[Congressional Record Volume 157, Number 60 (Thursday, May 5, 2011)]
[Senate]
[Pages S2721-S2722]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          RUSSIAN RULE OF LAW

  Mr. WICKER. Mr. President, on several occasions I have risen to 
address my colleagues on the topic of Russia and the continuing sad 
state of the rule of law in the Russian Federation. Today, I rise once 
again to address the latest information regarding the absence of a 
rule-of-law framework in Russia's approach to businesses and investors. 
Specifically, this situation negatively impacts the United States and 
the entire international community.
  There have been a number of poor decisions around the world related 
to the Yukos Oil issue that highlight Russia's hostility toward 
investment and business. As my colleagues may be aware, GML, the 
majority shareholder of the former Yukos Oil, previously headed by 
businessman and now political prisoner Mikhail Hoarders, has a $100 
billion arbitration claim against the Russian Federation to obtain 
compensation for the Yukos assets which were summarily taken between 
2003 and 2005.
  Several recent developments demonstrate yet again that international 
courts do not recognize Russia's 2003 expropriation of Yukos Oil 
Company as legitimate and that former stakeholders of the company may 
pursue compensation for their assets that were seized improperly and, 
in essence, nationalized by the Russian State.
  Court victories handed to shareholders involved in the dispute 
indicate that the international legal system

[[Page S2722]]

will not recognize the validity of Russia's bankruptcy of Yukos. In 
December 2009, the New York Times detailed one of these victories in 
which an independent arbitration panel made a jurisdictional ruling 
that shareholders of the former Yukos Oil Company, GML, had the right 
to file and pursue an estimated $100 billion in damages from the 
Russian Government. The tribunal determined that Russia, as a 
signatory, was bound by the Energy Charter Treaty and must adhere to 
its provisions. This claim now moves to the next stage, with a decision 
expected in October 2013--regrettably slow but moving surely.
  The most recent victory occurred in December of last year and 
involved a second international arbitration tribunal in Stockholm, 
which awarded RosInvestCo UK, a minority shareholder of Yukos, $3.5 
million for the damages resulting from the Russian Government's 
actions. This was the first case in which anyone seriously examined the 
claims of an individual Yukos shareholder. The panel independently and 
unanimously concluded that the Russian Federation was liable for 
expropriating RosInvestCo's assets. I stress to you that this was a 
unanimous decision even though the tribunal included a Russian 
arbitrator.
  I bring these developments to the attention of my Senate colleagues 
because I believe they demonstrate a growing movement in the 
international community that holds Russia accountable for its actions 
toward investors, and it is a movement the United States should 
support.
  Minority shareholders, such as RosInvestCo, are just the tip of the 
iceberg when it comes to shareholders who lost billions that were 
rightfully theirs as a result of the seizure of Yukos assets. In the 
United States alone, shareholders were stripped of $6 billion to $12 
billion.
  Russia's actions toward Yukos remind us that investment in Russia is 
extremely risky. The international community is taking note. Americans 
are taking note. American legislators should take note.
  Recent court decisions indicate that the legitimacy of the Russian 
Government's claims over Yukos assets are suspect at best.
  With these thoughts in mind, I urge my colleagues to continue working 
to ensure protection and adequate mechanisms for U.S. shareholders and 
businesses doing business in Russia.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Louisiana is recognized.

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