🔗 Share this article Moscow Demands Substantial Amount in Damages from Clearing House over Frozen Assets The Russian central bank has declared it is pursuing damages valued at $230 billion from the securities depository Euroclear. This legal step is a clear warning from the Kremlin regarding plans to utilize immobilized Russian state assets to support Ukraine. The Substantial Demand Based on reports in Russian news outlets, the central bank filed a claim last week for approximately 18 trillion roubles. This amount corresponds to the stated $230 billion claim. EU leaders will decide later this week regarding a plan to leverage around €210 billion in immobilized Russian assets. The proposal entails granting Ukraine with a large loan to fund its military and economic needs. Most of these funds, totaling €185 billion, reside at the Euroclear depository in Brussels. This institution acts as the primary keeper for the Kremlin's immobilised sovereign wealth. Divergent Legal Views EU officials have maintained that their proposal is legally sound. Their position is based on the principle that ownership of the state assets remains with Russia, even though it was frozen in European countries shortly after the 2022 invasion of Ukraine. Moscow, in contrast, has labeled any use of the assets as illegal appropriation. It has warned of reciprocal measures, such as 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 X that Russia "will win in court" and retrieve its assets. He warned that the EU, the common currency, and Euroclear "will face consequences" from the plan. Geopolitical Maneuvering In comments seen as an effort to create division between Europe and the United States, the official characterized the assets plan as "a severe assault on the right to ownership and the global financial system established by the United States." Euroclear refused to comment on the latest legal action. It has previously noted it is facing more than 100 lawsuits in Russian courts. Legal Hurdles Ahead While courts in EU countries are not expected to enforce rulings from Russian courts, analysts anticipate Moscow to pursue enforcement 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, 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 deter other nations from assisting any Russian legal action against EU entities. Additionally, they are crafting protections to protect EU countries with investments in Russia from what they call "unlawful expropriation." How the Funding Would Work Under the detailed scheme, the EU would provide an first €90 billion loan to Ukraine, using the cash earned from the frozen assets at Euroclear. Critically, Russia's legal claim on the principal funds would stay untouched. Ukraine would only be obligated to return the money if and when Russia consented to pay reparations for the immense destruction caused during the ongoing war. Alternative Proposals The Belgian government, supported by Italy, Bulgaria, and Malta, has urged the EU to examine an alternative method for financing Ukraine. This involves common EU debt issuance to fund a loan, backed by unallocated funds within the European budget. Such a proposal, however, demands unanimity among all 27 member states. Hungary's government, viewed as friendly with the Kremlin, has previously expressed its objection. 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 immobilized funds, which means it is not drawn from our taxpayers' money, which is equally important," she remarked. "It also delivers a clear message that when you do all this destruction to another nation, you have to pay for the reparations."