🔗 Share this article Russia Seeks Substantial Sum in Damages against Euroclear over Seized Funds The Russian central bank has stated it is claiming damages amounting to $230 billion against the financial institution Euroclear. This action is a direct response from the Kremlin against plans to use frozen Russian sovereign assets to aid Ukraine. The Financial Lawsuit According to reports in Russian state media, the central bank filed a claim last week for roughly 18 trillion roubles. This figure is equivalent to the stated $230 billion demand. EU leaders are set to determine in the coming days on a proposal to use approximately €210 billion in immobilized Russian assets. This scheme involves granting Ukraine with a large loan to fund its defence and economic stability. The vast majority of these funds, amounting to €185 billion, reside at the Euroclear clearing house in Brussels. This institution acts as the main keeper for the Russian immobilised sovereign wealth. Dispute on Ownership European Union officials have argued that their proposal is on solid legal ground. Their position rests on the principle that ownership of the sovereign wealth remains with Russia, even though it was immobilized in European countries following the 2022 military offensive of Ukraine. The Russian government, however, has called any utilization of the funds as illegal appropriation. Authorities have threatened retaliatory measures, including confiscating European private investors' assets within Russia. Kirill Dmitriev, a figure who has taken on a key position in diplomatic talks, stated on X that Russia "will win in court" and retrieve its assets. He added that the European Union, the euro, and Euroclear "will suffer" from the plan. Wider Implications In comments seen as an effort to drive a wedge between Europe and the United States, the official characterized the proposal as "a vicious assault on property rights and the international reserves system established by the United States." The clearing house refused to provide a statement on the new legal action. It has previously noted it is facing over 100 legal cases in Russian courts. Legal Hurdles Ahead Although courts in European nations are unlikely to enforce rulings from Russian courts, analysts expect Moscow to seek implementation in nations with stronger ties to the Kremlin. "Russian monetary authorities may attempt to implement a Russian court's decision against Euroclear in jurisdictions like China, Hong Kong, the UAE, Kazakhstan, and other friendly nations, if such assets can be identified," stated a lawyer from an international firm. EU Countermeasures EU officials said they are working on measures to discourage other nations from assisting any Russian lawsuits against EU companies. Additionally, they are crafting protections to shield EU member states with investments in Russia from what they call "unlawful expropriation." The Proposed Loan Mechanism Under the complex 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 principal funds would stay unaffected. Kyiv would only be obligated to repay the loan in the event that Russia consented to pay reparations for the immense destruction caused during the ongoing conflict. Other Funding Ideas The Belgian government, supported by Italy, Bulgaria, and Malta, has asked the EU to consider an alternative method for funding Ukraine. This entails common EU borrowing to secure a loan, backed by unallocated funds within the European budget. Such a proposal, nevertheless, demands full agreement among all 27 member states. The Hungarian government, considered aligned with the Kremlin, has previously signaled its objection. Speaking on Monday, the EU top diplomat, Kaja Kallas, said the reparations loan as "the most credible solution" for aiding Ukraine. "This mechanism is based on the Russian frozen assets, meaning it is not drawn from our taxpayers' money, which is equally important," she remarked. "Furthermore, it delivers a powerful message that if you cause all this destruction to another country, you must pay for the reparations."