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UK government restricts use of Abramovich funds from Chelsea sale to within borders of Ukraine

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The UK government has imposed restrictions on using the £2.35 billion ($2.98 billion) generated from the sale of Chelsea football club by Roman Abramovich, according to Mike Penrose, the former head of Unicef UK and the head of the foundation responsible for distributing funds from the sale. Specifically, the funds cannot be utilized outside of Ukraine, where they are intended to support victims of the war, Penrose said in an article for The Times.

Penrose recalled that all the proceeds from Abramovich's sale of the club were donated to the proposed foundation, which is supposed to redirect the money to “all victims of the Ukraine war and its consequences” – terms which were subsequently written into the documents of sale approved by the UK government.

According to Penrose, the foundation has been told by the government that, die to an agreement with the EU, the gift will only be released if the organization agrees to limit spending to within the geographic borders of Ukraine, and doesn’t consider any request that would allocate money to either Ukrainians outside of Ukraine, families hosting them in other countries including in places like Britain, or to the many others suffering because of the war.

“As the recent unrest in Russia has helped to illustrate, we need to prepare for every scenario, including an increase in refugee outflow because of an increase in fighting. And in that scenario, aid from the foundation would have to, under the government’s and EU’s conditions, stop the moment the refugees left Ukraine. Indeed, many victims receiving humanitarian assistance, mostly women and children, follow that trajectory,” stressed the former Unicef UK head.

Penrose highlights that one of the indirect outcomes of the war is the large number of refugees residing in other nations. These refugees, who already face challenging circumstances, endure additional hardships caused by disruptions in the export of essential goods. But now, under conditions outlined by the UK government, the fund will not be able to alleviate these problems or bring in international experts to help Ukrainian organizations, including education for displaced Ukrainian children. He called the idea that £2.35 billion could not be spent to help the most vulnerable people, wherever they happen to reside, “almost unconscionable.”

Separately, Penrose stressed that the organization is already unable to allocate funds to Russia or Belarus, institutions associated with their governments or sanctioned individuals, as that would breach sanctions law.

“I can assure you that neither I, nor our esteemed board, wishes to go to jail. Furthermore, the government would have an observer within the foundation, able to raise objections over any project they believe could contravene sanctions law,” Penrose added.

In April 2023, the UK government delayed the transfer of $2.9 billion from Roman Abramovich to the fund to help victims of the war in Ukraine, with the funds being frozen in a British account. As reported by Bloomberg, after the sale of the club, Abramovich proposed to create a charitable foundation and give all the proceeds from the transaction to the victims of the war in Ukraine. Obstacles in transferring the financial aid arose due to the fact that Abramovich is under sanctions.

The UK and the EU implemented sanctions against Abramovich in March 2022 due to his connections with the Russian government. Abramovich, who denied any financial ties with the Kremlin, filed a lawsuit in an attempt to have the imposed restrictions lifted. The Ukrainian government put Abramovich on its own sanctions list. In January, the Wall Street Journal reported that the billionaire remains involved in talks between Ukraine and Russia, but Ukrainian, US and European officials do not expect him to play a “key role” in the talks.

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