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Russia reserves right to demand payment of $3 bln debt from Kiev — Kremlin

July 27, 2016, 16:23 UTC+3

The Russian side will react in accordance with international legislation

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©  Alexandr Demyanchuk/TASS

MOSCOW, July 27. /TASS/. Russia reserves the right to protect its interests using norms of the international law and to demand payment of a $3 bln debt from Ukraine, the Russian President’s spokesman Dmitry Peskov told reporters.

"I cannot tell you right now what steps will be taken and when. The Russian side reserves the right to react in accordance with international legislation in order to protect its own, in this case sovereign commercial interests," he said.

Peskov stressed that the government has not made any decision yet.

"Russia is consistent in voicing its position. We consider it to be a sovereign debt, the government’s debt with relevant consequences for the financial obligations of Ukraine," he said.

On July 26, Ukraine’s Finance Minister Alexander Danilyuk said that Kiev does not find it necessary to return the $3 bln debt to Russia.

In December 2013, Russian President Vladimir Putin and the then Ukrainian President Viktor Yanukovich reached an agreement that Moscow would extend a 15 billion U.S. dollar loan to Kiev through placing Ukrainian securities. Under the deal, three-billion-U.S. dollar worth of bonds were listed on the Irish Stock Exchange on December 20, 2013 and bought by Russia from its National Welfare Fund.

Later on, Ukraine tried to challenge the loan’s status and reduce it to that of commercial credits subject to restructuring. Russia objected to this approach. However its suggestion that this loan be restructured under reliable Western guarantees was ignored.

In November 2015, Putin said Russia was ready to restructure Ukraine’s debt in case the United States, the European Union or any big international financial institute gave its guarantees to Russia. No guarantees were issued.

Meanwhile, the International Monetary Fund on December 8, 2015 lifted the ban on crediting countries with overdue sovereign debts. Russia voted against this decision, saying it is politicized. As a matter of fact, this step meant that the IMF could continue the implementation of its anti-crisis program for Ukraine even in the event Kiev falls into arrears with repayment of its debts to Russia.

However, on December 17, the International Monetary Fund confirmed the official status of Ukraine’s debt to Russia.

On December 18, 2015, Ukraine’s government imposed a moratorium on repayment of its debt to Russia. The then Prime Minister Arseniy Yatsenyuk said the step stemmed from Russia’s refusal to sign the restructuring agreement along with private creditors.

After the deadline for repayment of the Ukrainian debt expired on December 20, 2015, Russia’s finance ministry went to law to enforce repayment of this sum.

On February 17, 2016, Russia filed a lawsuit against Ukraine with the High Court in London demanding repayment of the debt.

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