🔗 Share this article Moscow Demands Substantial Amount in Damages against Clearing House over Seized Funds The Russian central bank has announced it is claiming compensation valued at $230 billion from the financial institution Euroclear. This move constitutes a clear warning by the Kremlin regarding proposals to use frozen Russian sovereign assets to aid Ukraine. The Financial Lawsuit According to accounts in local state media, the central bank filed a lawsuit last week for approximately 18 trillion roubles. This figure corresponds to the aforementioned $230 billion demand. EU leaders are set to determine in the coming days on a proposal to use around €210 billion in immobilized Russian state funds. This scheme entails providing Ukraine with a large loan to finance its military and economic stability. Most of these funds, totaling €185 billion, are stored at the Euroclear clearing house in Brussels. This institution acts as the main custodian for the Kremlin's immobilised financial reserves. Dispute on Ownership EU officials have argued that their plan is on solid legal ground. Their position is based on the fact that ownership of the sovereign wealth remains with Russia, despite being it was frozen in European countries shortly after the full-scale invasion of Ukraine. The Russian government, however, has called any use of the assets as illegal appropriation. Authorities have threatened reciprocal measures, including confiscating European private investors' holdings within Russia. The head of Russia's sovereign wealth fund, a figure who has taken on a prominent position in diplomatic talks, wrote on a social media platform that Russia "will prevail in court" and regain its funds. He warned that the EU, the euro, and Euroclear "will face consequences" from the plan. Strategic Positioning With statements interpreted as an attempt to create division between Europe and the United States, the official described the proposal as "a vicious assault on property rights and the international reserves system established by the United States." Euroclear declined to comment on the new lawsuit. It has previously stated it is contending with over 100 lawsuits in Russian courts. Legal Hurdles Ahead While judges in European nations are unlikely to recognize judgments from Russian courts, experts expect Moscow to pursue enforcement in countries with stronger 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 friendly states, provided that relevant holdings can be located," stated a lawyer from an NSP law firm. European Safeguards European authorities indicated they are developing steps to deter other countries from assisting any Russian legal action against EU entities. Additionally, they are designing protections to protect EU member states with assets in Russia from what they term "illegal expropriation." How the Funding Would Work According to the detailed plan, the EU would provide an initial €90 billion loan to Ukraine, backed by the proceeds generated from the frozen assets at Euroclear. Critically, Russia's ownership claim on the underlying funds would stay untouched. Kyiv would solely be obligated to repay the money if and when Russia consented to pay compensation for the immense destruction caused during the nearly four-year war. Alternative Proposals The Belgian government, backed by Italy, Bulgaria, and Malta, has urged the EU to examine an alternative method for funding Ukraine. This entails common EU borrowing to secure a loan, using unallocated funds within the EU budget. This alternative move, nevertheless, requires unanimity among all 27 EU countries. Hungary's government, considered aligned with the Kremlin, has already signaled its objection. Commenting on Monday, the EU foreign policy chief, a senior official, described the proposed loan scheme as "the most credible solution" for aiding Ukraine. "This mechanism is secured against the Russian frozen assets, which means it doesn't come from our public funds, which is also significant," she remarked. "It also sends a clear message that if you cause all this damage to another country, you have to pay for the rebuilding."