July 7, 2022

Chelsea owner, Abramovich, and head of Rosneft Sechin are subject to British sanctions

Chelsea owner, Abramovich, and head of Rosneft Sechin are subject to British sanctions

  • The UK has imposed sanctions on seven other oligarchs linked to the Kremlin
  • Chelsea sale has been suspended, Britain may sell the club
  • Suspension of trading on Efras shares

LONDON (Reuters) – Britain has imposed sanctions, asset freezes and travel bans on Chelsea FC owner Roman Abramovich and CEO Igor Sechin, over their links to Russian President Vladimir Putin.

The billionaires, in addition to Oleg Deripaska and four Russian business tycoons, are some of the top businessmen to be added to the British sanctions list since Russia invaded Ukraine. The move follows criticism that Britain is acting too slowly.

The measure puts on ice Abramovich’s plans to sell Premier League club Chelsea, effectively putting the current European champions under government control. The team can continue to play but the government has said it is open to selling the club as long as Abramovich himself does not benefit. Read more

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Prime Minister Boris Johnson said: “There can be no safe haven for those who supported Putin’s vicious attack on Ukraine.” “We will ruthlessly pursue those who help kill civilians, destroy hospitals, and illegally occupy sovereign allies,” he added.

There have been loud calls from British lawmakers for action against Abramovich and other Russian billionaires, with criticism that Johnson’s government is not moving fast enough compared to the European Union and the United States.

London has always been a major destination for Russian money, with wealthy Russians using it as a luxury playground and educating their children in paid schools. He was given the nickname of London.

Sechin, described by Britain as Putin’s right-hand man, was already on US and European Union sanctions lists, and his yacht was seized by French authorities last week. Read more

Since the invasion of Ukraine, which Moscow describes as a “special military operation,” Britain has imposed sanctions on about 20 people linked to Russia. On Wednesday, the European Union announced new sanctions against 14 other rulings, which means that its restrictions apply to 862 people and 53 entities. Read more

15 billion pounds

The others added to the British list are Deripaska, who owns stakes in the En+ group; Dmitry Lebedev, Chairman of the Board of Directors of the Bank of Russia; Alexei Miller, CEO of the energy giant Gazprom; and Nikolai Tokarev, head of the Russian state-owned pipeline company Transneft.

EN+ said the announcement would have no impact on the group or its subsidiaries, and that Deripaska had relinquished majority ownership and control of the group as part of an agreement with US authorities in 2019.

In all, Britain said the seven figures, excluding Abramovich, who had been sanctioned by the United States or the European Union, had a collective net worth of 15 billion pounds ($19.74 billion).

Thursday’s action means Abramovich, 55, is barred from transacting with any British individuals and companies, and cannot enter or remain in Britain. His spokeswoman declined to comment.

Abramovich, who holds dual Israeli and Portuguese citizenships, became one of the most powerful businessmen in Russia by earning massive fortunes after the dissolution of the Soviet Union in 1991. Forbes estimated his net worth at $13.3 billion.

He bought Chelsea in 2003 for £140m, and his investment contributed significantly to the most successful era in the team’s history as they won five Premier League titles, five FA Cups and the Champions League twice.

They beat Brazilian side Palmeiras in February to become FIFA Club World Cup champions for the first time, after defeating English side Manchester City to become European champions last season.

Abramovich announced last week that he would sell Chelsea FC and donate money from the sale to help victims of the war in Ukraine. Johnson’s spokesman said the government was open to selling the club but would require another licence. Read more

“If the club is sold, Abramovich will not benefit,” Sports Minister Nadine Doris told reporters. Read more

The government has issued a special license to allow Chelsea to play matches and pay staff, but it will limit the sale of tickets and merchandise. Read more

Anita Clifford, an attorney who specializes in asset freeze and sanctions issues, said the actions temporarily deprived Abramovich of his assets, but Chelsea could be sold with his agreement with the government. The money can go to help the Ukrainian victims of the war.

“The proceeds will be frozen … also and will not simply flow to the designated person unless there is a license or agreement in place to cover this, or to cover the proceeds going to a specific beneficiary that the parties deemed appropriate,” he told Reuters.

Clifford said Abramovich could apply to the British Foreign Office for an internal review of the assets freeze, or apply to the High Court in London for a review of the decision, a process that could take 18 months or longer.

The entry on the British sanctions list described Abramovich as “a prominent Russian businessman and pro-Kremlin oligarch who had enjoyed a “close relationship for decades” with Putin.

The entry states that this association brought Abramovich a financial or material benefit directly from Putin or from the Russian government.

It said he was “involved in destabilizing Ukraine” and undermining its sovereignty and independence through London-listed Russian steelmaker Evraz. (EVRE.L) of which he is the largest shareholder.

Britain’s Treasury said Evraz was involved in providing financial services, money, goods or technology that could harm Ukraine’s independence, including providing steel that could be used to make Russian tanks.

The company said it did not consider Abramovich a person exercising control over the company, and rejected the statement that it had participated in undermining Ukraine’s independence.

It said the sanctions should not apply to the company, whose London-listed shares plunged 16% after announcing the measures that led Britain’s Financial Supervisory Authority to temporarily suspend trading.

(dollar = 0.7599 pounds)

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(Reporting by Kate Holton, Alistair Smoot, and Paul Sandel) Writing by Michael Holden; Editing by William James, Frank Jack Daniel, Angus McSwan and Mark Heinrich

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