🔗 Share this article Moscow Demands Significant Amount in Damages from Euroclear Regarding Seized Assets Russia's monetary authority has declared it is pursuing compensation valued at $230 billion from the securities depository Euroclear. This action represents a direct warning from the Kremlin against plans to use frozen Russian state funds to support Ukraine. The Financial Lawsuit According to reports in Russian news outlets, the central bank filed a claim last week for approximately 18 trillion roubles. This figure corresponds to the aforementioned $230 billion demand. EU leaders are set to determine in the coming days regarding a plan to leverage approximately €210 billion in immobilized Russian state funds. The proposal entails granting Ukraine with a large loan to fund its military and financial stability. Most of these assets, amounting to €185 billion, are held at the Euroclear clearing house in Brussels. Euroclear acts as the main custodian for the Kremlin's immobilised financial reserves. A Clash Over Legality European Union officials have maintained that their plan is on solid legal ground. Their position is based on the fact that title of the state assets still belongs to Russia, despite being it was immobilized in European jurisdictions following the 2022 military offensive of Ukraine. The Russian government, however, has called any utilization of the assets as theft. It has warned of retaliatory measures, including confiscating European corporate assets within Russia. Kirill Dmitriev, who has assumed a prominent role in diplomatic talks, stated on a social media platform that Russia "will win in court" and retrieve its funds. He added that the EU, the common currency, and Euroclear "will face consequences" from the proposal. Geopolitical Maneuvering In comments interpreted as an effort to create division between Europe and the United States, the official characterized the proposal as "a vicious assault on property rights and the global financial system established by the United States." Euroclear declined to provide a statement on the new legal action. The institution has previously stated it is facing over 100 lawsuits in Russian jurisdictions. Enforcement Challenges Although judges in EU countries are not expected to recognize rulings from Russian tribunals, experts expect Moscow to pursue enforcement in countries with closer ties to the Kremlin. "Russian monetary authorities could try to enforce a Russian legal ruling against Euroclear in jurisdictions like China, Hong Kong, the UAE, Kazakhstan, and other friendly states, provided that such assets can be located," commented a lawyer from an NSP law firm. European Safeguards EU officials indicated they are working on measures to discourage other nations from assisting any Russian legal action against EU entities. They are also crafting protections to protect EU member states with assets in Russia from what they call "unlawful expropriation." How the Funding Would Work According to the complex plan, the EU would issue an first €90 billion loan to Ukraine, backed by the proceeds generated from the immobilized assets at Euroclear. Importantly, Russia's legal claim on the underlying funds would stay unaffected. Ukraine would only be obligated to repay the money in the event that Russia agreed to pay compensation for the immense damage inflicted during the ongoing war. Alternative Proposals Belgium, backed by Italy, Bulgaria, and Malta, has asked the EU to examine an different approach for financing Ukraine. This entails common EU borrowing to fund a loan, using unused funds within the EU budget. This alternative move, nevertheless, requires unanimity among all 27 member states. Hungary's government, considered aligned with the Kremlin, has already signaled its objection. Commenting on Monday, the EU top diplomat, Kaja Kallas, described the proposed loan scheme as "the most credible option" for supporting Ukraine. "This mechanism is secured against the Russian frozen assets, which means it doesn't come from our taxpayers' money, which is equally important," she remarked. "It also delivers a clear message that when you cause all this destruction to another nation, you must pay for the reparations."