The UK government has issued a stern warning, threatening legal action against former Chelsea Football Club owner Roman Abramovich. The dispute centres on the £2.5 billion proceeds from the club’s sale, a vast sum that remains frozen and unspent, despite the government’s intention for it to fund humanitarian aid related to the war in Ukraine.
Frozen Funds and Sanctions Context
The £2.5 billion was generated from the sale of Chelsea FC in May 2022. This transaction became necessary after Mr. Abramovich was sanctioned by the UK government following Russia’s full-scale invasion of Ukraine in February 2022. Mr. Abramovich, a Russian billionaire, was alleged to have strong ties to President Vladimir Putin, which he has denied.
The sale itself was permitted under a special government licence, granted on the strict condition that Mr. Abramovich would not personally benefit from the proceeds. The £2.5 billion has since been held in a frozen UK bank account. While UK sanctions prevent Mr. Abramovich from accessing the funds, the money still legally belongs to him, adding complexity to its future use.
The Sticking Point: Who Benefits?
The core reason for the prolonged delay in releasing the funds lies in a fundamental disagreement over the intended beneficiaries. The UK government’s position is clear: the money must be used exclusively for humanitarian causes within Ukraine. This focus is directly linked to their stance on Russia’s “illegal full-scale invasion.”
However, when Mr. Abramovich announced his decision to sell the club, he stated his intention for the proceeds to be donated via a foundation “for the benefit of all victims of the war in Ukraine.” Crucially, reports indicate he suggested this could include individuals in Russia, a point the UK government has explicitly pushed back against. The government insists the funds should only be spent on efforts inside Ukraine.
Government Escalates Pressure
Expressing deep frustration that an agreement has not yet been reached, Chancellor Rachel Reeves and Foreign Secretary David Lammy issued a joint statement. They reaffirmed the government’s determination to ensure the proceeds reach those suffering in Ukraine as quickly as possible.
The statement declared that while the door for negotiations remains open, the government is “fully prepared to pursue this through the courts if required.” This threat of legal action signals a significant escalation, indicating the government’s impatience with the current impasse and their resolve to force a resolution to direct the funds towards Ukrainian humanitarian aid.
Why the Delay?
Getting the £2.5 billion from the frozen account to humanitarian causes involves navigating significant legal and procedural hurdles. The funds, along with any accrued interest, cannot be moved without a specific licence from the Office of Financial Sanctions Implementation (OFSI), the same body that authorised the original sale.
The need for either Mr. Abramovich’s agreement or a legal mandate to redirect funds that legally belong to him, despite being frozen, has contributed to the complex and protracted nature of the negotiations.
External Criticism
The prolonged delay has not gone unnoticed and has drawn sharp criticism. A House of Lords committee last year described the situation as “incomprehensible,” finding it unacceptable that Mr. Abramovich’s promise remained unfulfilled and the assets frozen years after the sale. Their report suggested the impasse “reflects badly on both Mr. Abramovich and the government,” arguing the government should have secured a more binding commitment from the outset. Campaigners have also voiced concerns about the lack of transparency surrounding the funds’ status.
As the standoff continues, the UK government’s threat of legal action underscores their firm intent to break the deadlock and ensure the substantial sum from the Chelsea sale is finally directed towards alleviating suffering specifically within Ukraine.
References
- https://www.bbc.com/news/articles/cvgn45d72eyo
- https://www.bbc.co.uk/news/articles/cvgn45d72eyo
- https://news.sky.com/story/rachel-reeves-threatens-to-sue-roman-abramovich-over-chelsea-fc-sale-proceeds-13378386
- https://www.dailymail.co.uk/sport/football/article-14773581/Government-threatens-SUE-ex-Chelsea-owner-Roman-Abramovich-2-5bn-sale-Blues-fund-remains-frozen-THREE-YEARS-Russian-sold-club.html
- https://m.economictimes.com/news/sports/uk-threatens-to-sue-abramovich-over-use-of-money-from-chelsea-sale/articleshow/121592468.cms
