Finland orders confiscation of $4.25 billion in Russian assets in Naftogaz case

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By Anne Kauranen

HELSINKI (Reuters) -A Finnish court has ordered $4.25 billion in assets owned by Russia in Finland to be confiscated at the request of Ukrainian state firm Naftogaz, a court document showed, and the Finnish Enforcement Authority said it is executing the order.

Naftogaz has been pursuing legal action against Russia since 2016 to seek compensation for Moscow’s expropriation of Naftogaz property when Russia annexed Crimea in 2014.

The Kremlin had said on Tuesday it would contest the confiscation in court and defend its property interests, and on Wednesday summoned the Finnish ambassador to protest, demanding that Finland reviews the situation.

Russia’s Foreign Ministry said in a statement it had demanded Finland revises the decision.

“It was underlined to the (Finnish) ambassador that otherwise Helsinki would be responsible for the consequences of the Finnish authorities’ actions. If necessary, the Russian side will take retaliatory measures,” Moscow said.

A tribunal in The Hague in April 2023 ordered Russia to pay Naftogaz $4.22 billion plus interest and legal costs to compensate for assets it seized in Crimea, but Moscow has not done so.

The District Court of Helsinki on Aug. 13 ordered Russian Federation assets in Finland worth up to $4.25 billion to be confiscated to secure Naftogaz Group’s receivables, a court decision seen by Reuters showed.

Finland’s National Enforcement Authority said it had executed the court order by confiscating and freezing Russian assets, without immediately providing detail on the assets.

“The value of the assets subject to the measures is significant,” chief district bailiff Aki Virtanen told Reuters by email.

On Sunday, Naftogaz said the assets frozen by Finland included “real estate and other assets valued in the tens of millions of dollars”.

“It is also the first publicly known successful asset freeze outside Ukraine in the enforcement of arbitration awards filed by Ukrainian companies against Russia for the expropriation of property in Crimea in 2014,” the group wrote in a release.

The Russian embassy in Finland said it had sent a note to Finland’s foreign ministry expressing “a strong protest” against the measures and calling for reconsideration.

“On October 29, we received a list from the Finnish Enforcement Authority of over 40 properties that had been seized,” the embassy wrote in a statement.

It said half of the confiscated properties were diplomatic properties, including residences of diplomats.

“Since they are used for official and representational purposes of the embassy, they are protected under the Vienna Convention on Diplomatic Relations and Finnish legislation,” it said.

(Reporting by Anne Kauranen in Helsinki and Moscow Newsroom, additional reporting by Essi Lehto in Helsinki; editing by Jason Neely and Barbara Lewis)