🔗 Share this article Russia Seeks Staggering Sum in Compensation against Euroclear over Seized Funds The Russian central bank has announced it is claiming compensation totaling $230 billion against the securities depository Euroclear. This action represents a direct warning from the Kremlin against plans to use frozen Russian sovereign funds to aid Ukraine. The Legal Claim Based on reports in Russian news outlets, the central bank filed a claim last week for an estimated 18 trillion roubles. This amount corresponds to the stated $230 billion demand. EU leaders will decide later this week regarding a proposal to use approximately €210 billion in immobilized Russian assets. The proposal entails granting Ukraine with a large loan to finance its defence and economic stability. The vast majority of these assets, totaling €185 billion, are stored at the Euroclear clearing house in Brussels. This institution acts as the main keeper for the Kremlin's immobilised sovereign wealth. A Clash Over Legality EU officials have argued that their proposal is on solid legal ground. They argue is based on the principle that ownership of the state assets still belongs to Russia, even though it was immobilized in EU jurisdictions shortly after the 2022 military offensive of Ukraine. The Russian government, in contrast, has labeled any use of the funds as theft. It has threatened reciprocal actions, including seizing European corporate holdings within Russia. The head of Russia's sovereign wealth fund, who has taken on a prominent role in diplomatic talks, wrote on a social media platform that Russia "will prevail in court" and retrieve its funds. He warned that the European Union, the common currency, and Euroclear "will face consequences" from the plan. Geopolitical Maneuvering With statements interpreted as an attempt to create division between Europe and the United States, Dmitriev characterized the proposal as "a vicious assault on property rights and the international reserves system established by the United States." Euroclear declined to provide a statement on the latest legal action. The institution has previously noted it is facing over 100 legal cases in Russian courts. Legal Hurdles Ahead Although judges in European nations are not expected to enforce rulings from Russian courts, experts anticipate Moscow to pursue enforcement in nations with stronger relations 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 sympathetic states, provided that relevant assets can be located," commented a legal expert from an international firm. European Safeguards EU officials said they are working on measures to discourage other countries from assisting any Russian lawsuits against European entities. They are also designing protections to protect EU countries with investments in Russia from what they call "unlawful expropriation." The Proposed Loan Mechanism Under the complex scheme, the EU would issue an initial €90 billion loan to Ukraine, backed by the cash generated from the immobilized assets at Euroclear. Critically, Russia's ownership claim on the principal funds would stay unaffected. Kyiv would only be obligated to return the money in the event that Russia consented to pay reparations for the immense damage caused during the ongoing war. Alternative Proposals Belgium, backed by Italy, Bulgaria, and Malta, has urged the EU to examine an alternative method for financing Ukraine. This entails joint EU debt issuance to secure a loan, using unallocated funds within the EU budget. Such a proposal, however, requires full agreement among all 27 EU countries. Hungary's government, viewed as friendly with the Kremlin, has already signaled its objection. Speaking on Monday, the EU foreign policy chief, a senior official, said the proposed loan scheme as "the most credible solution" for aiding Ukraine. "This mechanism is based on the Russian immobilized funds, meaning it is not drawn from our public funds, which is also important," she remarked. "It also delivers a clear message that when you cause all this destruction to another nation, you have to pay for the reparations."