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Russian experts condemn as blackmail Ukraine’s threats to seize Russian property abroad

June 03, 2015, 16:55 UTC+3 Alexandrova Lyudmila
© ITAR-TASS/Maxim Nikitin

MOSCOW, June 3. /TASS/. Ukraine’s statements that it is determined to seek compensation in courts for former Ukrainian property in Crimea under the threat of Russia’s property seizure abroad are blackmail designed to get economic concessions, Russian experts said on Wednesday.

While some experts admit that Ukraine may win some lawsuits, this is unlikely to happen soon and it is hardly probable that any significant Russian properties will be seized.

Ukraine intends to seek the seizure of Russian overseas property as "fair satisfaction" for the damage done from Crimea’s reunification with Russia, Ukrainian First Deputy Justice Minister Natalia Sevostyanova said.

According to her, Russian overseas properties will be seized, if the European Court of Human Rights (ECHR) supports Kiev’s complaints against Moscow.

Kiev has filed two lawsuits with the ECHR against Moscow by now, she said. "So far, this is the list of 4,000 enterprises with all the assets we have lost in Crimea. As of now, we have held a preliminary loss estimate, which reaches over a trillion hryvnia ($48 billion)," the deputy justice minister said.

Even if the ECHR sides with Ukraine, the mechanism for the enforcement of its decisions does not envisage the seizure of the debtor’s property, Russian business daily Vedomosti quoted Alexey Panich, partner in the Herbert Smith Freehills law firm, as saying.

This problem has been encountered by former Yukos shareholders as they have failed so far to get the ECHR-awarded $1.8 billion compensation from Russia and secure the seizure of Russian property.

The examination of lawsuits by the ECHR is a process that may take years, the Free Press web portal quoted Dmitry Matveyev, head of the Center for Legal Regulation of Interstate Relations at the Russian Presidential Academy of National Economy and Public Administration (RANEPA), as saying.

"Normally, it takes years for the court to pass judgments on such complaints. After the ECHR passes a ruling, local courts in each specific country will individually determine what is or what is not subject to seizure," the expert said.

‘It is far from being guaranteed that they would make decisions in favor of Kiev. Honestly speaking, I have doubts that Ukraine will be able to seize some property even pursuant to the ECHR’s decision positive for Kiev," he added.

It is not ruled out that along with the lawsuits filed with the ECHR, which will examine the violation of ownership rights, Ukraine may apply to other courts, in particular, international arbitration tribunals, First Vice-President of the Center for Political Technologies Alexey Makarkin told TASS.

"Theoretically, lawsuits, if they are prepared well, have the chance to win the case but this will not happen soon," the expert said.

If a ruling is passed against Russia, Moscow won’t recognize it and won’t pay anything. That is why, it is not ruled out that attempts will be made to seize Russian property. "But Yukos shareholders may start these actions even earlier and so what will be left for Ukraine in 5-6 years?" the expert said.

"And, generally speaking, what property can be seized?" he added.

Under the Vienna Convention on Diplomatic Relations, diplomatic missions and their property may not be seized. There are also companies with state stakes operating in the West, Gazprom, for example. But these companies have a lot of private shareholders. So, if corporate assets are seized, damage will be done to these shareholders, including from the West. As for works of art and other exhibits displayed at exhibitions, lawyers meticulously specify their status in agreements, the expert said.

"So, it is hardly possible to talk about any large assets because economic benefits will be small and this may not happen soon," Makarkin said.

In the expert’s opinion, both politics and economics can be seen behind Kiev’s demarche.

"Ukrainians owe Russia $3 billion and they want this debt to be restructured or even written off. Ukraine is exerting public pressure on creditors - recently it adopted a law on debt repayment moratorium," the expert said.

"Ukrainians are hardly thinking today about starting the hunt for Russian training ships in about five years. But they face the issue of debt repayment and new gas talks are coming. So, this statement is blackmail and an element of pressure on Russia ahead of the negotiations on economic matters," the expert said.

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