🔗 Share this article Russia Seeks Staggering Sum in Damages against Euroclear over Frozen Funds The Russian central bank has stated it is seeking compensation valued at $230 billion against the securities depository Euroclear. This legal step is a clear warning by the Kremlin regarding proposals to use frozen Russian state funds to aid Ukraine. The Legal Claim Based on reports in Russian news outlets, the central bank filed a claim last week for roughly 18 trillion roubles. This amount is equivalent to the stated $230 billion claim. European Union officials are set to decide later this week regarding a proposal to leverage around €210 billion in immobilized Russian assets. The proposal involves granting Ukraine with a large loan to fund its defence and financial needs. The vast majority of these funds, totaling €185 billion, are stored at the Euroclear clearing house in Brussels. Euroclear acts as the primary keeper for the Russian immobilised financial reserves. A Clash Over Legality EU officials have argued that their plan is on solid legal ground. Their position rests on the fact that ownership of the state assets remains with Russia, despite being it was immobilized in EU jurisdictions shortly after the full-scale military offensive of Ukraine. The Russian government, however, has called any utilization of the assets as illegal appropriation. Authorities have threatened reciprocal measures, including confiscating EU private investors' holdings within Russia. Kirill Dmitriev, a figure who has assumed a prominent role in diplomatic talks, wrote on a social media platform that Russia "will win in court" and regain its assets. He warned that the European Union, the euro, and Euroclear "will suffer" from the proposal. Wider Implications With statements seen as an effort to drive a wedge between Europe and the United States, the official described the assets plan as "a vicious attack on the right to ownership and the international reserves system established by the United States." The clearing house declined to provide a statement on the latest lawsuit. The institution has in the past noted it is contending with over 100 legal cases in Russian courts. Enforcement Challenges Although judges in EU countries are unlikely to enforce rulings from Russian courts, experts anticipate Moscow to seek implementation in countries with closer ties to the Kremlin. "Russian monetary authorities could try to implement a Russian court's decision against Euroclear in countries such as China, Hong Kong, the UAE, Kazakhstan, and other sympathetic nations, if relevant assets can be identified," commented a lawyer from an NSP law firm. EU Countermeasures European authorities said they are working on steps to discourage other nations from assisting any Russian legal action against EU companies. They are also crafting protections to shield EU member states with assets in Russia from what they call "unlawful expropriation." How the Funding Would Work According to the detailed plan, the EU would issue an first €90 billion loan to Ukraine, using the cash earned from the frozen assets at Euroclear. Critically, Russia's ownership claim on the underlying funds would stay untouched. Ukraine would solely be obligated to repay the loan in the event that Russia agreed to pay compensation for the immense destruction inflicted during the ongoing war. Other Funding Ideas Belgium, backed by Italy, Bulgaria, and Malta, has urged the EU to examine an different method for funding Ukraine. This involves common EU debt issuance to secure a loan, using unused funds within the EU budget. Such a proposal, nevertheless, requires unanimity among all 27 EU countries. 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 strongest solution" for aiding Ukraine. "The reparations loan is based on the Russian frozen assets, meaning it is not drawn from our taxpayers' money, which is also important," she stated. "It also delivers a clear signal that if you do all this destruction to another nation, you must pay for the rebuilding."