🔗 Share this article Moscow Demands Substantial Sum in Damages against Euroclear over Frozen Funds Russia's monetary authority has declared it is claiming compensation valued at $230 billion against the securities depository Euroclear. This legal step is a clear warning from the Kremlin against proposals to utilize immobilized Russian sovereign assets to support Ukraine. The Substantial Demand According to reports in Russian state media, the monetary authority filed a claim last week for approximately 18 trillion roubles. This figure corresponds to the aforementioned $230 billion demand. European Union officials will determine later this week on a proposal to use around €210 billion in immobilized Russian assets. The proposal entails providing Ukraine with a large loan to fund its military and economic needs. The vast majority of these assets, amounting to €185 billion, are held at the Euroclear depository in Brussels. This institution acts as the primary keeper for the Kremlin's immobilised sovereign wealth. Divergent Legal Views EU authorities have maintained that their plan is legally sound. They argue is based on the principle that title of the sovereign wealth remains with Russia, even though it was immobilized in EU jurisdictions following the full-scale invasion of Ukraine. Moscow, in contrast, has called any utilization of the assets as theft. It has warned of reciprocal measures, including confiscating European private investors' holdings within Russia. The head of Russia's sovereign wealth fund, a figure who has taken on a key role in diplomatic talks, stated on X that Russia "will win in court" and regain its funds. He added that the EU, the common currency, and Euroclear "will suffer" from the proposal. Wider Implications In comments interpreted as an attempt to create division between Europe and the United States, the official described the proposal as "a severe assault on property rights and the international reserves system created by the United States." The clearing house refused to comment on the latest lawsuit. It has previously stated it is facing more than 100 legal cases in Russian jurisdictions. Legal Hurdles Ahead While judges in European nations are not expected to recognize judgments from Russian tribunals, experts anticipate Moscow to seek enforcement in nations with stronger ties to the Kremlin. "The Bank of Russia may attempt to implement a Russian legal ruling against Euroclear in jurisdictions like China, Hong Kong, the UAE, Kazakhstan, and other friendly states, if such assets can be identified," stated a lawyer from an international firm. EU Countermeasures European authorities said they are developing steps to deter other countries from aiding any Russian lawsuits against EU entities. Additionally, they are crafting protections to protect EU countries with assets in Russia from what they term "illegal expropriation." The Proposed Loan Mechanism Under the detailed scheme, the EU would issue an first €90 billion loan to Ukraine, backed by the proceeds earned from the immobilized assets at Euroclear. Critically, Russia's ownership claim on the underlying funds would stay unaffected. Ukraine would solely be obligated to repay the loan if and when Russia consented to pay compensation for the vast damage caused during the ongoing war. Alternative Proposals Belgium, supported by Italy, Bulgaria, and Malta, has asked the EU to examine an different method for funding Ukraine. This entails joint EU debt issuance to fund a loan, using unallocated funds within the EU budget. Such a proposal, nevertheless, requires full agreement among all 27 EU countries. The Hungarian government, viewed as aligned with the Kremlin, has previously expressed its opposition. Speaking on Monday, the EU foreign policy chief, Kaja Kallas, said the reparations loan as "the strongest option" for supporting Ukraine. "The reparations loan is based on the Russian frozen assets, meaning it is not drawn from our public funds, which is equally significant," she stated. "It also sends a clear signal that when you cause all this damage to another nation, you have to pay for the reparations."