The British government said on Wednesday it was giving Russian oligarch Roman Abramovich a “last chance” to donate 2.5 billion pounds (about $3.4 billion or €2.85 billion) from the 2022 sale of Chelsea Football Club to Ukraine or face legal action.
The funds have since been frozen after Abramovich hastily sold the club following Russia’s full-scale invasion of Ukraine.
Two successive British governments and Abramovich have been locked in dispute for years over how football funds are used.
Britain is calling for them to be donated to humanitarian causes inside Ukraine, while Abramovich argues it should be given to “all victims” of the war, including Russia.
Government threatened legal action
The government pointed to Abramovich’s previous commitments to donate the proceeds to charitable causes, amid intense scrutiny of the sale shortly after Russia’s invasion.
Chancellor of the Exchequer (the equivalent of a finance minister) Rachel Reeves said on Wednesday, “It is unacceptable that more than £2.5 billion of money owed to the Ukrainian people can be allowed to sit in a UK bank account. It is time for Roman Abramovich to pay.”
Both he and Prime Minister Keir Starmer threatened legal action if non-compliance occurred.
“This government stands ready to enforce this through the courts so that every penny reaches the people whose lives have been ruined by Putin’s illegal war,” Starmer said.
It is easier to freeze assets than to seize them
However, the government in its statement made no mention of what legal basis it would use for the lawsuit to seize the funds, amid doubts about the feasibility of doing so.
As Europe and the US are struggling more generally since Russia’s full-scale invasion of Ukraine, the reality is that it is relatively easy for governments to legally seize assets, but much more difficult to appropriate them.
EU member states are currently trying to unlock frozen Russian assets to give to Ukraine, so far they have donated only the interest earned on this money, not the money itself.
EU leaders are expected to review proposals aimed at using these frozen Russian assets to support Ukraine’s budgetary and defense needs at their monthly Brussels summit starting Thursday.
License issued to release funds, ‘any proposal’ will be considered
Prime Minister Keir Starmer said Britain would issue a license to issue the money. This would allow the money to be transferred to a new charitable foundation.
“We will consider any proposal by Mr Abramovich to use this clear legal route to set up a foundation and transfer funds under the terms of the licence,” Reeves said in a separate statement issued to parliament.
Meanwhile, Foreign Secretary Yvette Cooper said the British government was trying to agree a way forward with Abramovich and his company Fordstam Ltd. after the 2022 sale.
She also appeared to hint at a compromise offer on Abramovich’s previous call for some funds to be given to people inside Russia affected by the war.
“Under the terms of the license, the proceeds must go to humanitarian causes in the country,” Cooper said. “Any future profits earned by the Foundation may be spent more widely on victims of conflict around the world. In no case may the funds benefit Abramovich or other sanctioned individuals.”
Abramovich changed Chelsea
Abramovich bought Chelsea for just £140 million in 2003, when the Premier League was dominated by Manchester United and Arsenal.
The Russian oligarch, who also holds Portuguese and Israeli citizenship, is credited with turning around the club’s fortunes. He regularly helped control blockbuster transfers as the club spent more than $1 billion on playing personnel.
His 19-year reign saw him rewarded with a staggering 19 major trophies, including five Premier League titles, five FA Cups and two Champions League wins, and he eventually sold the club for £4.25 billion.
He did not immediately respond to the British government’s comments on Wednesday.
Edited by: Dmytro Lyubenko