Russia Update: State Media Assets Frozen After Kremlin Refuses to Pay $50b Damages in Yukos Case

June 18, 2015
Margarita Simonyan, editor-in-chief of Russia Today.

Russian state media assets have been frozen abroad due to the Kremlin’s announcement that it refused to pay the $50 billion judgement in the YUKOS case.

Welcome to our column, Russia Update, where we will be closely following day-to-day developments in Russia, including the Russian government’s foreign and domestic policies.

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Russia This Week:

Is ‘Novorossiya’ Really Dead?
From Medal of Valor to Ubiquitous Propaganda Symbol: the History of the St. George Ribbon
What Happened to the Slow-Moving Coup?
Can We Be Satisfied with the Theory That Kadyrov Killed Nemtsov?
All the Strange Things Going On in Moscow

Special features:

‘There Was No Buk in Our Field’
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Alexey Navalny On the Murder of Boris Nemtsov
Theories about Possible Perpetrators of the Murder of Boris Nemtsov

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EU Countries Cast Wide Net to Freeze Russian State Assets Abroad in YUKOS Case

Earlier we reported that France and Belgium have frozen Russian media assets due to failure of the Russian government to pay damages after an arbitration court ruling.

Austria is now seizing assets as well.

As we reported, Margarita Simonyan, editor-in-chief of Rossiya Segodnya, which
publishes (Russia Today), said that an article published by contained erroneous information that buildings were seized in
France, and that the text would be changed. Simonyan had told
that Rossiya Segodnya‘s account was frozen, but said they only rented a
small space for offices.

Translation: Is it really so hard for Forbes to acknowledge its f**k-up? RT doesn’t have any property there. This does not concern us in any way, no one has come to us nor written anything.

But has not changed its story, although it currently contains some quotes from Simonyan which apparently were added. Tim Osborne, head of Group Menatep Ltd. confirmed the asset seizures to (translation by The Interpreter):

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.

about the freezing of RT’s property does not correspond to reality,
says Margarita Simonyan, editor-in-chief of RT and the internaitonal
news agency Rossiya Segodnya. In a press statement from RT she emphasized
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,” the television channel emphasized.

Simonyan told
that Russia media had taken precautions earlier to prevent just
such blocking of their broadcasting abroad, although she declined to
reveal the details.

She confirmed to what also reported, that it was RT’s bank account in France that was frozen, not any property.

Kostin, head of 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.

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

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
ordering the Russian Federation to pay a total of €1.6 billion (over $1.8 billion) of damages to Yukos Universal Limited.

Yukos Universal Limited was one of three claimants awarded damages by the Permanent Court of Arbitration today. In total, the Russian Federation has been ordered to pay around $50 billion dollars in damages, the largest sum going to Hulley Enterprises Limited.

Since the Russian government had not responded to the judgement in more than a year, authorities were freezing Russian assets, the notice said.

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.

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.

— Catherine A. Fitzpatrick

Putin’s Confrontation with West ‘Artificial,’ Says Khodorkovsky; Supports Freeze of Russian Assets in YUKOS Case

Former political prisoner and businessman Mikhail Khodorkovsky  gave a speech at the Atlantic Council in which he cautioned the West to prepare for life after Putin, Reuters reported.

Russian President
Vladimir Putin’s confrontation with the West is “artificial” and aimed
at protecting Russia’s ruling elite and distracting attention from a
corrupt system, a former Russian oil tycoon said on Wednesday.

“The current confrontation with the West is absolutely artificial,” Mikhail Khodorkovsky told the Atlantic Council think tank.

“The cooling of relations has been inspired by those Russian elites who want to hold on to power.”

through a translator, Khodorkovsky, once Russia’s richest man, said,
“They desperately need an image of an enemy who would distract the
attention of the populace from the corruption and inefficiency that
exists in the power.”

Khodorkovsky, founder of Open Russia, a civic movement seeking democratic change in Russia, denied that he had plans to run for president:

“In Russia
such a system has been built under which any decision can be suddenly
changed at the whim of one person, who is not controlled by any internal
political mechanisms,” he said.

Asked whether he would run for president of Russia, Khodorkovsky replied, “I don’t want to waste questions that have no practical value right now.”

But, he said, “sooner or later” a power change would occur in Russia and the West should be prepared to help Russia quickly reintegrate into the global system.

In his speech at the Atlantic Council where he was introduced by Atlantic Council President and CEO Frederick Kempe, Khodorkovsky commented:

“Sooner or later, the system will collapse, and we need to prepare
for this now,” he urged. “The West must establish close relations with
the European-oriented part of Russia, and rapid reintegration into the
global system after the regime changes. We’re not going to have a big
window of opportunity.”

Novaya Gazeta reported today that Khodorkovsky supported the freezing of Russian state assets abroad over damages in the YUKOS case.

Translation: 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.

(Note: The Interpreter is a project of the Institute for Modern Russia, which is funded by Pavel Khodorkovsky, son of Mikhail Khodorkovsky.)

— Catherine A. Fitzpatrick

Russian State Media Assets Abroad Frozen After Kremlin Refuses to Pay $50 Billion Damages in Yukos Case

Russian media assets abroad have been frozen in connection to the Yukos case, reported, citing TASS.

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. learned that court notices about the freeze were received at TASS editorial bureaus in Belgium and France.

Margarita Simonyan, editor-in-chief of Rossiya Segodna, which publishes, told the situation with her company was similar.

“The arrest was place on our account in France. 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 disputed the account of the freeze given by Russian Forbes, however, which initially claimed that properties were frozen.

Translation: Forbes has gone out of its mind. Russia Today does not and never had any building in Paris and there has never been nor does there exist now a television station in France.

Translation: Forces is citing some “sources close to YUKOS.” I have not seen such unprofessional work in a long time. It’s simply a disgrace.
Translation: a 100 people have called me to comment on the arrest of RT’s property, made up by Forbes, which RT never had!
Translation: we don’t have a television channel in France, no building in France. There is only the journal Forbes, publishing lies. Should we sue them in court or what?

Translation: Sash, in Paris we rent two rooms of 15 square meters. In an enormous building belonging to some French people. And no, they aren’t frozen )

Simonyan said later she spoke to a Forbes editor and the text was changed.

Her tirade about what appears to be a Forbes error distracts from the fact that quoted her directly that the account of Rossiya Segodnya was frozen, even if there were no actual owned properties; there is an RT operation in France, after all.

The freezes were implemented after Aleksei Ulyukayev, Russian
minister for economic development, announced that Russia will not pay
the damages levied in the Yukos case.

An international arbitration court ruled last year
that the Russian government must pay $50 billion in compensation for
having confiscated the assets of Yukos, the company founded by former
political prisoner and businessman Mikhail Khodorkovsky.

Khodorkovsky, a major critic of Putin, was arrested in 2003 and
convicted of theft and tax evasion in 2005, ultimately serving 10 years
in jail. 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 EU and US sanctions for its role in the
Ukrainian war, and Sechin has been additionally sanctioned by the US.

Khodorkovsky was pardoned by President Vladimir Putin in December
2013 but forced to live abroad when the Kremlin could not guarantee him
free travel.

(Note: The Interpreter is a project of the Institute for Modern Russia, which is funded by Pavel Khodorkovsky, son of Mikhail Khodorkovsky.)

— Catherine A. Fitzpatrick