🔗 Share this article Russia Seeks Substantial Amount in Damages against Euroclear over Frozen Funds Russia's monetary authority has announced it is pursuing compensation amounting to $230 billion against the securities depository Euroclear. This legal step represents a direct warning from the Kremlin regarding plans to utilize frozen Russian sovereign assets to support Ukraine. The Legal Claim Based on accounts in local state media, the monetary authority initiated a lawsuit last week for roughly 18 trillion roubles. This sum is equivalent to the aforementioned $230 billion claim. EU leaders are set to determine in the coming days on a plan to use approximately €210 billion in immobilized Russian state funds. The proposal entails providing Ukraine with a substantial loan to finance its defence and economic needs. Most of these assets, amounting to €185 billion, are held at the Euroclear depository in Brussels. This institution serves as the main keeper for the Russian frozen sovereign wealth. A Clash Over Legality European Union officials have argued that their plan is legally sound. Their position is based on the fact that title of the state assets remains with Russia, even though it was frozen in EU jurisdictions following the full-scale invasion of Ukraine. The Russian government, in contrast, has labeled any use of the funds as theft. Authorities have threatened reciprocal measures, including confiscating EU corporate assets within Russia. Kirill Dmitriev, who has taken on a prominent role in diplomatic talks, stated on X that Russia "will win in court" and retrieve its funds. He added that the European Union, the common currency, and Euroclear "will suffer" from the plan. Geopolitical Maneuvering In comments seen as an attempt to create division between Europe and the United States, the official described the assets plan as "a severe attack on the right to ownership and the international reserves system created by the United States." Euroclear declined to provide a statement on the latest legal action. It has in the past stated it is contending with over 100 lawsuits in Russian courts. Enforcement Challenges Although judges in European nations are unlikely to enforce rulings from Russian courts, experts anticipate Moscow to pursue enforcement in countries with closer ties 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 states, if relevant assets can be located," stated a legal expert from an NSP law firm. EU Countermeasures EU officials indicated they are working on measures to deter other nations from assisting any Russian legal action against EU companies. Additionally, they are designing safeguards to protect EU member states with investments in Russia from what they term "unlawful expropriation." How the Funding Would Work According to the complex scheme, the EU would issue an initial €90 billion loan to Ukraine, backed by the proceeds earned from the frozen assets at Euroclear. Critically, Russia's ownership claim on the underlying funds would stay untouched. Ukraine would only be required to repay the money in the event that Russia agreed to pay compensation for the vast damage inflicted during the nearly four-year war. Other Funding Ideas The Belgian government, backed by Italy, Bulgaria, and Malta, has asked the EU to examine an alternative approach for financing Ukraine. This entails joint EU borrowing to secure a loan, backed by unallocated funds within the European budget. Such a proposal, nevertheless, demands full agreement among all 27 EU countries. The Hungarian government, viewed as friendly with the Kremlin, has already expressed its objection. Commenting on Monday, the EU top diplomat, a senior official, said the proposed loan scheme as "the strongest solution" for supporting Ukraine. "The reparations loan is based on the Russian frozen assets, which means it is not drawn from our taxpayers' money, which is equally important," she stated. "It also delivers a powerful message that if you cause all this damage to another country, you must pay for the rebuilding."