🔗 Share this article Moscow Demands Significant Sum in Damages from Clearing House over Seized Assets Russia's monetary authority has stated it is claiming compensation valued at $230 billion against the financial institution Euroclear. This move constitutes a direct response by the Kremlin against proposals to utilize frozen Russian sovereign funds to aid Ukraine. The Legal Claim According to reports in Russian news outlets, the central bank filed a lawsuit last week for an estimated 18 trillion roubles. This sum is equivalent to the aforementioned $230 billion demand. EU leaders will decide later this week on a plan to use around €210 billion in immobilized Russian state funds. The proposal involves granting Ukraine with a large loan to fund its defence and economic stability. Most of these assets, totaling €185 billion, reside at the Euroclear clearing house in Brussels. This institution acts as the main custodian for the Russian frozen financial reserves. A Clash Over Legality European Union authorities have argued that their plan is legally sound. They argue is based on the fact that ownership of the state assets remains with Russia, even though it was frozen in European jurisdictions shortly after the full-scale invasion of Ukraine. Moscow, however, has labeled any use of the funds as theft. Authorities have threatened reciprocal measures, including seizing European corporate assets within Russia. The head of Russia's sovereign wealth fund, a figure who has taken on a key role in diplomatic talks, wrote on a social media platform that Russia "will prevail in court" and retrieve its assets. He warned that the EU, the euro, and Euroclear "will suffer" from the proposal. Strategic Positioning With statements seen as an effort to drive a wedge between Europe and the United States, Dmitriev characterized the proposal as "a severe attack on the right to ownership and the global financial system established by the United States." Euroclear declined to comment on the new legal action. It has previously noted it is facing over 100 lawsuits in Russian jurisdictions. Enforcement Challenges Although courts in European nations are unlikely to enforce judgments from Russian tribunals, experts expect Moscow to seek enforcement in nations with stronger relations to the Kremlin. "The Bank of Russia could try to enforce a Russian court's decision against Euroclear in jurisdictions like China, Hong Kong, the UAE, Kazakhstan, and other sympathetic states, provided that relevant holdings can be located," commented a legal expert from an NSP law firm. European Safeguards European authorities indicated they are developing measures to discourage other countries from assisting any Russian legal action against EU companies. Additionally, they are crafting safeguards to protect EU countries with assets in Russia from what they call "unlawful expropriation." The Proposed Loan Mechanism According to the complex plan, the EU would issue an initial €90 billion loan to Ukraine, backed by the proceeds earned from the frozen assets at Euroclear. Importantly, Russia's ownership claim on the principal funds would remain unaffected. Ukraine would only be required to return the loan in the event that Russia consented to pay reparations for the immense damage caused during the ongoing war. Alternative Proposals The Belgian government, backed by Italy, Bulgaria, and Malta, has urged the EU to examine an alternative method for funding Ukraine. This entails common EU borrowing to fund a loan, using unallocated funds within the EU budget. This alternative move, however, requires unanimity among all 27 EU countries. The Hungarian government, viewed as friendly with the Kremlin, has already expressed its objection. Speaking on Monday, the EU foreign policy chief, Kaja Kallas, said the reparations loan as "the strongest solution" for supporting Ukraine. "This mechanism is based on the Russian immobilized funds, which means it doesn't come from our taxpayers' money, which is also important," she stated. "It also delivers a clear message that when you do all this damage to another country, you must pay for the rebuilding."