🔗 Share this article Moscow Demands Significant Amount in Damages against Euroclear Regarding Seized Assets The Russian central bank has announced it is claiming damages amounting to $230 billion against the financial institution Euroclear. This legal step represents a clear warning by the Kremlin regarding plans to use immobilized Russian sovereign assets to support Ukraine. The Substantial Demand According to reports in local state media, the monetary authority initiated a lawsuit last week for roughly 18 trillion roubles. This amount corresponds to the stated $230 billion claim. European Union officials will determine in the coming days regarding a proposal to leverage approximately €210 billion in immobilized Russian state funds. This scheme entails providing Ukraine with a large loan to fund its military and financial needs. Most of these assets, totaling €185 billion, reside at the Euroclear depository in Brussels. Euroclear acts as the main custodian for the Kremlin's frozen sovereign wealth. Dispute on Ownership European Union authorities have argued that their plan is on solid legal ground. Their position is based on the principle that title of the state assets remains with Russia, despite being it was frozen in European countries following the 2022 military offensive of Ukraine. The Russian government, however, has called any use of the funds as theft. It has threatened reciprocal measures, including seizing European corporate assets within Russia. The head of Russia's sovereign wealth fund, who has assumed a prominent role in peace negotiations, stated on a social media platform that Russia "will prevail in court" and retrieve its funds. He added that the European Union, the common currency, and Euroclear "will suffer" from the proposal. Strategic Positioning With statements interpreted as an effort to create division between Europe and the United States, the official described the assets plan as "a vicious assault on property rights and the global financial system established by the United States." The clearing house declined to provide a statement on the latest lawsuit. It has in the past stated it is facing over 100 legal cases in Russian courts. Enforcement Challenges Although courts in EU countries are not expected to enforce rulings from Russian tribunals, experts expect Moscow to pursue enforcement in countries with stronger relations to the Kremlin. "Russian monetary authorities could try to enforce a Russian court's decision against Euroclear in jurisdictions like China, Hong Kong, the UAE, Kazakhstan, and other friendly states, provided that relevant assets can be located," commented a lawyer from an international firm. European Safeguards EU officials said they are developing measures to discourage other nations from assisting any Russian lawsuits against EU entities. They are also crafting safeguards to protect EU countries with investments in Russia from what they call "illegal expropriation." The Proposed Loan Mechanism Under the complex plan, the EU would issue an first €90 billion loan to Ukraine, backed by the proceeds generated from the frozen assets at Euroclear. Importantly, Russia's ownership claim on the underlying funds would remain unaffected. Kyiv would only be obligated to repay the loan if and when Russia consented to pay compensation for the immense damage inflicted during the ongoing war. Other Funding Ideas The Belgian government, supported by Italy, Bulgaria, and Malta, has asked the EU to examine an different approach for funding Ukraine. This entails common EU borrowing to fund a loan, backed by unused funds within the EU budget. Such a proposal, nevertheless, demands full agreement among all 27 EU countries. Hungary's government, viewed as aligned with the Kremlin, has previously expressed its opposition. Speaking on Monday, the EU foreign policy chief, Kaja Kallas, said the proposed loan scheme as "the most credible option" for supporting Ukraine. "This mechanism is secured against the Russian frozen assets, which means it is not drawn from our public funds, which is also important," she stated. "Furthermore, it delivers a clear message that if you do all this damage to another nation, you have to pay for the reparations."