Chelsea’s Roman Abramovich sanctioned: Explaining what UK government ruling means for the Premier League club and potential sale

The sanctions that had been expected against Chelsea owner Roman Abramovich for his ties to Vladimir Putin and the Russian regime were finally issued by the UK government on March 10, placing significant restrictions on the club’s operations, including the pending sale of the Premier League club.

Since Russia invaded Ukraine on February 24, governments around the world have hit back with economic sanctions against the country, but also against individuals with close ties to Putin and his government.

Abramovich was one of seven Russian oligarchs targeted by the UK government on March 10 with “a full asset freeze and travel ban” as someone “whose business empires, wealth and connections are closely associated with the Kremlin,” according to the official announcement.

“There can be no safe havens for those who have supported Putin’s vicious assault on Ukraine,” UK Prime Minister Boris Johnson said in the statement. “Today’s sanctions are the latest step in the UK’s unwavering support for the Ukrainian people. We will be ruthless in pursuing those who enable the killing of civilians, destruction of hospitals and illegal occupation of sovereign allies.”

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As part of the government announcement, which happened to come on the 117th anniversary of Chelsea’s founding, the government issued a special sporting license from the UK Treasury that expires on May 31, 2022, and which will allow Chelsea to continue to operate as a football club under restrictions.

Here’s a summary of what the club will be permitted to do:

  • Pay salaries: Chelsea can pay salaries of players, coaching staff and directors.
  • Pay expenses: The club can continue to cover the standard fees that are associated with regular operation of the club and maintenance, such as security, catering and stewards.
  • Receive income: Chelsea can receive funds based on pre-existing agreements, including broadcast revenue and player agreements, but those funds must be frozen.
  • Travel for matches: “Reasonable costs of travel” are allowed, but they’re not to exceed $ 26,000, which some have indicated may not be practical for Champions League travel.
  • Fulfill transfer and loan obligations: The club can continue to pay out loan or transfer fee obligations as part of deals struck prior to March 10, 2022.
  • Selling merchandise: No new merchandise sales may be made, but existing obligations will continue to be met. The club shop has been closed:
  • Honor existing tickets: Season-ticket holder obligations undertaken before March 10 will continue to be met and payments received. Ticket sales made prior to March 10 will continue to be honored, but no new tickets can be sold (including to away fans), according to reports.

The sporting license issued by the UK government that outlines all these restrictions can be revised or revoked at any time:

Chelsea issued a statement in which it indicates that the club is hoping to engage the government in a conversation about the scope of the special license and possible amendments to it “to allow the club to operate as normal as possible.”

The Premier League says that it “will now work with the club and the government to ensure the season will proceed as planned and in line with the government’s intention.”

Chelsea are the defending European champions and currently in third place in the Premier League table. They are also still competing in the UEFA Champions League Round of 16 and the FA Cup quarterfinals.

Can Chelsea be sold?

Abramovich saw the problems coming and he formally put the club up for sale on March 2. While bids were in the process of being received, the sanctions mean that Abramovich cannot personally benefit from a final sale as long as they’re in place.

The UK government can potentially give special dispensation for a sale of the club. A senior sports reporter for BBC Sport, Laura Scott, indicates that the key is that Abramovich cannot collect any of the proceeds.

The Telegraph’s Matt Law is reporting that the sale can still go through if the UK government is involved and can ensure that the Russian oligarch is not personally benefiting from the sale.

A government spokesperson clarified that a sale of the club would require another special license, and government involvement:

Why was Abramovich sanctioned?

The official government document identifying Abramovich as a target of financial sanctions says that the Chelsea owner has a “close relationship” with Putin, and “has received preferential treatment and concessions” from Putin and his government.

Abramovich is labeled as a “pro-Kremlin oligarch … associated with a person who is or has been involved in destabilizing Ukraine and undermining and threatening the territorial integrity, sovereignty and independence of Ukraine, namely Vladimir Putin, with whom Abramovich has had a close relationship for decades.

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“This association has included obtaining a financial benefit or other material benefit from Putin and the Government of Russia. This includes tax breaks received by companies linked to Abramovich, buying and selling shares from and to the state at favorable rates, and the contracts received in the run up to the FIFA 2018 World Cup.

“Therefore, Abramovich has received preferential treatment and concessions from Putin and the Government of Russia.”

The UK government document proceeds to outline that Abramovich’s businesses have potentially contributed to the current war through his stake in steel manufacturing and mining company Evraz PLC which could be “potentially supplying steel to the Russian military which may have been used in the production of tanks. “

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