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    Court reinstates order for Russia to pay $50 billion over Yukos

    US Special Representative for Venezuela Elliott Abrams during a briefing at the US Department of State about new sanctions February 18, 2020, in Washington, DC. - The United States on Tuesday announced sanctions against a subsidiary of Russian state-controlled oil giant Rosneft over its continued trade with Venezuela in defiance of Washington's attempt to break leftist President Nicolas Maduro's grip on power. (Photo by Brendan Smialowski / AFP) (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)
    Photo by BRENDAN SMIALOWSKI/AFP via Getty Images
    US Special Representative for Venezuela Elliott Abrams during a briefing at the US Department of State about new sanctions Tuesday, in Washington, DC.

    THE HAGUE — In a major legal defeat for the Russian government, a Dutch appeals court on Tuesday reinstated an international arbitration panel’s order that it should pay $50 billion compensation to shareholders in former oil company Yukos.

    The ruling overturned a 2016 decision by The Hague District Court that quashed the compensation order on the grounds that the arbitration panel did not have jurisdiction because the case was based on an energy treaty that Russia had signed but not ratified.

    The Hague Court of Appeal ruled that the 2016 decision “was not correct. That means that the arbitration order is in force again.”

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    “This is a victory for the rule of law. The independent courts of a democracy have shown their integrity and served justice. A brutal kleptocracy has been held to account,” Tim Osborne, the chief executive of GML, a company made up of Yukos shareholders, said in a statement.

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    The Russian Justice Ministry said in a statement after the verdict that Russia will appeal. It charged that the Hague appeals court “failed to take into account the illegitimate use by former Yukos shareholders of the Energy Charter Treaty that wasn’t ratified by the Russian federation.”

    The arbitration panel had ruled that Moscow seized control of Yukos in 2003 by hammering the company with massive tax claims. The move was seen as an attempt to silence Yukos CEO Mikhail Khodorkovsky, a vocal critic of President Vladimir Putin.

    The 2014 arbitration ruling said that Russia was not acting in good faith when it levied the massive claims against Yukos, even though some of the company’s tax arrangements might have been questionable.

    Meanwhile, the Trump administration announced sanctions Tuesday on a Russian state-controlled brokerage that has helped the Venezuelan government skirt an American oil embargo and enabled President Nicolas Maduro to keep his grip on power in the South American country.

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    Administration officials said Rosneft Trading SA and its president, Didier Casimiro, would be added to a financial blacklist in a move that is expected to largely freeze him and the company out of the global financial system.

    The action is an unusually aggressive move against a company linked to the Russian state.

    Secretary of State Mike Pompeo said Rosneft Trading is the primary broker for the sale and transportation of Venezuelan crude oil, which has been under sweeping US sanctions since January 2019 as part of the pressure campaign against Maduro.

    “Rosneft Trading has propped up the dictatorial Maduro, enabling his repression of the Venezuelan people,” he said in announcing the sanctions.

    Rosneft Trading, based in Switzerland, was created in 2011 to facilitate trades on behalf of the parent company, which has been under US sanctions since 2014, said Elliott Abrams, the special US envoy for Venezuela.

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    The brokerage has helped arrange sales of Venezuelan crude by deceiving customers, mostly in Asia, about the source of the oil with such tactics as changing the name of the tanker, Abrams said.

    Rosneft spokesman Mikhail Leontyev called the sanctions “an absolute overreach” in comments to Russia’s Kommersant FM radio station.