🔗 Share this article Russia Seeks Substantial Sum in Damages against Euroclear over Seized Assets Russia's monetary authority has stated it is pursuing damages valued at $230 billion against the securities depository Euroclear. This action constitutes a clear response by the Kremlin regarding plans to use immobilized Russian sovereign assets to support Ukraine. The Substantial Demand According to accounts in Russian state media, the central bank initiated a claim last week for an estimated 18 trillion roubles. This sum is equivalent to the aforementioned $230 billion demand. European Union officials will decide in the coming days on a plan to leverage approximately €210 billion in immobilized Russian assets. This scheme involves providing Ukraine with a large loan to finance its military and financial needs. Most of these assets, amounting to €185 billion, are held at the Euroclear depository in Brussels. This institution acts as the primary custodian for the Russian immobilised financial reserves. A Clash Over Legality EU authorities have argued that their proposal is on solid legal ground. Their position is based on the principle that title of the state assets still belongs to Russia, even though it was frozen in European countries shortly after the 2022 invasion of Ukraine. The Russian government, in contrast, has labeled any use of the assets as theft. It has threatened retaliatory actions, including confiscating European private investors' assets within Russia. Kirill Dmitriev, who has assumed a key position in diplomatic talks, stated on X that Russia "will win in court" and regain its funds. He added that the European Union, the euro, and Euroclear "will face consequences" from the plan. Geopolitical Maneuvering With statements seen as an effort to drive a wedge between Europe and the United States, the official described the proposal as "a vicious attack on the right to ownership and the international reserves system established by the United States." Euroclear declined to provide a statement on the latest lawsuit. The institution has previously noted it is contending with more than 100 legal cases in Russian courts. Enforcement Challenges While courts in EU countries are not expected to recognize rulings from Russian tribunals, analysts expect Moscow to seek implementation in nations with stronger relations to the Kremlin. "The Bank of Russia may attempt to implement a Russian legal ruling against Euroclear in countries such as China, Hong Kong, the UAE, Kazakhstan, and other sympathetic nations, if relevant assets can be located," commented a lawyer from an international firm. EU Countermeasures European authorities indicated they are developing steps to deter other nations from assisting any Russian legal action against European entities. They are also designing protections to protect EU countries with investments in Russia from what they term "unlawful expropriation." The Proposed Loan Mechanism Under the complex scheme, the EU would provide an initial €90 billion loan to Ukraine, using the cash generated from the immobilized assets at Euroclear. Importantly, Russia's ownership claim on the principal funds would remain unaffected. Ukraine would only be obligated to return the loan if and when Russia agreed to pay reparations for the vast destruction inflicted during the nearly four-year war. Other Funding Ideas Belgium, supported by Italy, Bulgaria, and Malta, has urged the EU to examine an different method for funding Ukraine. This involves joint EU borrowing to secure a loan, backed by unallocated funds within the European budget. Such a proposal, nevertheless, requires unanimity among all 27 member states. The Hungarian government, viewed as aligned with the Kremlin, has previously expressed its opposition. Commenting on Monday, the EU top diplomat, a senior official, said the reparations loan as "the most credible solution" for supporting Ukraine. "This mechanism is secured against the Russian frozen assets, meaning it doesn't come from our taxpayers' money, which is equally important," she remarked. "Furthermore, it sends a powerful message that when you cause all this damage to another country, you have to pay for the reparations."