Russian Legalised Seizure Of Foreign Property

The seizure of property owned by foreign governments on its soil in response to its assets abroad has been legalised by Russia due to a dispute with the ex-shareholders of Yukos oil.

The law, which will come into force in January next year, appeared in Rossiiskaya Gazeta state newspaper, giving it legal validity, after PresidentVladimir Putin signed it Wednesday.

The tit-for-tat move comes as former Yukos shareholders seek to seize Russia‘s assets abroad after Moscow refused to pay them massive compensation ordered by European courts.

The legislation says that Russia can lift the legal immunity on assets belonging to a foreign state on its soil as a reciprocal measure if that country has in some way restricted the legal immunity of Russia‘s assets on its own territory.

The law does not cover the property of embassies or military missions or works of art brought to Russia for exhibitions, which still enjoy legal immunity.

Moscow seized and carved up Yukos following the dramatic arrest of its billionaire owner Mikhail Khodorkovsky in 2003.

Russia has refused to pay shareholders compensation of more than $50 billion ordered last year by an arbitration court in the Hague.

It also has refused to pay out almost 1.9 billion euros ordered last year by theEuropean Court of Human Rights.

Russia’s state media giant VGTRK said this month that its stake in France-based Euronews television had been frozen under a Paris court judgment due to claims from ex-Yukos shareholders.

In June, Russian state assets were frozen in France and Belgium over the dispute — including a short-lived block on embassy bank accounts in Belgium — sparking a diplomatic row with Moscow.

“Immediately after those seizures experts said that on the level of national legislation it was necessary to provide legal opportunities for retaliatory measures. And here they are,” wrote Rossiiskaya Gazeta on Friday.