On Thursday, nearly 50 Belgian companies were told to disclose their Russian state assets, setting the stage for the seizure of Russian property in connection with the disputed $50 billion Yukos verdict.

In short, Russia was required to submit a plan for a €1.6 billion payment by June 15 pursuant to the 2014 arbitration court decision which found in favor of Yukos shareholders who the ECHR ruled were treated unfairly when Moscow seized the company amid allegations of fraud and other crimes. Russia appealed the ruling and lost.

Because Russia does not look set to comply, Belgium is effectively moving to enforce the ruling itself. Austria and France also moved to freeze Russian assets on Thursday.

It now appears the timing of the asset freezes was designed to stir controversy in St. Petersburg where Russia is hosting an annual business forum (described by some as a “Russian Davos) and where Greece is executing the first stages of the dreaded 'Russian pivot.'

Now, Russia looks set to retaliate, threatening to freeze Belgian, Austrian, and French assets until such a time as the countries’ “illegal” actions are reversed. RT has more:

Moscow will take reciprocal action in response to the seizure of its foreign assets, Foreign Minister Sergey Lavrov has warned. “Our response would be in kind. This is inevitable. This is the only way of acting in international affairs,” he told RBK-TV in an intervew. Lavrov was commenting on the seizure in Belgium and France of Russian state-owned assets. The arrest were made on request of beneficiaries of the now-defunct oil giant Yukos, who were awarded damages from Russia by an arbitration court in The Hague. Russia is in the process of challenging the ruling. The minister added that his priority in this situation now is to unfreeze the accounts of the Russian Embassy in Belgium. The freezing of diplomats' accounts “absolutely goes against the Vienna accords on foreign relations that guarantee the immunity of diplomatic assets, real estate and corresponding things. Belgian foreign ministry officials are indicating to us that they were not aware of it,” Lavrov said. “We don't accept these explanations.”

And here’s FT with the opposing viewpoint...

Tim Osborne, director of GML, the former Yukos holding company, told the Financial Times he was aware of the French and Belgian moves but could not confirm exactly what had been frozen. The assets had been “attached” to GML’s claim to get the Yukos ruling enforced, to ensure they could not be moved abroad before legal hearings expected within the next year. “We still have to convince a legal court [in these countries] that our arbitration award should be recognised as the equivalent of a judgment in their court, so they can enforce it,” he said. “We remain confident that we will win, and that we will collect if not all, then a substantial part, of the award — but it will take time.” Mr Osborne said GML had started similar steps to get the UK and US to recognise the arbitration panel award but other countries had different asset seizure rules. Andrei Belousov, an economic aide to Vladimir Putin, Russian president, told the St Petersburg forum that the country planned to appeal against the award. “We are concerned. We expect a number of countries to take similar measures,” he said.

...and here's a bit more from Bloomberg (note the bit about holding Russian reserves outside of US and EU assets):

Russia is bracing for more foreign asset seizures in a clash over the defunct Yukos Oil Co. after France and Belgium began enforcing a $50 billion damages award. The Permanent Court of Arbitration in The Hague ruled last July that Russia is liable to pay almost half of the $103 billion plus interest sought by GML Ltd., a holding company belonging to four former owners who don’t include Khodorkovsky. Russia’s appeal of the decision may be heard in November, Finance Minister Anton Siluanov told reporters, while Ulyukayev ruled out paying the damages. Lawyers and government agencies are studying the Belgian ruling, Kremlin spokesman Dmitry Peskov told reporters. While the asset freezes are unlikely to affect the Bank of Russia’s international reserves, keeping the cash pile outside of U.S. or EU assets is under consideration, Siluanov said. “No such decision has been taken so far, we believe that we can keep the existing structure for now,” he said. The Yukos plaintiffs are targeting Russian government assets in France and Belgium that aren’t protected by diplomatic immunity in a process that could take years to resolve, GML Director Tim Osborne said by phone from London. “We are not in this for a Pyrrhic victory,” he said. “We haven’t ruled out other jurisdictions, but they will be more difficult” because of local laws on asset seizure.

Given the timing (see above) and given the situation in Ukraine and Moscow's rapidly deteriorating 'relationship' (if you can call it that) with Washington and NATO, one cannot help but wonder if Europe is set to use the Yukos case as yet another tool for applying political pressure to the Kremlin. After all, the stage is already set for stepped up economic sanctions and the EU has filed anti-trust charges against Gazprom (even as the energy giant inked an MOU in St. Petersburg on Thursday to double the capacity of what is effectively a Ukraine bypass line). Needless to say, if GML is successful at convincing the US and/or the UK to enforce the ECHR ruling via similar confiscations, things could get very interesting, very quickly.