🔗 Share this article Moscow Demands Significant Sum in Compensation against Euroclear over Frozen Assets The Russian central bank has announced it is claiming damages valued at $230 billion from the financial institution Euroclear. This action represents a direct response by the Kremlin regarding plans to use frozen Russian sovereign assets to aid Ukraine. The Financial Lawsuit Based on accounts in Russian news outlets, the central bank filed a claim last week for approximately 18 trillion roubles. This figure is equivalent to the stated $230 billion claim. EU leaders are set to determine later this week on a plan to leverage around €210 billion in frozen Russian assets. This scheme involves granting Ukraine with a large loan to finance its military and economic needs. The vast majority of these funds, totaling €185 billion, are stored at the Euroclear depository in Brussels. Euroclear acts as the primary keeper for the Russian immobilised sovereign wealth. A Clash Over Legality European Union authorities have argued that their proposal is on solid legal ground. Their position rests on the principle that ownership of the state assets remains with Russia, despite being it was immobilized in European jurisdictions shortly after the 2022 invasion of Ukraine. Moscow, however, has called any use of the funds as illegal appropriation. It has warned of retaliatory actions, such as confiscating European private investors' holdings within Russia. The head of Russia's sovereign wealth fund, a figure who has taken on a prominent role in diplomatic talks, wrote on X that Russia "will win in court" and retrieve its funds. He added that the European Union, the common currency, and Euroclear "will suffer" from the proposal. Geopolitical Maneuvering In comments interpreted as an effort to create division between Europe and the United States, Dmitriev characterized the proposal as "a vicious assault on the right to ownership and the international reserves system established by the United States." The clearing house refused to provide a statement on the latest lawsuit. It has in the past noted it is facing more than 100 lawsuits in Russian jurisdictions. Legal Hurdles Ahead Although courts in European nations are unlikely to recognize rulings from Russian tribunals, experts expect Moscow to pursue implementation in nations with stronger ties to the Kremlin. "Russian monetary authorities could try to implement a Russian legal ruling against Euroclear in countries such as China, Hong Kong, the UAE, Kazakhstan, and other friendly states, provided that such assets can be identified," stated a legal expert from an international firm. European Safeguards European authorities said they are developing steps to discourage other nations from aiding any Russian legal action against EU entities. Additionally, they are crafting safeguards to shield EU member states with investments in Russia from what they call "unlawful expropriation." How the Funding Would Work Under the complex plan, the EU would issue an first €90 billion loan to Ukraine, using the cash generated from the immobilized assets at Euroclear. Critically, Russia's legal claim on the underlying funds would stay untouched. Ukraine would only be required to repay the loan if and when Russia agreed to pay reparations for the immense damage inflicted during the nearly four-year conflict. Other Funding Ideas The Belgian government, backed by Italy, Bulgaria, and Malta, has asked the EU to examine an different method for funding Ukraine. This entails common EU debt issuance to secure a loan, backed by unused funds within the European budget. This alternative move, however, demands full agreement among all 27 member states. Hungary's government, viewed as aligned with the Kremlin, has previously expressed its objection. Commenting on Monday, the EU top diplomat, a senior official, said the proposed loan scheme as "the strongest option" for aiding Ukraine. "The reparations loan is based on the Russian immobilized funds, meaning it is not drawn from our taxpayers' money, which is also significant," she stated. "Furthermore, it delivers a powerful message that when you do all this damage to another nation, you must pay for the reparations."