🔗 Share this article Russia Seeks Staggering Amount in Compensation against Euroclear over Seized Funds The Russian central bank has declared it is claiming damages totaling $230 billion from the securities depository Euroclear. This legal step constitutes a clear warning from the Kremlin regarding proposals to use immobilized Russian state funds to support Ukraine. The Legal Claim According to accounts in local news outlets, the monetary authority initiated a lawsuit last week for roughly 18 trillion roubles. This amount is equivalent to the aforementioned $230 billion demand. European Union officials will decide in the coming days regarding a proposal to leverage around €210 billion in frozen Russian state funds. This scheme involves providing Ukraine with a substantial loan to fund its defence and economic needs. The vast majority of these assets, amounting to €185 billion, are stored at the Euroclear depository in Brussels. This institution serves as the primary custodian for the Russian frozen sovereign wealth. Divergent Legal Views EU officials have argued that their plan is legally sound. Their position is based on the principle that title of the state assets still belongs to Russia, even though it was frozen in EU countries shortly after the 2022 military offensive of Ukraine. The Russian government, in contrast, has labeled any utilization of the assets as theft. Authorities have threatened reciprocal measures, such as seizing European private investors' assets within Russia. The head of Russia's sovereign wealth fund, a figure who has taken on a key position in peace negotiations, wrote on a social media platform that Russia "will prevail in court" and regain its assets. He added that the EU, the common currency, and Euroclear "will suffer" from the plan. Strategic Positioning In comments interpreted as an effort to create division between Europe and the United States, the official described the proposal as "a severe assault on the right to ownership and the global financial system created by the United States." Euroclear refused to comment on the new lawsuit. The institution has previously noted it is contending with more than 100 lawsuits in Russian courts. Enforcement Challenges While courts in EU countries are unlikely to enforce rulings from Russian tribunals, experts anticipate Moscow to pursue enforcement in nations with closer ties to the Kremlin. "The Bank of Russia could try to enforce a Russian legal ruling against Euroclear in jurisdictions like China, Hong Kong, the UAE, Kazakhstan, and other friendly nations, if such assets can be identified," stated a legal expert from an NSP law firm. European Safeguards European authorities said they are developing measures to deter other countries from aiding any Russian lawsuits against European companies. Additionally, they are designing safeguards to protect EU member states with investments in Russia from what they call "illegal expropriation." The Proposed Loan Mechanism According to the detailed plan, the EU would provide an first €90 billion loan to Ukraine, backed by the cash earned from the immobilized assets at Euroclear. Critically, Russia's legal claim on the principal funds would stay untouched. Ukraine would solely be required to repay the loan if and when Russia consented to pay compensation for the immense damage caused during the nearly four-year conflict. Alternative Proposals The Belgian government, backed by Italy, Bulgaria, and Malta, has urged the EU to consider an alternative method for financing Ukraine. This involves common EU debt issuance to fund a loan, backed by unused funds within the EU budget. Such a proposal, nevertheless, demands unanimity among all 27 member states. The Hungarian government, viewed as aligned with the Kremlin, has previously signaled its objection. Commenting on Monday, the EU foreign policy chief, a senior official, said the proposed loan scheme as "the most credible solution" for aiding Ukraine. "This mechanism is secured against the Russian frozen assets, meaning it doesn't come from our taxpayers' money, which is also important," she remarked. "It also sends a powerful message that if you do all this damage to another nation, you must pay for the rebuilding."