Moscow furious after both Belgium and France freeze Russian state assets!

MOSCOW, Russia (PNN) - June 18, 2015 - Russia has summoned the Belgian ambassador to Moscow and threatened to “respond in kind” after bailiffs instructed nearly 50 Belgian companies to disclose Russian state assets, a move which reportedly sets the stage for the seizure of Russian property in connection with the disputed $50 billion Yukos verdict. Essentially, Russia was required to submit a plan for a €1.6 billion payment pursuant to the ECHR decision by June 15, and because Moscow did not do so, Belgium will attempt to extract the payment on its own.

The bailiffs were reportedly acting at the behest of the Isle of Man-based Yukos Universal Limited, a subsidiary of the Russian energy giant, dismantled in 2007. They have given the target companies a fortnight to comply.

Russia will appeal the court’s arrest of Russian property, Russian presidential aide Andrey Belousov said. According to the official, “the situation with the arrest of the property is politicized, [and] Moscow hopes to avoid a new escalation in relations.”

A letter accompanying the notice, reportedly drafted by the law firm Marc Sacré, Stefan Sacré & Piet De Smet, accused Moscow of a “systematic failure to voluntarily follow” international legal judgments.

The addressees included not just local offices of Russian companies, but international banks, a local branch of the Russian Orthodox Church, and even Eurocontrol, the European air traffic agency headquartered in Brussels. Only diplomatic assets, such as embassies, were exempt.

The situation was not unexpected, and Russia is considering a number of measures to deal with possible asset seizures both in Belgium and in other countries, said Andrey Belousov, an aide to Russian President Vladimir Putin.

Yukos Universal Limited was awarded $1.8 billion in damages by the Permanent Court of Arbitration in The Hague in July 2014, as part of a total settlement for approximately $50 billion, owed to its former shareholders and management. The court concluded that the corporation, once headed by Mikhail Khodorkovsky, who spent more than a decade in prison for embezzlement and tax evasion from 2003 to 2013, “was the object of a series of politically motivated attacks.”

Russia has not accepted the ruling, saying it disregards widespread tax fraud committed by Yukos, and constitutes a form of indirect retribution for Russia’s standoff with the West over Ukraine.

France also froze the accounts of Russian companies on Thursday, targeting Russian firms run by a French subsidiary of the country's second largest lender.

French law enforcement has frozen the accounts of Russian companies operated by the French subsidiary of VTB, Russia’s second-largest bank, said CEO Andrey Kostin. Diplomatic accounts were briefly frozen as well, but have since been unlocked. “As of this morning [diplomatic accounts] were unfrozen. The sums are small, some dozens of thousands of euros, [but] Russian companies' accounts are still frozen,” the bank chief was cited as saying. “We are working on the problem with our lawyers now.”

The response from the Kremlin:

“[Remove the violations]. Otherwise, the Russian side will be forced to consider taking adequate response measures against properties of the Kingdom of Belgium, including properties of the Belgian embassy in Moscow, as well as of its legal entities.”

We imagine this will only serve to further inflame tensions between Russia and Europe amid escalating violence in Ukraine and an increasingly aggressive stance towards the Kremlin on the part of Washington and NATO.