[Congressional Record (Bound Edition), Volume 160 (2014), Part 11]
[Extensions of Remarks]
[Page 15435]
[From the U.S. Government Publishing Office, www.gpo.gov]




   PROTECTING AMERICAN SHAREHOLDER RIGHTS FROM RUSSIAN EXPROPRIATION

                                 ______
                                 

                          HON. ELIOT L. ENGEL

                              of new york

                    in the house of representatives

                      Thursday, September 18, 2014

  Mr. ENGEL. Mr. Speaker, as we and our allies deal with the numerous 
problems caused by Russian Federation President Vladimir Putin, we 
should not lose sight of the 10-year legal battle against Putin's 
illegal expropriation of Yukos Oil Company. After Yukos was privatized 
and stock was sold to investors in the United States and Europe, Putin 
manufactured a spurious tax claim against Yukos and manipulated the 
Russian legal system to seize the company's assets, most of which were 
turned over to Rosneft, a Putin-allied oil company.
  For 10 years, representatives of the 55,000 Yukos shareholders have 
pursued judgments against the Russian Federation and compensation for 
their financial losses. In July, 2014, this massive legal effort 
culminated in two judgments in European courts in favor of the 
claimants and against the Russian government.
  In the first case, the Permanent Court of Arbitration in The Hague 
ruled that the Russian government must pay $51.6 billion to the largest 
Yukos shareholder, GML, Ltd, for what the court found was Russia's 
illegal confiscation of Yukos.
  In the second case, the European Court of Human Rights ruled that the 
Russian government must pay $2.5 billion in partial compensation to the 
Yukos shareholders who were registered owners of the company at the 
time of the illegal tax proceedings used to forcibly bankrupt Yukos.
  In both cases, the Russian government has an opportunity to appeal 
the rulings. Moreover, Russia could simply refuse to comply with the 
compensation orders. However, the two court rulings, if upheld, hold 
the possibility that the Russian government will be compelled to make 
some compensation, through seizure of Russian assets that come within 
the jurisdiction of the European authorities.
  Under Vladimir Putin, the Russian government unfortunately has taken 
major steps backwards and now must be considered a rogue regime. 
Perhaps the court actions in Europe in the Yukos case will contribute 
to the international effort to turn Russia back to a path of 
international cooperation and constructive behavior.

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