Why Abramovich's Money from Selling Chelsea Has Not Reached Ukraine

The British government announced the freezing of assets belonging to Russian oligarch Roman Abramovich, including the football club Chelsea, following Russia's full-scale invasion.

Understanding the implications of restrictive measures for Chelsea, the British government, as an exception, allowed the club to continue operating and sanctioned its sale under the condition that Abramovich would not benefit from it.

In May 2022, American billionaire Todd Boehly and a consortium of investors officially completed the purchase of FC Chelsea for $5.25 billion. The club confirmed that $3.1 billion would be deposited into a British bank account and blocked until the details of transferring these funds to the victims of Russian aggression are clarified.

As to why the funds obtained from selling FC Chelsea have not yet reached Ukraine, read in the article by experts Sofia Kosarevych and Yaroslav Sydorovych, Chelsea dragging time: why Roman Abramovich delays transferring the funds from selling the club to Ukraine.

A year after settling the previous disputes, a new and rather unusual problem has emerged.

In July, the British government informed the Fund that it can receive funds only on the condition of agreeing to restrictions on spending within Ukraine's geographical borders. This condition is stipulated in an agreement with the European Union on how funds can be distributed, as the government assures.

Thus, any request received by the fund from Ukrainians abroad, and there are more than 8 million of them, cannot be considered.

Not only the Fund, which will be responsible for distributing the funds, but also a number of non-governmental organisations, are against this idea.

They are convinced that, for example, African countries suffering from food shortages related to the war in Ukraine also deserve compensation from the Chelsea money.

The issue regarding Africa as a whole is debatable, as many countries on the continent have not condemned, and some have even supported Russia's unprovoked aggression.

In comparison to the necessary $400 billion for Ukraine's reconstruction, $3.1 billion from the club's sale might not seem so significant. It is crucial for those who are directly suffering from almost daily bombardments. Aid is most urgently needed by those who have suffered the most based on a rational standpoint.

However, even if the Chelsea Fund agrees to the government's terms regarding restricting spending within Ukraine's geographical borders, there is another factor.

The funds from selling the club, which were supposed to be used to compensate for the war consequences, are currently on a frozen account of Fordstam Limited. This company is owned by Roman Abramovich and is the former parent company of FC Chelsea.

However, due to the lack of necessary documentation, there is a very real risk that Fordstam will be excluded from the British company registry and its legal status terminated.

In such a case, the funds in the company's account would be considered abandoned property and would become the property of the Crown.

To find an effective and fair solution to the situation with the Chelsea funds, the parties must prioritise compensation for the victims of Russian military aggression.

To achieve this goal, a well-constructed model for using these  funds is needed, rather than a power struggle between the government and the oligarchs. In the case of Abramovich's funds, this could be achieved with legal regulations for using Russian money to compensate the victims of the Russian war consequences.

If unproductive discussions and disputes continue, the best solution would be to direct the blocked funds to the Compensation Fund, which should be filled with Russian assets within the International Damage Registry mechanism.

Moreover, 45 countries, including the United Kingdom, have joined the adopted expanded partial agreement on the creation of the Registry.