The government has admitted that a “disagreement” with Roman Abramovich is stopping funds generated from the sale of Chelsea from being used to help victims of the war in Ukraine.
More than 18 months after Abramovich sold Chelsea to American investors, £2.5bn in proceeds from the deal remain frozen in a UK bank account. On Tuesday the minister for Europe, Leo Docherty, said the process of releasing the money remained stuck, with the two sides at odds over where and how it should be spent.
Addressing the European affairs committee in the House of Lords, Docherty said that no application had yet been lodged for a licence which would allow the frozen money to be spent.
“A licence which enabled the funds to be frozen has been renewed and continues in place,” Docherty said. “A second licence would have to be agreed and there’s a disagreement between those involved in running the fund and the government. We wouldn’t want to speculate what the other side is thinking. It’s up to them to apply for a licence under terms of [the government’s] unilateral declaration.”
The unilateral declaration was a public statement made by the government on 30 May last year, a week after it had granted the first licence to enable the Chelsea sale. The declaration spelled out the terms under which a charitable foundation might be able to spend what has been described as the biggest humanitarian fund in history. According to the declaration, “the Treasury will only issue a licence which ensures that such proceeds are used for exclusively humanitarian purposes in Ukraine”.
Docherty acknowledged to Baroness Anelay of the committee that Abramovich and those employed by him to run the foundation interpreted the remit of the fund differently. “The key difference I think between the government and those who have established [the foundation] is whether the funds get used inside Ukraine or for Ukrainians outside of Ukraine. That remains something that we need to resolve.”
The question of why the disagreement has yet to be resolved remains unanswered. Experts in sanctions law argue that if Abramovich has failed to comply with the terms of the first licence, he could face criminal prosecution or severe financial penalties. Representatives of Abramovich have suggested to the Guardian that the terms of the first licence were not consistent with the language of the unilateral declaration and did allow for funds to be used outside Ukraine.
The government has yet to suggest publicly that it is considering taking action against Abramovich to facilitate the creation of the foundation and Docherty did not lay out potential next steps to the committee. The minister did however restate the government’s desire to see the issue resolved. “We do want this done as quickly as possible,” he said. “We are pushing.”
