🔗 Share this article Moscow Demands Substantial Amount in Compensation against Clearing House over Seized Assets The Russian central bank has declared it is claiming damages totaling $230 billion against the securities depository Euroclear. This move represents a clear warning from the Kremlin regarding proposals to use frozen Russian state assets to support Ukraine. The Financial Lawsuit Based on accounts in local news outlets, the monetary authority filed a lawsuit last week for roughly 18 trillion roubles. This sum corresponds to the aforementioned $230 billion claim. European Union officials will determine in the coming days on a plan to use around €210 billion in frozen Russian assets. This scheme involves granting Ukraine with a large loan to fund its defence and economic stability. Most of these funds, amounting to €185 billion, are held at the Euroclear clearing house in Brussels. Euroclear serves as the main keeper for the Kremlin's frozen sovereign wealth. Divergent Legal Views European Union officials have argued that their plan is legally sound. They argue is based on the principle that title of the state assets still belongs to Russia, despite being it was immobilized in EU jurisdictions following the 2022 military offensive of Ukraine. The Russian government, however, has labeled any utilization of the funds as theft. Authorities have warned of retaliatory measures, such as confiscating European corporate holdings within Russia. The head of Russia's sovereign wealth fund, 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 EU, the euro, and Euroclear "will face consequences" from the proposal. Strategic Positioning With statements interpreted as an effort to create division between Europe and the United States, Dmitriev described the assets plan as "a severe assault on the right to ownership and the international reserves system established by the United States." The clearing house refused to provide a statement on the new legal action. It has in the past stated it is contending with over 100 legal cases in Russian jurisdictions. Enforcement Challenges While judges in EU countries are unlikely to enforce rulings from Russian courts, analysts expect Moscow to pursue implementation in countries with closer 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 friendly states, if relevant holdings can be located," stated a legal expert 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 protect EU countries with assets in Russia from what they call "unlawful expropriation." How the Funding Would Work Under the detailed scheme, the EU would issue an first €90 billion loan to Ukraine, using the cash generated from the frozen assets at Euroclear. Importantly, Russia's ownership claim on the principal funds would remain unaffected. Kyiv would only be required 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, supported by Italy, Bulgaria, and Malta, has asked the EU to examine an alternative method for funding Ukraine. This entails joint EU borrowing to fund a loan, using unused funds within the EU budget. Such a proposal, nevertheless, demands unanimity among all 27 EU countries. The Hungarian government, viewed as aligned with the Kremlin, has previously signaled its opposition. Commenting on Monday, the EU top diplomat, Kaja Kallas, said the proposed loan scheme as "the strongest option" for aiding Ukraine. "This mechanism is secured against the Russian immobilized funds, meaning it is not drawn from our taxpayers' money, which is also important," she remarked. "Furthermore, it sends a clear message that when you do all this destruction to another country, you have to pay for the reparations."