🔗 Share this article Moscow Demands Substantial Amount in Compensation against Clearing House over Frozen Funds The Russian central bank has declared it is seeking damages amounting to $230 billion from the securities depository Euroclear. This legal step constitutes a clear response by the Kremlin regarding plans to use frozen Russian state assets to aid Ukraine. The Financial Lawsuit Based on reports in Russian news outlets, the monetary authority initiated a claim last week for approximately 18 trillion roubles. This sum is equivalent to the stated $230 billion claim. European Union officials will decide in the coming days on a proposal to use around €210 billion in immobilized Russian assets. This scheme entails granting Ukraine with a substantial loan to finance its defence and economic needs. The vast majority of these assets, amounting to €185 billion, are stored at the Euroclear depository in Brussels. This institution acts as the main keeper for the Russian frozen financial reserves. A Clash Over Legality European Union authorities have argued that their proposal is legally sound. Their position is based on the fact that ownership of the sovereign wealth still belongs to Russia, even though it was frozen in EU jurisdictions shortly after the 2022 invasion of Ukraine. The Russian government, however, has called any use of the funds as theft. It has warned of reciprocal measures, such as seizing European corporate holdings within Russia. Kirill Dmitriev, who has taken on a prominent role in peace negotiations, wrote on X that Russia "will win in court" and regain its funds. He added that the European Union, the common currency, and Euroclear "will suffer" from the plan. Geopolitical Maneuvering With statements seen as an effort to drive a wedge between Europe and the United States, the official characterized the assets plan as "a vicious attack on the right to ownership and the international reserves system created by the United States." The clearing house refused to provide a statement on the latest lawsuit. The institution has previously stated it is contending with over 100 lawsuits in Russian courts. Legal Hurdles Ahead While courts in EU countries are not expected to recognize judgments from Russian courts, experts anticipate Moscow to seek implementation in countries with stronger ties 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 friendly nations, provided that relevant assets can be identified," stated a legal expert from an international firm. EU Countermeasures European authorities said they are developing measures to deter other nations from aiding any Russian legal action against EU entities. Additionally, they are crafting safeguards to protect EU member states with assets in Russia from what they term "unlawful expropriation." The Proposed Loan Mechanism Under the detailed plan, the EU would provide an initial €90 billion loan to Ukraine, backed by the proceeds generated from the immobilized assets at Euroclear. Critically, Russia's legal claim on the underlying funds would remain unaffected. Kyiv would solely be obligated to return the loan in the event that Russia agreed to pay compensation for the vast damage caused during the nearly four-year war. Alternative Proposals Belgium, supported by Italy, Bulgaria, and Malta, has urged the EU to examine an different approach for financing Ukraine. This involves joint EU debt issuance to fund a loan, backed by unused funds within the EU budget. This alternative move, however, demands full agreement among all 27 member states. The Hungarian government, viewed as friendly with the Kremlin, has already signaled its objection. Commenting on Monday, the EU foreign policy chief, Kaja Kallas, said the reparations loan as "the most credible solution" for supporting Ukraine. "This mechanism is secured against the Russian immobilized funds, which means it is not drawn from our public funds, which is equally important," she remarked. "Furthermore, it sends a clear message that when you cause all this destruction to another country, you have to pay for the reparations."