🔗 Share this article Moscow Demands Substantial Sum in Compensation against Euroclear over Frozen Funds The Russian central bank has announced it is seeking damages valued at $230 billion against the financial institution Euroclear. This move is a clear warning from the Kremlin against proposals to utilize immobilized Russian state assets to aid Ukraine. The Legal Claim Based on reports in local news outlets, the central bank filed a claim last week for an estimated 18 trillion roubles. This figure corresponds to the aforementioned $230 billion demand. European Union officials are set to decide later this week on a plan to use approximately €210 billion in immobilized Russian state funds. This scheme entails providing Ukraine with a substantial loan to finance its military and economic stability. The vast majority of these funds, amounting to €185 billion, are stored at the Euroclear clearing house in Brussels. Euroclear serves as the primary custodian for the Kremlin's frozen sovereign wealth. A Clash Over Legality EU authorities have argued that their proposal is legally sound. Their position is based on the principle that title of the sovereign wealth remains with Russia, despite being it was frozen in European jurisdictions following the full-scale military offensive of Ukraine. Moscow, in contrast, has called any use of the assets as theft. Authorities have threatened reciprocal actions, including seizing European private investors' holdings within Russia. Kirill Dmitriev, a figure who has taken on a prominent position in diplomatic talks, wrote on X that Russia "will win in court" and retrieve its assets. He warned that the European Union, the euro, and Euroclear "will suffer" from the proposal. Geopolitical Maneuvering In comments interpreted as an attempt to drive a wedge between Europe and the United States, the official characterized the assets plan as "a vicious assault on the right to ownership and the global financial system established by the United States." Euroclear refused to provide a statement on the latest lawsuit. The institution has previously noted it is contending with more than 100 lawsuits in Russian courts. Legal Hurdles Ahead Although judges in European nations are unlikely to enforce rulings from Russian courts, analysts expect Moscow to seek implementation in nations with closer ties to the Kremlin. "Russian monetary authorities may attempt to enforce a Russian legal ruling against Euroclear in countries such as China, Hong Kong, the UAE, Kazakhstan, and other friendly states, if such holdings can be identified," commented a lawyer from an international firm. EU Countermeasures EU officials indicated they are working on measures to discourage other nations from aiding any Russian lawsuits against European companies. Additionally, they are designing safeguards to shield EU countries with investments in Russia from what they term "illegal expropriation." The Proposed Loan Mechanism According to the complex plan, the EU would provide an initial €90 billion loan to Ukraine, backed by the cash earned from the immobilized assets at Euroclear. Importantly, Russia's legal claim on the principal funds would stay unaffected. Kyiv would only be obligated to return the money in the event that Russia agreed to pay compensation for the vast destruction caused during the ongoing conflict. Alternative Proposals The Belgian government, supported by Italy, Bulgaria, and Malta, has urged the EU to consider an different method for financing Ukraine. This involves common EU borrowing to secure a loan, backed by unallocated funds within the EU budget. Such a proposal, however, requires full agreement among all 27 member states. The Hungarian government, considered aligned with the Kremlin, has previously expressed its opposition. Speaking on Monday, the EU foreign policy chief, Kaja Kallas, described the proposed loan scheme as "the most credible option" for aiding Ukraine. "This mechanism is based on the Russian frozen assets, meaning it doesn't come from our public funds, which is equally significant," she stated. "It also sends a powerful message that if you cause all this damage to another country, you must pay for the reparations."