Representatives of Roman Abramovich claim that the UK government has altered the terms of the deal regarding the use of funds from the sale of Chelsea Football Club to aid victims of the conflict in Ukraine. Despite the £2.5bn sale occurring almost 17 months ago, a disagreement regarding the allocation of the funds has prevented the establishment of a proposed charitable foundation, and the proceeds remain frozen in a bank account belonging to Abramovich’s company, Fordstam, in the UK.
Abramovich is currently subject to UK government sanctions, and the sale of Chelsea was only made possible through a license granted by the Office of Financial Sanctions Implementation in May 2022. Although the text of the license is not publicly available due to data protection reasons, sources close to Abramovich state that it authorized the creation of a foundation with the sole purpose of providing humanitarian support to all victims of the conflict in Ukraine and its repercussions.
The language used in the license aligns with Abramovich’s expressed intentions in a statement made on 2 March 2022, in which he stated his willingness to sell Chelsea and utilize the funds for the benefit of all victims of the war in Ukraine. However, the current terms insisted upon by the government differ significantly.
The government wants the funds to be exclusively allocated for humanitarian purposes in Ukraine, which is phrased similarly to a unilateral declaration made by the Department for Culture, Media and Sport after the completion of the sale on 30 May 2022. This phrasing is also consistent with an agreement with the European Union regarding the redistribution of funds. It is important to note that Abramovich, who is a Portuguese citizen, is also under sanctions within the EU.
In response to inquiries from The Guardian, a spokesperson for the Foreign Office stated that they have consistently maintained their position that the proceeds from the sale of Chelsea must be specifically used for humanitarian purposes in Ukraine. The government’s insistence on using the funds solely within Ukraine is based on concerns that a broadening of the remit could result in the money being directed towards Russia or used for purposes that do not directly benefit Ukrainians.
Mike Penrose, the individual chosen by Chelsea to oversee the foundation, has previously stated that the government has been offered a seat on the foundation’s board with a veto power to prevent any spending that might violate sanctions.
The Charity Commission has yet to receive an application for a license to establish the foundation. Fordstam still retains control over the frozen funds, and any attempt by the UK government to seize the money would prove politically contentious.
Lord Foulkes of Cumnock, a Labour peer, has written to the foreign secretary and the chancellor, urging the government to expedite the creation of the foundation. He emphasizes the importance of not letting bureaucratic hurdles hinder the use of the money, especially when Ukrainian allies face significant challenges on a daily basis.
Redress, an organization dedicated to seeking justice and reparations for victims of torture, has called on the government to issue new licenses that would permit some of the Chelsea funds to be distributed to established funds while the foundation is being established. They suggest consulting survivor groups and civil society in Ukraine and utilizing existing international mechanisms such as the Trust Fund for Victims, the Register of Damage created by the Council of Europe, and the Global Survivors Fund to ensure fair and effective distribution of the funds.
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