🔗 Share this article Russia Seeks Substantial Sum in Compensation against Euroclear over Seized Funds Russia's monetary authority has announced it is claiming damages valued at $230 billion from the securities depository Euroclear. This legal step is a clear response from the Kremlin regarding plans to utilize immobilized Russian sovereign assets to support Ukraine. The Substantial Demand According to reports in local news outlets, the central bank initiated a claim last week for an estimated 18 trillion roubles. This amount corresponds to the stated $230 billion demand. EU leaders will decide in the coming days on a plan to use approximately €210 billion in immobilized Russian state funds. This scheme involves granting Ukraine with a large loan to fund its military and economic needs. Most of these assets, amounting to €185 billion, are stored at the Euroclear depository in Brussels. Euroclear acts as the main keeper for the Kremlin's immobilised sovereign wealth. A Clash Over Legality EU officials have argued that their plan is on solid legal ground. Their position is based on the principle that ownership of the sovereign wealth remains with Russia, despite being it was immobilized in European jurisdictions shortly after the 2022 military offensive of Ukraine. Moscow, in contrast, has labeled any use of the assets as illegal appropriation. It has threatened reciprocal measures, such as seizing European private investors' assets within Russia. Kirill Dmitriev, who has assumed a key position in diplomatic talks, wrote on a social media platform that Russia "will prevail in court" and retrieve its assets. He added that the EU, the common currency, and Euroclear "will face consequences" from the plan. Geopolitical Maneuvering In comments seen as an effort to create division between Europe and the United States, Dmitriev characterized the proposal as "a severe assault on the right to ownership and the global financial system created by the United States." Euroclear refused to provide a statement on the latest lawsuit. The institution has previously stated it is facing over 100 lawsuits in Russian jurisdictions. Enforcement Challenges Although courts in EU countries are not expected to recognize judgments from Russian courts, experts anticipate Moscow to seek enforcement in countries with closer relations to the Kremlin. "The Bank of Russia could try to implement a Russian legal ruling against Euroclear in jurisdictions like China, Hong Kong, the UAE, Kazakhstan, and other sympathetic states, provided that such assets can be identified," stated a legal expert from an international firm. European Safeguards EU officials indicated they are working on steps to deter other countries from aiding any Russian legal action against European entities. Additionally, they are crafting protections to shield 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 first €90 billion loan to Ukraine, backed by the proceeds generated from the frozen assets at Euroclear. Importantly, Russia's ownership claim on the principal funds would remain unaffected. Ukraine would solely be obligated to repay the loan in the event that Russia consented to pay compensation for the immense destruction inflicted during the nearly four-year war. Other Funding Ideas 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 fund a loan, using unused funds within the EU budget. This alternative move, nevertheless, demands full agreement among all 27 EU countries. The Hungarian government, considered aligned with the Kremlin, has previously expressed its objection. Speaking on Monday, the EU foreign policy chief, Kaja Kallas, said the reparations loan as "the most credible option" for supporting Ukraine. "The reparations loan is secured against the Russian immobilized funds, which means it is not drawn from our taxpayers' money, which is equally significant," she remarked. "Furthermore, it sends a powerful signal that if you do all this destruction to another nation, you must pay for the reparations."