Insights Government publishes unilateral declaration regarding the sale of Chelsea Football Club

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The declaration states that the UK will exercise its legislative powers in relation to the sale of Chelsea Football Club in the following manner, having regard to the vital importance of maintaining the integrity of financial sanctions relating to actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.

The current owner of Chelsea Football Club, Roman Abramovich, has been designated under regulation 5 of the Russia (Sanctions) (EU Exit) Regulations 2019, as amended (the Russia Regulations). Mr Abramovich is therefore subject to the provisions of regulations 11 to 15 of the Russia Regulations, which freeze the assets that he owns, holds or controls, and prohibit making funds or economic resources available to him or for his benefit. These provisions also apply to Chelsea Football Club and Fordstam Ltd, the parent company, which Roman Abramovich holds or controls within the meaning of the Russia Regulations.

The declaration states that the Treasury, as the responsible authority under the Russia Regulations, is considering an application under regulation 64 of the Regulations to license the sale of Chelsea Football Club by way of exception from these provisions. If the transaction is licensed and takes place, all proceeds from the sale will be held in a bank account in the UK, which will be frozen in accordance with the Russia Regulations. Any further use of the proceeds will require an additional licence under regulation 64. The Treasury will consider an application for such a licence in accordance with the Russia Regulations.

Essentially, the UK will ensure that Mr Abramovich does not benefit from the sale of Chelsea Football Club in any way, and that the proceeds of such a sale are used for humanitarian purposes in Ukraine. Accordingly, the Treasury will not issue a licence which enables any part of the proceeds from a sale to be used in a way which would directly or indirectly benefit Mr Abramovich or any other designated person. Further, the Treasury will issue a licence which ensures that such proceeds are used for exclusively humanitarian purposes in Ukraine only. To read the declaration in full, click here.