UK blocks salary payment at Abramovich charity amid dispute over Chelsea sale proceeds

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UK blocks Abramovich charity funds

Highlights

The UK government is blocking a sanctions licence needed for Foundation for the Victims of Conflict head Mike Penrose to receive over £10,000 in unpaid salary since January.
Over £2.5bn from the Chelsea sale remains frozen due to a dispute between the UK and the charity over restricting the funds to humanitarian use in Ukraine versus broader global needs.
If released, the Chelsea sale proceeds would make the foundation the UK's fifth-largest grant-maker, but the government insists the funds must only support Ukraine-related humanitarian purposes.

Licensing dispute over frozen funds

As reported by the Financial Times, Mike Penrose, who leads the Foundation for the Victims of Conflict, says the UK government is blocking a sanctions licence needed for him to receive his salary, leaving more than £10,000 unpaid since the exemption request was submitted in January.

Penrose says the government has limited the use of the Chelsea sale proceeds to humanitarian purposes in Ukraine, while the foundation wants to direct the money to the areas of greatest need globally. He argues the issue is political rather than legal, and says the UK has "backed itself into a corner" by refusing a broader humanitarian mandate.

Abramovich was sanctioned by the UK after Russia's full-scale invasion of Ukraine in 2022. He was then allowed to sell Chelsea on the condition that the proceeds would go to victims of the war in Ukraine, but the money remains frozen in a bank account controlled by Abramovich because of disagreement over the final destination of the funds.

The UK government says the chancellor and foreign secretary have been clear that the full proceeds from the sale of Chelsea FC must be used for humanitarian purposes in Ukraine, in line with Abramovich's commitment at the time of the sale. The Treasury says it does not comment on the status of specific sanctions licences.

Charity plans and wider sector impact

In April, the foundation applied for charitable status in an effort to unlock the funds, and the Charity Commission says it is assessing the application. Last December, the government threatened legal action within 90 days if Abramovich did not hand over the money voluntarily.

If released, the £2.5bn endowment would make the foundation the UK's fifth-largest grant-making body by endowment size, according to UK Grantmaking. Penrose says the organisation would not send money to Russian humanitarian efforts, calling that both illegal and unprincipled.

The case also highlights tension between political commitments tied to sanctions and the broader humanitarian funding landscape. United Nations data cited in the report lists Ukraine as the best-funded crisis area in dollar terms, while Penrose says other emergencies remain severely underfunded despite pressing need.

We previously covered U.S. senators’ agreement on the Sanctioning Russia Act, a bipartisan proposal designed to intensify economic pressure on Russia over its war in Ukraine. The draft outlines expanded primary and secondary sanctions on Russian officials, banks, and the so-called shadow fleet, and would also allow tariffs of up to 100% on goods from the largest importers of Russian oil and gas to curb sanctions evasion.

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