The Ukrainian Seaports Authority is preparing to demand that the government of the Russian Federation pay compensation for the losses it incurred as a result of the temporary occupation of the Autonomous Republic of Crimea.

The Ukrainian Seaports Authority announced this on November 20, the CFTS portal reports.

The Ukrainian Seaports Authority said that the value of state assets that were on the books of its Crimean units and were illegally appropriated by the self-proclaimed Crimean authorities is more than UAH 1.24 billion.

According to the Ukrainian Seaports Authority, this is the second avenue that the authority is pursuing with the aim of receiving compensation for the losses it incurred in the Crimea. Earlier, the state-owned Ukrainian Seaports Authority provided information about its own assets on the peninsula to the Ukrainian Ministry of Justice, which filed a lawsuit with the European Court of Human Rights.

"This time we are using the provisions of the Agreement on Encouragement and Reciprocal Protection of Investments. The first step is to send claims for damages directly to the government of the Russian Federation. If we do not receive a response within six months, the case will be referred to international arbitration," the Ukrainian Seaports Authority’s head Raivis Veckagans said.

A written notice requesting settlement of the dispute over compensation for the loss of investment resulting from the expropriation of Ukrainian Seaports Authority’s assets in the Crimea in accordance with the Agreement between the Cabinet of Ministers of Ukraine and the government of the Russian Federation on promotion and mutual protection of investments, which entered into force in 1998, is planned to be sent to the government of the Russian Federation before the end of 2019.

The Ukrainian Seaports Authority will be represented in the dispute with Russia by the Covington & Burling LLP law firm.

The Ukrainian Seaports Authority emphasized that the fact that it is suing over the assets in the Crimea does not mean that it recognizes the existence of any legal grounds for the occupation and annexation of the on the peninsula, which remains a Ukrainian territory.

As reported earlier, the seaports located on the peninsula (Yevpatoriya, Kerch, Sevastopol, Feodosia, and Yalta) were closed by a Ukrainian Cabinet of Ministers directive dated April 30, 2014 and the Ukrainian Ministry of Infrastructure’s directive dated June 16, 2014, following the annexation of Crimea by the Russian Federation.

The CFTS portal recently wrote a report on how the situation in the Sevastopol seaport changed after the annexation of the Crimea by Russia. According to the report, the Sevastopol seaport’s cargo turnover has reduced 30-fold in the five years since the annexation of the peninsula. Due to the international sanctions that were imposed on enterprises operating in the Crimea after the annexation of the peninsula, the volume of cargo transshipment by the Sevastopol seaport has fallen from more than 6 million tons in 2013 to less than 200,000 tons by the end of 2018.