There is a possibility that the $3 billion generated from the sale of Chelsea FC over a year ago will not reach the victims of Russia’s war against Ukraine this year due to the continued insistence of the UK government that the money only be used in Ukraine.
The frozen account holding the money, pledged by Russian billionaire Roman Abramovich for “all victims” of the Ukraine war, has remained untouched since the sale of Chelsea last May. This is primarily due to a British government decision to give the European Union jurisdiction over how the funds will be used.
This is despite the fact that the club’s sale occurred solely within the jurisdiction of the UK and that the original agreement with the government was to allow the funds to be used to assist all victims of the war, including refugees throughout the world. The European bloc has imposed a condition that the money must be used exclusively within Ukraine’s borders. According to a report by The Telegraph, this stance has sparked anger among numerous prominent humanitarian organizations.
Abramovich, a Russian-born Israeli and Jewish billionaire, is well-known as the former owner of Chelsea Football Club in London and the primary owner of the private investment company Millhouse LLC. With Russian, Israeli, and Portuguese citizenship, he previously served as the Governor of the Chukotka region from 2000 to 2008. Abramovich’s fortune, estimated at $14.5 billion in 2021, has experienced fluctuations, reaching $6.9 billion in 2022 and bouncing back to $9.2 billion in 2023.
Leading the establishment of the so-far nameless independent foundation responsible for administering the funds is Mike Penrose, a former chief executive of UNICEF UK. He has been prepared to commence his duties since the conclusion of last year.
In a conversation with The Jerusalem Post on Monday, Penrose said that “it is a real shame we’re not there yet.” The former CEO of Action Contre Le Faim in Paris and global humanitarian director at Save the Children said that “unfortunately, political considerations are overriding what should be a humanitarian issue.”
In March 2022, Abramovich issued an official statement announcing the sale of the club, citing the ongoing situation in Ukraine as the reason. Following this, the UK government froze his assets in the country, due to his “close ties with the Kremlin.”
Abramovich, six other Russian businessmen were sanctioned by UK
In response to the Russian invasion of Ukraine in 2022, Abramovich, along with six other Russian businessmen, was sanctioned by the UK. His UK assets were frozen, and a travel ban was imposed on him. The British government justified the sanctions by claiming that the oligarch had alleged ties to the Kremlin. Abramovich, on the other hand, denied having close connections to Putin and the Kremlin. Subsequently, Australia and the European Union also imposed sanctions on him, mirroring Britain’s actions.
Penrose was chosen for this role as the sort of “neutral arbiter, the person in the middle, with the credibility and the network to set this up as an independent, impartial and neutral humanitarian charity,” a source close to the foundation that is expected to be established told the Post.
“The idea very much at the very beginning was that this will be set up for the victims of the Ukraine war and its consequences,” the source said, adding that Penrose “has been negotiating for over a year with the British government to get a sanctions license,” which will allow them to give the money to the foundation he has set up.
Penrose has chosen Jan Egeland, a Norwegian diplomat and humanitarian leader who was an adviser to former United Nations secretary-general Kofi Annan. As for the rest of the board, both the source and Penrose wouldn’t specify who they have asked to join. Penrose would only say that they are “former heads of state or top people in investment, strategists at the very top level, with all of them neutral and impartial.” He emphasized that “they have nothing to do with Chelsea, nor the Ukrainian government: They’re independent.” The nameless foundation doesn’t legally exist yet, but the working name is “The Foundation for the Victims of the Conflict.”
The source close to this foundation said that “the British government is trying to apply a lot of political conditions,” meaning that these funds can only be invested in Ukraine. This has been a decision that came as pressure from the European Commission, according to reports, since Abramovich is also a Portuguese citizen. The foundation and its members have been very consistent in their decision not to agree to investments only in Ukraine.
In a Daily Mail article published on Saturday, it was suggested that the main obstacle in closing the deal of investing the funds was what it claimed to be Abramovich’s desire for “a substantial chunk of the money to go to Russia, or rather Russians affected by the conflict.” It said that both the British government and the European Commission refuse to approve this request due to ongoing sanctions against Russia in response to Putin’s aggression towards Ukraine.
Penrose dismissed the report, saying that “we can’t legally transfer funds to Russia” because of the Russia and Belarus Sanctions Act, “which means you’re not allowed to transfer money into Russia or into Belarus or into any entity associated with them.” In addition, Abramovich does not have any control over the designation of the funds.
According to the source, the reason it is important to be able to use the funds outside the borders of Ukraine is because “saying that they can only spend the money in a specific country is problematic. These humanitarian principles are fundamental and would impact on all humanitarian work around the world.”
According to this source, all of the relevant documents are registered and the foundation can be launched immediately.
Later this week, London will host the Ukraine Recovery Conference (URC) 2023, the second annual conference, following URC 2022, which Ukraine and Switzerland jointly hosted in Lugano. That conference laid the foundation for Ukraine’s reconstruction process and united the world in supporting this effort. Sources close to the foundation said they hope the British government will ignore their European partners and allow these funds to be distributed through the foundation to those who have been hurt by the war in Ukraine.