🔗 Share this article Moscow Demands Substantial Sum in Compensation against Euroclear Regarding Frozen Assets The Russian central bank has declared it is pursuing compensation totaling $230 billion against the securities depository Euroclear. This move represents a direct response from the Kremlin regarding plans to utilize frozen Russian state funds to aid Ukraine. The Legal Claim According to accounts in Russian state media, the monetary authority filed a lawsuit last week for roughly 18 trillion roubles. This figure corresponds to the aforementioned $230 billion claim. EU leaders will decide later this week on a plan to leverage around €210 billion in immobilized Russian assets. The proposal involves granting Ukraine with a large loan to finance its military and economic needs. The vast majority of these assets, amounting to €185 billion, are held at the Euroclear clearing house in Brussels. Euroclear acts as the main custodian for the Russian immobilised sovereign wealth. A Clash Over Legality European Union authorities have argued that their plan is on solid legal ground. Their position rests on the principle that ownership of the sovereign wealth still belongs to Russia, despite being it was immobilized in European jurisdictions following the 2022 invasion of Ukraine. The Russian government, in contrast, has called any use of the funds as illegal appropriation. Authorities have threatened reciprocal measures, such as seizing EU corporate holdings within Russia. The head of Russia's sovereign wealth fund, a figure who has assumed a prominent position in diplomatic talks, stated on a social media platform that Russia "will prevail in court" and retrieve its assets. He warned that the European Union, the common currency, and Euroclear "will suffer" from the proposal. Strategic Positioning With statements seen as an attempt to create division between Europe and the United States, Dmitriev described the assets plan as "a severe attack on property rights and the global financial system established by the United States." The clearing house declined to provide a statement on the new lawsuit. The institution has previously stated it is facing more than 100 legal cases in Russian courts. Enforcement Challenges While courts in EU countries are unlikely to recognize judgments from Russian courts, analysts expect Moscow to seek implementation in countries with closer relations to the Kremlin. "The Bank of Russia may attempt to implement a Russian court's decision against Euroclear in jurisdictions like China, Hong Kong, the UAE, Kazakhstan, and other friendly nations, if relevant assets can be identified," commented a lawyer from an international firm. EU Countermeasures European authorities indicated they are developing steps to discourage other countries from aiding any Russian legal action against European companies. They are also designing protections to shield EU member states with investments in Russia from what they call "illegal expropriation." The Proposed Loan Mechanism According to the detailed plan, the EU would provide an first €90 billion loan to Ukraine, backed by the cash generated from the frozen assets at Euroclear. Importantly, Russia's legal claim on the underlying funds would stay untouched. Kyiv would only be obligated to return the loan if and when Russia agreed to pay compensation for the vast destruction inflicted during the ongoing war. Alternative Proposals The Belgian government, backed by Italy, Bulgaria, and Malta, has urged the EU to consider an different approach for financing Ukraine. This involves joint EU debt issuance to fund a loan, using unused funds within the EU budget. Such a proposal, nevertheless, requires full agreement among all 27 member states. Hungary's government, viewed as aligned with the Kremlin, has already signaled its objection. Commenting on Monday, the EU foreign policy chief, a senior official, described the proposed loan scheme as "the most credible solution" for supporting Ukraine. "This mechanism is secured against the Russian frozen assets, which means it is not drawn from our taxpayers' money, which is equally significant," she remarked. "Furthermore, it sends a powerful signal that if you cause all this destruction to another nation, you must pay for the reparations."