Stalemate Over £2.5bn Abramovich Funds for Ukraine Persists Amid Increased Pressure

Labour ministers have not convened with Abramovich's representatives, leaving humanitarian funds promised for Ukraine frozen in a UK bank account.

Labour ministers in the UK have yet to initiate discussions with key individuals involved in unlocking £2.5 billion designated for humanitarian support related to the war in Ukraine, following the sale of Chelsea Football Club by Roman Abramovich.

Abramovich sold Chelsea in 2022 after being sanctioned by the UK government due to Russia’s large-scale invasion of Ukraine.

The proceeds from the sale were intended for humanitarian efforts in Ukraine but remain held in a UK bank account, with increasing scrutiny on Labour ministers to engage with Abramovich's representatives or members of the foundation established to oversee the distribution of these funds.

The UK’s Foreign, Commonwealth and Development Office (FCDO) reported that officials are in discussions with Abramovich's representatives.

However, multiple sources indicate that no meetings have occurred between Labour ministers and foundation members since the general election last year.

Sources close to the foundation suggest a deadlock exists that necessitates a political decision to enable negotiations and the signing of an agreement to break the impasse.

A source expressed concern that after three years, the government’s claims of diligent efforts to release the funds have not materialized into tangible actions.

The FCDO has recognized a request for a meeting between the foundation's board and Foreign Secretary David Lammy.

However, representatives of Abramovich have not commented on the situation, though insiders acknowledge a lack of meaningful progress has been made concerning fund release since the initial sale.

This issue has gained urgency following an announcement from Prime Minister Sir Keir Starmer, indicating that a portion of the UK’s overseas aid budget would be redirected toward defense, with £282 million allocated for aid to Ukraine in the fiscal year 2024/25. The £2.5 billion, alongside accrued interest, could potentially mitigate some financial reductions from the aid budget, which reached £15.3 billion in 2023.

Alison Griffin, representing the charity Save the Children, criticized the delay, stating that the funds have remained dormant when they could be used to assist children affected by the ongoing conflict in Ukraine.

The delays are primarily attributed to a disagreement between the UK government and Abramovich's legal team.

A special license allowing Abramovich to sell Chelsea required him to demonstrate that he would not benefit from the sale.

Initially, Abramovich stated that the proceeds would be allocated via a foundation to support all victims of the war in Ukraine but his stance has not changed.

Though Abramovich, a billionaire with ties to the oil and gas industry, remains sanctioned in the UK and cannot access the funds, legally, the money is still considered his.

There are assertions that Abramovich’s lawyers are advocating for the funds to assist all war victims, including those outside Ukraine, while the UK government insists the money should be strictly allocated for humanitarian efforts within Ukraine.

Additional complications arise from Portugal, where Abramovich holds citizenship and has also been sanctioned by the EU. Portuguese authorities granted an exemption allowing the sale proceeds to be used exclusively for humanitarian purposes in Ukraine.

A spokesperson for the European Commission emphasized the importance of adhering to the established conditions for using the proceeds of the sale for humanitarian projects in Ukraine.

Members of the foundation, including Mike Penrose, the former head of Unicef UK, have previously met with former Foreign Secretary David Cameron and Deputy Andrew Mitchell, leaving an impression of potential resolution regarding the use of funds, including addressing humanitarian needs beyond Ukraine.

However, no further meetings have occurred since the Labour party took office.

The foundation is prepared to initiate programs that include support for orphans of Ukrainian soldiers and addressing health, housing, and educational needs for those fleeing the conflict.

A report from a House of Lords committee last year labeled the government's inaction regarding fund release as baffling.

In recent developments, ministers have reportedly considered legal action against Abramovich to unfreeze the funds.

Meanwhile, international responses to the conflict have involved the utilization of interest from frozen Russian assets to support Ukraine, with discussions about the possibility of asset seizures.

An FCDO spokesperson reiterated the government’s commitment to ensuring that the funds from the sale of Chelsea FC reach humanitarian organizations in Ukraine as expeditiously as possible, while emphasizing ongoing dialogues with Abramovich's representatives and international partners.