🔗 Share this article Russia Seeks Significant Sum in Damages against Euroclear over Seized Assets Russia's monetary authority has declared it is pursuing damages amounting to $230 billion from the securities depository Euroclear. This legal step constitutes a clear warning from the Kremlin against proposals to utilize frozen Russian sovereign funds to aid Ukraine. The Substantial Demand Based on accounts in local state media, the central bank initiated a claim last week for roughly 18 trillion roubles. This amount corresponds to the stated $230 billion claim. European Union officials are set to decide in the coming days regarding a plan to leverage approximately €210 billion in immobilized Russian state funds. This scheme entails providing Ukraine with a substantial loan to finance its defence and financial needs. The vast majority of these funds, totaling €185 billion, are stored at the Euroclear depository in Brussels. This institution serves as the main keeper for the Russian immobilised sovereign wealth. Divergent Legal Views EU authorities have argued that their proposal is on solid legal ground. Their position is based on the fact that title of the state assets still belongs to Russia, even though it was immobilized in EU jurisdictions shortly after the 2022 military offensive of Ukraine. The Russian government, in contrast, has called any utilization of the funds as illegal appropriation. Authorities have threatened retaliatory measures, such as confiscating EU private investors' holdings within Russia. Kirill Dmitriev, who has assumed a key 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 euro, and Euroclear "will suffer" from the plan. Wider Implications With statements interpreted as an effort to drive a wedge between Europe and the United States, the official described the assets plan as "a severe attack on the right to ownership and the global financial system established by the United States." Euroclear refused to provide a statement on the latest lawsuit. The institution has previously noted it is facing over 100 lawsuits in Russian jurisdictions. Legal Hurdles Ahead Although judges in EU countries are not expected to recognize judgments from Russian tribunals, analysts anticipate Moscow to pursue implementation in nations with stronger ties to the Kremlin. "The Bank of Russia could try to enforce a Russian court's decision against Euroclear in countries such as China, Hong Kong, the UAE, Kazakhstan, and other sympathetic nations, if relevant assets can be located," stated a lawyer from an NSP law firm. European Safeguards EU officials said they are developing measures to deter other countries from aiding any Russian legal action against European companies. Additionally, they are designing protections to shield EU member states with investments in Russia from what they term "unlawful expropriation." How the Funding Would Work According to the complex scheme, the EU would provide an first €90 billion loan to Ukraine, backed by the cash earned from the frozen assets at Euroclear. Critically, Russia's legal claim on the underlying funds would stay unaffected. Ukraine would only be required to repay the money in the event that Russia consented to pay reparations for the immense destruction inflicted during the nearly four-year conflict. Other Funding Ideas The Belgian government, backed by Italy, Bulgaria, and Malta, has asked the EU to consider an different approach for financing Ukraine. This involves common EU debt issuance to secure a loan, backed by unused funds within the European budget. Such a proposal, however, demands full agreement among all 27 member states. The Hungarian government, viewed as friendly with the Kremlin, has already expressed its objection. Speaking on Monday, the EU foreign policy chief, a senior official, said the reparations loan as "the strongest option" for aiding Ukraine. "The reparations loan is based on the Russian frozen assets, meaning it doesn't come from our public funds, which is equally important," she remarked. "It also delivers a clear signal that if you do all this damage to another country, you have to pay for the reparations."