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PGO freezes all accounts of ArcelorMittal Kryvyi Rih due to dispute over rent payments for iron ore extraction

KYIV. Jan 5 (Interfax-Ukraine) – On January 4, the Prosecutor General’s Office (PGO) of Ukraine, along with Shevchenkivsky District Court of Kyiv froze bank accounts of PJSC ArcelorMittal Kryvyi Rih (Dnipropetrovsk region).

According to a press release of the company on Wednesday, the PGO representatives appealed to Ukrainian banks with a requirement to comply with the court’s decisions on seizing the company’s accounts on November 30, 2021.

It is specified that the dispute concerns the approach to the calculation of rent. On November 4, 2021, the District Administrative Court upheld ArcelorMittal Kryvyi Rih’s position by dismissing the civil case against the company brought by the State Tax Service. An appeal has been filed with the tax authorities, and the company is preparing to defend its position in the administrative court of appeal.

"Even after the administrative court ruled in favor of ArcelorMittal Kryvyi Rih, on November 17 the Prosecutor General’s Office and the Security Service of Ukraine brought criminal charges against an ArcelorMittal Kryvyi Rih senior executive. The company considers these charges baseless and a clear example of political pressure on a major foreign investor," the company said in the press release.

Still, the criminal charges, however contrived, are brought against an individual, not the company. There is no current tax related civil proceeding against ArcelorMittal Kryvyi Rih and therefore no legal grounds to freeze the company’s accounts, the company said.

Chief Administrative Officer of ArcelorMittal Kryvyi Rih Artem Filipyev said the rule of law as a principle seems to have eroded in Ukraine. After the district court ruled in favor of ArcelorMittal and while the civil appeal of authorities is pending, aggressive measures were taken by General Prosecutor against the company, in contravention to the letter and the spirit of the law.

"It is difficult to understand what is driving this action, which is unheard of in any reasonable jurisdiction around the world. As the new year starts, our company is again pointedly reminded of the government’s hostility towards foreign investors. It is outrageous that the law enforcers are prepared to paralyze the operation of the country’s largest steel and mining company and to put at risk more than 20,000 people who will not be paid their salaries on time. These charges and the account freezes are groundless, and we will fight to protect the legitimate interests of our business and its numerous employees, suppliers and partners," the chief administrative officer said in the press release.