Aid to Ukraine from the sale of Chelsea was delayed due to administrative complications in Britain.

The club, owned by Russian billionaire Abramovich, was sold for $2.9 billion a year ago.

Foundation is being set up to help Ukraine with a budget of £2.34 billion ($2.9 billion) from the proceeds from the sale of Roman Abramovich to Chelsea. It is almost ready to go live and has chosen a proposed chairman, but UK government approval is taking longer than expected.

“We are ready to get going, just waiting for approval,” said Mike Penrose, the former UNICEF UK executive director who is acting chief executive of the new organisation. “There are complications and delays with political approval between both the UK and the European Union, and within the Kingdom as well.

Penrose said his team had completed all the paperwork needed to set up the foundation, including nominating Jan Egeland, the NRC’s general secretary, as chair, and preparing an international shortlist of candidates for a seven-member council, but he declined to reveal the names, saying they were all They have been working in the charity sector for a long time. Penrose said he had drawn up a shortlist of investment managers to oversee the funds.

He also said, “We will not make any decisions until we know the money is coming… We don’t want to end up with a charity without money.”

Funds remain frozen

Last year, the UK government released around £200,000 to fund the legal and administrative costs of setting up the charity, hiring experts to develop a plan for spending the money. Penrose says the foundation plans to focus on humanitarian projects that support medical and educational programs and shelter for Ukrainians.

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Abramovich, a Russian businessman with a fortune of more than $7.5 billion, according to the Bloomberg Billionaires Index, sold the London-based football club to a consortium led by American investor Todd Boyle in May 2022, after Britain and the Federation imposed European Union” sanctions him over accusations of his ties to Russian President Vladimir Putin.

Almost a year after the sale, the money is still frozen in a bank account in the UK and none of it has reached Ukraine. The British Foreign Office declined to comment.

A person familiar with the matter said the EU has provided the parties involved with legal clarity on how to apply its sanctions, and does not expect further action will be required on their part.

“humanitarian purposes”

The controversial sale of Chelsea hinged on Abramovich not profiting from the sale of the club, who himself had proposed setting up a charity where all net proceeds from the deal would be donated to the victims of the war in Ukraine.

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A British government statement in May last year said the proceeds would be held in a British bank account, “to be used for humanitarian purposes in Ukraine”. The statement added that the UK would work with the European Commission and the Portuguese government – where Abramovich holds citizenship – to ensure compliance with sanctions and determine the destination of proceeds.

According to another person who spoke on condition of anonymity, the practicalities of this donation have proven very complex, and many hurdles still need to be cleared before Ukraine can see any money. It is not clear when that will happen.

In November 2022, British Foreign Secretary Leo Docherty told the House of Commons that he hoped the money was “about to start its journey to Ukraine to help people who really need help”.

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In January, The Daily Telegraph reported that the UK government was close to handing over the proceeds to the foundation, with arrangements likely to be in place weeks away.

An independent foundation is being set up in the UK to manage and distribute Abramovich’s money, and the person familiar with its structure said humanitarian experts outside the UK government are responsible for the process, which has proven to be complex.

The plan is for the proceeds to be transferred to the foundation headed by Penrose, with the source stating that once the foundation is set up, it will then have to apply for a license to access the funds from the Financial Sanctions Enforcement Office, the division responsible for sanctions. in the British Treasury.

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He added that the UK government would then have to assess the license application in terms of the risks of circumventing sanctions. The entire process may take a long time to complete.

complex issue

The use of sanctioned assets is a complex legal issue, with both the EU and the UK exploring ways to seize frozen Russian assets and use them to contribute to the reconstruction of Ukraine.

The European Union recently imposed reporting obligations, and its laws allow frozen assets of Russia’s central bank to be invested to help Kiev. But applying a similar mechanism to the assets of sanctioned individuals and entities could be problematic because the restrictions are designed to be temporary.

Separately, Canada announced that it intends to seize $26 million in sanctionable assets from Abramovich, and use the proceeds of the forfeiture to help rebuild Ukraine and compensate war victims.

But Chelsea’s money is a different case, because Abramovich himself suggested setting up a charity when he announced he was selling the football club.