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A powerful House of Lords committee has slammed Russian oligarch Roman Abramovich and the Foreign Office for leaving £2.5 billion from the sale of Chelsea Football Club frozen in the bank for nearly two years because neither can agree where the money should be used to help Ukraine.
A report by the Lords’ European Affairs Committee, chaired by Lord Peter Ricketts – the former chair of the Joint Intelligence Committee under Prime Minister Tony Blair – described the impasse as “incomprehensible” and wants both sides to resolve it as soon as possible.
Peers were told that the row over the proceeds of the Chelsea FC sale, which its former owner Abramovich had to relinquish because of Russian sanctions, has been ongoing for nearly two years.
It centres around whether the cash should be spent in Ukraine itself or help Ukrainian exiles who have left the country. The Foreign Office wants it spent on humanitarian aid inside Ukraine, while the people managing the cash want it spent abroad.
Leo Docherty, Minister for Europe at the Foreign Office, was coy when questioned by peers on the dispute. He said: “It is probably not useful for me to comment.”
But the peers learned that the Charity Commission has approved the creation of a foundation to distribute the cash and that a licence which allows the funds to be frozen has been renewed. A licence to distribute the cash, however, has still to be approved and agreed between the parties.
“We find it incomprehensible that the Government have not yet resolved the problems around the promised use of frozen assets from Chelsea FC’s sale to support Ukraine,” the report states.
“The unfulfilled promise made by Mr Abramovich at the time of the sale of Chelsea FC reflects poorly on him and the Government for not pushing for a more binding commitment.
“We urge the Government to use all available legal levers to solve this impasse rapidly so that Ukraine can receive much needed, promised, and long overdue relief. All of the funds should be spent in territories controlled by the Ukrainian Government.”
The report commends the action by the UK, European allies and the United States in coordinating sanctions against Russia but warns that the country is becoming increasingly adept at circumventing them – by, for example, using third states and shadow uninsured tanker fleets to move oil and goods.
Peers are concerned that human rights organisations state that the UK has been weak in enforcing some sanction against Russia.
“It is disturbing that the weight of evidence we received suggests that the UK has not so far been as effective as it could be at enforcing the sanctions that have been introduced,” the report states. “We note in this regard [human rights organisation] REDRESS’ assessment of the UK’s performance as ‘weak’ and Spotlight on Corruption’s evidence that investigation of sanctions evasion had experienced ‘serious setbacks’.
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“Effective sanctions regimes must be enforced. We therefore ask the Government to address this concern in its response and to set out specific examples of robust action taken by the Government and its agencies to enforce UK sanctions regimes.”
The report makes two recommendations suggesting the UK should move closer to the European Union to implement future sanctions. It suggests that the EU should include the UK in its meetings discussing future sanctions, even though the UK is now a ‘third country’ and not an EU member. It also states that the UK should adopt the EU’s policy of a regular review of sanctions to see how they are working.
Lord Ricketts added: “Ukraine has to continue to receive support for as long as it takes to reverse Russian aggression. The coming months will be critical and any reduction in US support could leave Europe badly exposed. The UK, EU and other European partners must be prepared for a scenario where they may need to take on a greater share of the burden.”