🔗 Share this article Russia Seeks Substantial Sum in Damages against Clearing House Regarding Frozen Funds The Russian central bank has declared it is pursuing compensation amounting to $230 billion against the securities depository Euroclear. This legal step constitutes a direct warning by the Kremlin regarding plans to utilize frozen Russian sovereign assets to aid Ukraine. The Substantial Demand Based on reports in local news outlets, the monetary authority filed a claim last week for an estimated 18 trillion roubles. This sum corresponds to the aforementioned $230 billion claim. EU leaders are set to determine in the coming days on a plan to use approximately €210 billion in frozen Russian assets. This scheme entails providing Ukraine with a large loan to finance its defence and economic needs. The vast majority of these assets, totaling €185 billion, are held at the Euroclear depository in Brussels. Euroclear acts as the primary keeper for the Russian frozen financial reserves. Dispute on Ownership European Union officials have argued that their plan is legally sound. They argue rests on the fact that ownership of the state assets remains with Russia, despite being it was frozen in EU countries shortly after the 2022 invasion of Ukraine. Moscow, however, has called any utilization of the assets as theft. It has threatened retaliatory measures, including confiscating EU corporate holdings within Russia. The head of Russia's sovereign wealth fund, a figure who has taken on a key role in peace negotiations, stated on X that Russia "will prevail in court" and retrieve its assets. He warned that the European Union, the common currency, and Euroclear "will face consequences" from the plan. Strategic Positioning In comments interpreted as an attempt to drive a wedge between Europe and the United States, the official described the assets plan as "a severe assault on property rights and the international reserves system established by the United States." Euroclear refused to comment on the latest legal action. It has in the past stated it is facing more than 100 legal cases in Russian courts. Legal Hurdles Ahead While judges in EU countries are not expected to recognize judgments from Russian tribunals, experts anticipate Moscow to seek enforcement in nations with closer relations to the Kremlin. "Russian monetary authorities may attempt to enforce a Russian court's decision against Euroclear in countries such as China, Hong Kong, the UAE, Kazakhstan, and other sympathetic states, if such holdings can be identified," stated a legal expert from an NSP law firm. EU Countermeasures EU officials indicated they are developing steps to discourage other nations from assisting any Russian legal action against European entities. Additionally, they are designing safeguards to protect EU member states with investments in Russia from what they term "illegal expropriation." The Proposed Loan Mechanism According to the detailed scheme, the EU would provide an first €90 billion loan to Ukraine, using the proceeds earned from the immobilized assets at Euroclear. Importantly, Russia's legal claim on the underlying funds would remain unaffected. Kyiv would only be obligated to repay the money in the event that Russia consented to pay compensation for the immense destruction inflicted during the ongoing conflict. Other Funding Ideas The Belgian government, supported by Italy, Bulgaria, and Malta, has urged the EU to examine an different method for funding Ukraine. This entails common EU borrowing to secure a loan, using unallocated funds within the EU budget. This alternative move, however, requires full agreement among all 27 EU countries. Hungary's government, viewed as friendly with the Kremlin, has previously expressed its opposition. Speaking on Monday, the EU foreign policy chief, Kaja Kallas, said the proposed loan scheme as "the strongest option" for aiding Ukraine. "The reparations loan is based on the Russian frozen assets, meaning it doesn't come from our taxpayers' money, which is also significant," she stated. "It also sends a clear signal that if you cause all this damage to another nation, you must pay for the reparations."