🔗 Share this article Moscow Demands Substantial Amount in Compensation against Clearing House over Seized Assets The Russian central bank has announced it is pursuing compensation amounting to $230 billion from the financial institution Euroclear. This legal step constitutes a clear warning from the Kremlin regarding proposals to use frozen Russian sovereign funds to support Ukraine. The Legal Claim According to accounts in Russian news outlets, the central bank initiated a claim last week for approximately 18 trillion roubles. This amount is equivalent to the aforementioned $230 billion claim. EU leaders are set to decide later this week regarding a plan to use approximately €210 billion in immobilized Russian state funds. The proposal involves providing Ukraine with a substantial loan to fund its defence and economic needs. The vast majority of these assets, totaling €185 billion, are held at the Euroclear depository in Brussels. This institution acts as the main keeper for the Russian frozen sovereign wealth. Dispute on Ownership European Union officials have maintained that their plan is on solid legal ground. Their position rests on the principle that title of the sovereign wealth still belongs to Russia, despite being it was frozen in European jurisdictions shortly after the full-scale military offensive of Ukraine. Moscow, however, has labeled any utilization of the funds as theft. Authorities have warned of retaliatory actions, including seizing EU corporate assets within Russia. The head of Russia's sovereign wealth fund, a figure who has assumed a key role in peace negotiations, stated on a social media platform that Russia "will prevail in court" and regain its assets. He warned that the EU, the euro, and Euroclear "will suffer" from the proposal. Wider Implications In comments interpreted as an effort to create division between Europe and the United States, the official characterized the assets plan as "a severe assault on property rights and the global financial system created by the United States." Euroclear refused to provide a statement on the new legal action. It has previously noted it is contending with over 100 lawsuits in Russian courts. Legal Hurdles Ahead Although courts in European nations are not expected to enforce rulings from Russian tribunals, experts expect Moscow to seek implementation in nations with stronger ties to the Kremlin. "The Bank of Russia could try to implement a Russian legal ruling against Euroclear in countries such as China, Hong Kong, the UAE, Kazakhstan, and other friendly nations, if such assets can be located," stated a lawyer from an NSP law firm. EU Countermeasures EU officials indicated they are developing measures to deter other countries from assisting any Russian lawsuits against EU companies. Additionally, they are designing safeguards to protect EU member states with investments in Russia from what they call "illegal expropriation." The Proposed Loan Mechanism Under the detailed plan, the EU would issue an first €90 billion loan to Ukraine, using the cash earned from the immobilized assets at Euroclear. Critically, Russia's ownership claim on the underlying funds would stay untouched. Kyiv would solely be required to return the money if and when Russia agreed to pay compensation for the immense destruction inflicted during the nearly four-year war. Other Funding Ideas The Belgian government, backed by Italy, Bulgaria, and Malta, has urged the EU to consider an alternative method for financing Ukraine. This involves common EU debt issuance to fund a loan, backed by unused funds within the EU budget. This alternative move, nevertheless, requires full agreement among all 27 EU countries. The Hungarian government, viewed as friendly with the Kremlin, has previously signaled its objection. Speaking on Monday, the EU top diplomat, a senior official, described the proposed loan scheme as "the strongest solution" for supporting Ukraine. "This mechanism is based on the Russian frozen assets, meaning it doesn't come from our taxpayers' money, which is equally significant," she stated. "It also sends a clear message that when you do all this destruction to another nation, you have to pay for the rebuilding."