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20 Jun, 2015 09:51

Russia will ‘protect its interests’ in European assets freeze – Putin

Russia will ‘protect its interests’ in European assets freeze – Putin

Russia will challenge the decision to seize its state assets abroad, President Vladimir Putin has said, adding that the country doesn’t recognize the ruling of the court in The Hague, as it doesn’t participate in the European Energy Charter.

"We cannot but react to this [arrest of foreign assets - Ed.]. We will protect our interests," said Putin at a meeting with the heads of international news agencies at the 2015 St Petersburg International Economic Forum.

The decision of the Arbitration Court in The Hague can be valid only with respect to those countries that have signed and ratified the European Energy Charter, Putin added.

"Russia hasn’t ratified the charter, so we do not recognize the court’s jurisdiction," Putin said, adding that the country will resolve the issue "within the framework of a civilized legal process."

READ MORE: France freezes Russian state assets, Moscow plans to appeal

Putin said he believed that there was nothing new in the fact that Yukos shareholders are trying to win cash payouts from the Russian government.

“We faced it in the past with this company and our other partners," he said, recalling the case with Swiss company Noga.

Noga sued Russia in the 1990s over Moscow allegedly failing to supply oil products worth $ 1.5 billion in exchange for consumer goods. As a result, France arrested Russian state accounts and the property of Russian institutions and companies (including the Russian Embassy in Paris). However, Noga withdrew all its claims against Russia a few months later.

The decision to freeze Russian assets was connected to the case of Yukos Universal Limited, a subsidiary of the Russian energy giant that existed from 1993 to 2007.

READ MORE: ‘Mega-arbitration’: Court orders Russia to pay $50bn in Yukos case

The state assets were seized to secure payment of a contested Russian debt to the former owners of Yukos. The company went bankrupt after the Russian government demanded that it paid due taxes that it had been evading for years.

In June 2014, the court in The Hague ordered Russia to pay compensation of $39.9 billion and $1.85 billion to Cypriot companies Hulley Enterprises and Yukos Universal Limited, respectively. The court also ordered Russia to pay $8.2 billion to the Veteran Petroleum pension fund of Yukos.

READ MORE: Russian state assets in Belgium ‘to be seized as Yukos compensation’

Earlier, Russian officials had repeatedly called the court's decision politically motivated and officially refused to comply with the court’s decision.

On June 17, it was reported that Russian property was being seized in Belgium. The list of assets included almost all major Russian state banks registered in Belgium, Russian representative offices and the offices of non-governmental organizations and the media.

The Russian Foreign Ministry summoned Belgium’s ambassador to explain the June 18 freeze of assets. It said that Moscow may consider retaliatory measures, including Belgian diplomatic property in Russia, if the assets aren’t unfrozen.

On June 19, Russian Foreign Minister Sergei Lavrov said the accounts of the Russian Embassy and Russian representative offices to the EU and NATO had also been frozen. He added that the actions of the Belgian authorities in seizing Russian state property violated international law, and vowed that Russia's response would be "reciprocal."

Russian state property was seized in France as well. The French subsidiary of VTB has blocked the accounts of Russian diplomatic missions and media outlets.