Russia's monetary authority has declared it is seeking damages totaling $230 billion from the financial institution Euroclear. This move is a clear response from the Kremlin regarding plans to use immobilized Russian sovereign assets to aid Ukraine.
According to accounts in local news outlets, the central bank initiated a lawsuit last week for roughly 18 trillion roubles. This amount is equivalent to the aforementioned $230 billion claim.
EU leaders are set to determine later this week on a plan to use approximately €210 billion in frozen Russian assets. This scheme involves providing Ukraine with a large loan to finance its military and financial stability.
The vast majority of these assets, amounting to €185 billion, reside at the Euroclear clearing house in Brussels. This institution serves as the main keeper for the Russian frozen financial reserves.
European Union authorities have maintained that their plan is on solid legal ground. They argue is based on the fact that title of the sovereign wealth still belongs to Russia, despite being it was frozen in European jurisdictions following the full-scale military offensive of Ukraine.
Moscow, however, has labeled any utilization of the assets as theft. Authorities have warned of reciprocal actions, such as seizing European corporate holdings within Russia.
The head of Russia's sovereign wealth fund, who has taken on a prominent position in diplomatic talks, wrote on X that Russia "will win in court" and regain its assets. He added that the European Union, the common currency, and Euroclear "will face consequences" from the proposal.
With statements interpreted as an attempt to create division between Europe and the United States, the official characterized the proposal as "a severe assault on property rights and the international reserves system created by the United States."
Euroclear refused to provide a statement on the latest legal action. The institution has previously noted it is contending with over 100 lawsuits in Russian jurisdictions.
While courts in European nations are unlikely to enforce rulings from Russian courts, experts expect Moscow to pursue implementation in nations with stronger relations to the Kremlin.
"Russian monetary authorities could try to enforce a Russian legal ruling against Euroclear in countries such as China, Hong Kong, the UAE, Kazakhstan, and other sympathetic nations, provided that such holdings can be identified," stated a legal expert from an international firm.
EU officials indicated they are working on measures to deter other countries from aiding any Russian lawsuits against EU entities. Additionally, they are designing protections to shield EU member states with assets in Russia from what they call "unlawful expropriation."
According to the detailed scheme, the EU would provide an first €90 billion loan to Ukraine, using the proceeds earned from the frozen assets at Euroclear. Critically, Russia's ownership claim on the principal funds would remain unaffected.
Ukraine would only be required to return the loan if and when Russia agreed to pay compensation for the immense damage inflicted during the ongoing war.
Belgium, backed by Italy, Bulgaria, and Malta, has urged the EU to consider an alternative approach for financing Ukraine. This involves common EU debt issuance to secure a loan, using unallocated funds within the EU budget.
Such a proposal, however, demands full agreement among all 27 EU countries. The Hungarian government, viewed as aligned with the Kremlin, has already signaled its opposition.
Commenting on Monday, the EU top diplomat, a senior official, said the reparations loan as "the strongest option" for supporting Ukraine. "The reparations loan is based on the Russian immobilized funds, which means it is not drawn from our taxpayers' money, which is also significant," she remarked. "It also sends a clear message that if you cause all this destruction to another nation, you have to pay for the rebuilding."
Elena Hartwell is a multidisciplinary artist and educator passionate about fostering creative communities in London.