KIEV, Nov. 4 – The Ukrainian government sued former Prime Minister Yulia Tymoshenko in the U.S. and Switzerland seeking to recover $200 million that may have been embezzled two decades ago, Interfax-Ukraine reported Monday.

The news agency cited a report from Lawrence Graham, a London-based law firm, which has been handling the lawsuit on behalf of the Revenue and Fees Ministry of Ukraine.

The lawsuit comes at a critical time as Ukraine is under pressure from the European Union to release Tymoshenko, who has been jailed to seven years in October 2011 for abuse of power.

The EU views the jailing as a case of selective justice and has suggested that releasing Tymoshenko for medical treatment in Germany would open way for Kiev to sign a free trade and political association agreement with Brussels on November 29.

Ukrainian lawmakers prepare to vote on a bill this week that may let Tymoshenko got for the treatment in Germany. The latest lawsuit, however, may influence pro-government lawmakers that may reject the bill.

The lawsuit targets both, Tymoshenko and former Prime Minister Pavlo Lazarenko, who was sentenced by U.S. court to nine years in prison on money laundering charges.

Lazarenko was released from U.S. Federal Correctional Institution Terminal Island in California on November 1, 2012, but was quickly detained again, this time on immigration related charges.

Lazarenko and Tymoshenko are believed to have had close relationship when he was the prime minister in 1996-1997. That relationship is believed to have helped Tymoshenko win lucrative natural gas supply contracts for her United Energy Systems of Ukraine, making it the company country’s largest gas trader at the time.

Volodymyr Oliynyk, a senior Regions Party lawmaker, said that Ukraine may seek to recover up to $500 million in funds that he links to Lazarenko and Tymoshenko.

“Some of this is joint money with Lazarenko that has been frozen on accounts in the U.S.” Oliynyk said quoted by the Regions Party. “Some money is in a Swiss bank on the account of Tymoshenko.”

“If we let her go [to Germany] for whatever reason, this means that the state budget will never see this money again,” Oliynyk said.

He also said that Tymoshenko’s company also owes more than $400 million to the Russian Defense Ministry.

"And from our side it would be very strange to release Tymoshenko to where her illegally acquired wealth is hidden abroad,” Oliynyk said. “People will not understand us if we let her go to her funds.”

Serhiy Vlasenko, Tymoshenko’s lawyer, dismissed the allegations and said the lawsuit is without merit.

Vlasenko cited a U.S. court ruling that he said had failed to establish a criminal relationship between Lazarenko and Tymoshenko.

"The court found that this information is unfounded,” Vlasenko said.

EU envoys have repeatedly asked Yanukovych to pardon Tymoshenko.

With pressure mounting on him, Yanukovych on October 17 said he was ready to sign a law to allow her to go abroad for treatment, if such a draft was adopted by Parliament. (tl/ez)