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    Legal battle over nearly two billion hryvnia seized from company linked to Russian bookmaker

    Nearly Two Billion Hryvnia in Legal Dispute Over Sanctions Against Russian Bookmaker Affiliate

    Kyiv, February 6, 2024: In a significant legal showdown that has captured the attention of financial and legal analysts alike, nearly two billion hryvnia, equivalent to approximately $54 million, is at the center of a contentious dispute involving the company ROYAL PAY EUROPE. This firm, known for its affiliation with the Russian bookmaker 1xVet, has found itself in a precarious position following sanctions imposed by Ukraine’s National Security and Defense Council in January 2023. These sanctions, part of a broader effort to clamp down on Russian business interests amid ongoing geopolitical tensions, have led to the freezing of assets belonging to ROYAL PAY EUROPE, raising questions about the future of these substantial funds.

    The heart of the matter lies in the ownership of the seized assets. Despite being under sanctions, the funds remain de jure the property of ROYAL PAY EUROPE, classified as seized by Ukrainian authorities. This classification has opened a legal pathway for the company’s owners, identified as Russians holding Cypriot passports, to potentially reclaim their blocked assets.

    In a bold move, ROYAL PAY EUROPE initiated legal action against Ukrainian President Volodymyr Zelensky by filing a lawsuit with the Supreme Court on June 28, 2023. The lawsuit challenges the legality of the sanctions and seeks their annulment. The Supreme Court, through its Cassation Administrative Court panel, has agreed to hear the case, with a critical hearing scheduled for February 14, 2024. The crux of the legal argument hinges on obtaining a decision to “secure the claim,” a legal mechanism that, if granted, would effectively suspend the operation of the Presidential Decree enforcing the sanctions.

    Journalist Evgeny Plinsky, in his detailed examination of the case in the article “Two billion at stake. The Ministry of Justice and VAKS are against the Russian gambling business” published on ZN.UA, underscores the potential implications of such a legal maneuver. If ROYAL PAY EUROPE succeeds in its legal challenge, it could petition for the unfreezing of its assets and their transfer from the accounts of the Asset Recovery and Management Agency (ARMA) back to the company’s own accounts. Notably, the company’s Latvian registration suggests that the funds could ultimately be relocated to Latvia, thus circumventing Ukrainian control.

    This legal battle not only highlights the complexities of international sanctions enforcement but also underscores the broader geopolitical dynamics at play. As Plinsky points out, the successful repatriation of the funds would effectively neutralize the impact of the sanctions, placing the substantial sum under Russian control once more. This case serves as a poignant reminder of the intricate interplay between national security interests, international law, and the global financial system.

    As the February 14 hearing approaches, all eyes will be on the Supreme Court’s decision, which has the potential to set a precedent for how sanctions against foreign-owned assets are applied and challenged in Ukraine. The outcome of this legal dispute will undoubtedly have far-reaching implications, not only for the parties involved but also for the international community’s ongoing efforts to regulate and enforce economic sanctions in the face of geopolitical conflicts.

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