot be used to fulfill any of the parties’ wishes.”
“In sanctions laws, frozen means frozen — and just that,” said Albayrak. “Normally, the funds can’t be distributed — neither according to Mr. Abramovich’s wishes nor to the U.K. government’s wishes,” he said.
Still, the £2.5 billion figure pales in comparison to the hundreds of billions of pounds frozen by the EU and U.K. since the Ukraine invasion in 2022. Despite bold statements, the British government is reluctant to sail into legally uncharted waters.
While Britain has frozen around £24 billion of Russian assets, and the EU has €200 billion, they have only gone so far as to use the interest gained on the funds to help Ukraine, rather than seizing them outright, and politicians remain deeply nervous about going any further.
In March, the Belgian Prime Minister said that to do so would be “an act of war” which could create “systemic risks to the entire financial world system.”
The sanctions lawyer quoted above thinks the government via the Reeves and Lammy statement “wants to show they’re not afraid to put their foot down on sanctions.” But, they added: “They don’t have a mechanism to do this. There’s no way of doing this via civil litigation at all.”
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