🔗 Share this article Russia Seeks Significant Sum in Damages against Euroclear over Seized Funds The Russian central bank has announced it is seeking compensation totaling $230 billion from the securities depository Euroclear. This action is a clear response by the Kremlin against plans to utilize immobilized Russian state funds to support Ukraine. The Substantial Demand According to reports in Russian news outlets, the monetary authority initiated a lawsuit last week for an estimated 18 trillion roubles. This amount is equivalent to the aforementioned $230 billion demand. EU leaders will decide in the coming days regarding a plan to use approximately €210 billion in immobilized Russian state funds. The proposal entails providing Ukraine with a large loan to finance its military and economic stability. The vast majority of these assets, totaling €185 billion, are held at the Euroclear depository in Brussels. Euroclear serves as the main custodian for the Russian frozen sovereign wealth. Dispute on Ownership European Union authorities have argued that their plan is on solid legal ground. They argue is based on the fact that ownership of the sovereign wealth still belongs to Russia, even though it was immobilized in European countries following the 2022 invasion of Ukraine. Moscow, however, has called any use of the assets as illegal appropriation. Authorities have warned of retaliatory actions, such as seizing EU corporate assets within Russia. Kirill Dmitriev, who has assumed a key role in peace negotiations, wrote on a social media platform that Russia "will win in court" and retrieve its funds. He warned that the European Union, the common currency, and Euroclear "will suffer" from the proposal. Strategic Positioning 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 international reserves system established by the United States." The clearing house refused to comment on the new lawsuit. It has previously stated it is contending with over 100 lawsuits in Russian jurisdictions. Enforcement Challenges Although courts in EU countries are not expected to enforce rulings from Russian courts, experts expect Moscow to seek implementation in nations with stronger ties to the Kremlin. "Russian monetary authorities could try to enforce a Russian court's decision against Euroclear in jurisdictions like China, Hong Kong, the UAE, Kazakhstan, and other sympathetic nations, provided that relevant holdings can be identified," stated a legal expert from an international firm. European Safeguards European authorities indicated they are developing steps to deter other nations from aiding any Russian legal action against European companies. They are also designing protections to shield EU countries with assets in Russia from what they call "unlawful expropriation." How the Funding Would Work According to the detailed scheme, the EU would provide an initial €90 billion loan to Ukraine, using the proceeds earned from the immobilized assets at Euroclear. Critically, Russia's ownership claim on the underlying funds would remain unaffected. Kyiv would solely be required to return the loan if and when Russia agreed to pay compensation for the immense damage inflicted during the ongoing war. Other Funding Ideas Belgium, supported by Italy, Bulgaria, and Malta, has asked the EU to examine an different method for financing Ukraine. This involves common EU debt issuance to secure a loan, backed by unallocated funds within the EU budget. This alternative move, nevertheless, demands full agreement among all 27 EU countries. The Hungarian government, viewed as aligned with the Kremlin, has already expressed its opposition. Commenting on Monday, the EU top diplomat, a senior official, described the proposed loan scheme as "the most credible solution" for supporting Ukraine. "The reparations loan is secured against the Russian frozen assets, which means it is not drawn from our public funds, which is equally significant," she stated. "Furthermore, it sends a powerful message that if you do all this damage to another nation, you must pay for the reparations."