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Russian oligarchs tempted to use a Belgian treaty to claim Ukrainian billions

20 Sep, 2023
Russian oligarchs tempted to use a Belgian treaty to claim Ukrainian billions

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Four Russian oligarchs, who lost their assets in Ukraine due to the nationalization of Sberbank, plan to contest this decision based on the Ukrainian-Belgian-Luxembourg Investment Protection Agreement.

This was reported by the Belgian publication L'Echo.

It is noted that the four oligarchs, closely connected to Putin, intend to appeal to international arbitration. They will invoke the Ukrainian-Belgian-Luxembourg Investment Protection Agreement to demand over a billion dollars from Ukraine.

The basis for the lawsuit will be the fact that the bank belongs to the Luxembourg holding company ABH Holdings (ABHH), the majority shareholders of which are Mikhail Fridman, German Khan, Alexey Kuzmeyev, and Petr Aven.

The four Russian oligarchs are under EU sanctions, but they believe that the nationalization of Sberbank deprived them of assets, namely investments estimated by ABHH at over a billion dollars.

Although the composition of the company's shareholders has undergone some changes, at the start of the full-scale war, the four Russians mentioned were the majority owners.

When the first rumors of the bank's nationalization appeared, ABHH immediately announced that it would use the agreement between the economic union of Belgium and Luxembourg (BeLux) and Ukraine on the encouragement and protection of investments to recover its lost assets.

Allegedly, Article 4 of this agreement justifies their claims.

'Each of the Parties to the Agreement undertakes not to take any measures regarding expropriation or nationalization,' writes media.

Furthermore, it states that the parties to the agreement whose investments may suffer due to the war have the right to at least the same treatment as investors benefiting from the most-favored-nation treatment "concerning restitution, compensation, indemnification, or claims for damages."

It is on this legal basis that ABHH intends to initiate a case in an international arbitration court.

Attention to this situation has been drawn by the Belgian French-speaking Green Party, Ecolo.

The Greens, including two members of parliament from the Ecolo party, Samuel Cogolati and Wouter De Vriendt, have decided to raise an outcry about the intentions of the Russians.

"Oligarchs who had their banks in Ukraine, rightfully expropriated, want to use the Belgian-Ukrainian treaty to make as much money as possible at the expense of Ukrainian taxpayers who have already unfairly suffered from Russia's unlawful aggressive war initiated in 2022," says Samuel Cogolati.

Furthermore, politicians plan to hear explanations from the ministers of foreign affairs and finance, Hadja Lahbib and Vincent Van Peteghem, to determine whether Belgium can prevent these oligarchs from demanding this excessive amount from Ukraine.

The Greens want the Belgian government to take urgent measures to protect Ukraine from this potential legal case.

Cogolati added that "there can be no question of allowing Russian oligarchs to blatantly misuse a legal instrument initiated by Belgium to dispose of the Ukrainian people with impunity."

As the publication notes, it remains to be seen whether the Belgian state can realistically do anything about this.

Signed in 1996, this agreement came into force on July 27, 2001, for a term of 10 years, which can be extended if neither party objects within 6 months after the expiration of its term.

As explained by Professor Hakim Boularbah of the University of Liège to L'Echo, even if Belgium decides to terminate the agreement, it has a "termination clause." If the agreement is terminated, investments made before the expiration date of the agreement will continue to fall under its provisions for an additional ten years.

The Odessa Journal

The Odessa Journal

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