Last August, we wrote about the most egregious corporate sovereignty award (so far): $50 billion against Russia, under a treaty that it never even ratified, in favor of the major shareholders of the Yukos oil company. Of course, as everyone pointed out, being awarded $50 billion was one thing, collecting it, quite another. Most people probably assumed that it would be practically impossible to squeeze that money out of a recalcitrant Russia, but we now learn that some serious steps towards that goal have recently been taken, as reported by Der Spiegel (original in German). In Belgium, the bank accounts of the Russian embassy were frozen, as were those of Russia’s EU and NATO missions, while in France, something similar happened, with Russian accounts blocked at 40 banks.
Understandably, this did not go down well with the Russian government. The country’s deputy foreign minister warned, “whoever dares to do that must understand that it will lead to reprisals,” something his boss, Sergei Lavrov echoed. Meanwhile, Lavrov’s own boss, Vladimir Putin, was also well aware of the situation, and was quoted as saying: “we will defend our interests using legal means.”
A story on France 24 reports that Russia has already threatened to retaliate against state-linked foreign firms operating in the country, so that’s one way that things could escalate. But more seriously, the relations between Russia and EU nations are extremely strained over the conflict in eastern Ukraine; the last thing the situation needs is additional tension caused by arguments over a massive fine. Even if corporate sovereignty doesn’t actually cause a war — well, let’s hope not — the Yukos award may turn into a hindrance to resolving an existing conflict. That’s yet another reason to get rid of the whole deeply-flawed system before it causes more serious damage.