The Russian central bank has announced it is claiming compensation amounting to $230 billion against the securities depository Euroclear. This move represents a direct response by the Kremlin against plans to utilize immobilized Russian sovereign assets to support Ukraine.
According to reports in local state media, the monetary authority filed a lawsuit last week for roughly 18 trillion roubles. This figure corresponds to the stated $230 billion claim.
EU leaders will decide later this week on a proposal to use around €210 billion in immobilized Russian assets. The proposal entails providing Ukraine with a large loan to finance its military and economic stability.
The vast majority of these funds, amounting to €185 billion, are stored at the Euroclear clearing house in Brussels. This institution acts as the primary keeper for the Kremlin's frozen financial reserves.
European Union officials have argued that their proposal is on solid legal ground. They argue rests on the principle that title of the state assets still belongs to Russia, despite being it was immobilized in EU jurisdictions shortly after the 2022 invasion of Ukraine.
The Russian government, however, has labeled any use of the assets as theft. It has threatened reciprocal measures, such as confiscating EU corporate holdings within Russia.
Kirill Dmitriev, a figure who has taken on a key position in peace negotiations, stated on X that Russia "will prevail in court" and retrieve its assets. He added that the EU, the euro, and Euroclear "will face consequences" from the proposal.
In comments interpreted as an effort to drive a wedge between Europe and the United States, Dmitriev characterized the proposal as "a severe attack on property rights and the global financial system created by the United States."
Euroclear refused to provide a statement on the latest lawsuit. It has previously noted it is facing more than 100 legal cases in Russian courts.
While judges in EU countries are unlikely to recognize rulings from Russian tribunals, experts anticipate Moscow to pursue enforcement in nations with closer relations to the Kremlin.
"The Bank of Russia could try to enforce a Russian legal ruling against Euroclear in jurisdictions like China, Hong Kong, the UAE, Kazakhstan, and other sympathetic states, if such assets can be identified," commented a lawyer from an international firm.
European authorities indicated they are working on steps to discourage other countries from assisting any Russian lawsuits against European companies. They are also crafting protections to shield EU member states with investments in Russia from what they call "unlawful expropriation."
Under the complex scheme, the EU would provide an first €90 billion loan to Ukraine, using the cash generated from the immobilized assets at Euroclear. Critically, Russia's legal claim on the principal funds would stay unaffected.
Kyiv would solely be required to repay the money in the event that Russia consented to pay reparations for the immense destruction inflicted during the ongoing conflict.
The Belgian government, backed by Italy, Bulgaria, and Malta, has asked the EU to consider an alternative approach for funding Ukraine. This involves joint EU borrowing to fund a loan, backed by unused funds within the European budget.
Such a proposal, however, demands full agreement among all 27 EU countries. The Hungarian government, considered aligned with the Kremlin, has already signaled its objection.
Commenting on Monday, the EU top diplomat, Kaja Kallas, described the reparations loan as "the strongest option" for aiding Ukraine. "This mechanism is based on the Russian frozen assets, which means it doesn't come from our public funds, which is also significant," she remarked. "Furthermore, it sends a powerful message that if you cause all this damage to another country, you must pay for the rebuilding."
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