🔗 Share this article Moscow Demands Staggering Sum in Compensation against Euroclear Regarding Frozen Assets Russia's monetary authority has stated it is claiming damages totaling $230 billion from the securities depository Euroclear. This legal step constitutes a clear warning from the Kremlin against proposals to use frozen Russian sovereign assets to aid Ukraine. The Substantial Demand According to reports in Russian news outlets, the central bank filed a lawsuit last week for roughly 18 trillion roubles. This figure is equivalent to the aforementioned $230 billion demand. European Union officials are set to determine in the coming days regarding a proposal to use around €210 billion in immobilized Russian assets. The proposal entails granting Ukraine with a substantial loan to finance its defence and economic stability. Most of these assets, amounting to €185 billion, are held at the Euroclear depository in Brussels. Euroclear serves as the main keeper for the Russian immobilised sovereign wealth. Dispute on Ownership EU officials have maintained that their plan is on solid legal ground. They argue is based on the fact that title of the state assets remains with Russia, despite being it was immobilized in EU jurisdictions following the 2022 military offensive of Ukraine. Moscow, however, has labeled any use of the assets as theft. Authorities have threatened retaliatory measures, such as confiscating EU private investors' assets within Russia. Kirill Dmitriev, who has taken on a prominent role in diplomatic talks, stated on a social media platform that Russia "will win in court" and retrieve its assets. He added that the European Union, the euro, and Euroclear "will suffer" from the proposal. Wider Implications With statements interpreted as an effort to drive a wedge 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 established by the United States." Euroclear refused to comment on the new lawsuit. It has previously stated it is contending with over 100 legal cases in Russian jurisdictions. Enforcement Challenges While judges in EU countries are unlikely to recognize rulings from Russian tribunals, experts anticipate Moscow to pursue enforcement in countries with closer relations to the Kremlin. "Russian monetary authorities may attempt to implement a Russian court's decision against Euroclear in jurisdictions like China, Hong Kong, the UAE, Kazakhstan, and other sympathetic states, provided that such assets can be located," commented a legal expert from an NSP law firm. European Safeguards EU officials said they are working on measures to deter other nations from aiding any Russian legal action against EU entities. Additionally, they are designing safeguards to protect EU countries with investments in Russia from what they term "illegal expropriation." The Proposed Loan Mechanism According to the complex plan, the EU would issue an initial €90 billion loan to Ukraine, backed by the cash earned from the immobilized assets at Euroclear. Critically, Russia's ownership claim on the principal funds would stay untouched. Kyiv would solely be obligated to repay the loan in the event that Russia agreed to pay reparations for the immense damage inflicted during the ongoing conflict. Alternative Proposals Belgium, supported by Italy, Bulgaria, and Malta, has asked the EU to examine an alternative approach for funding Ukraine. This involves common EU borrowing to secure a loan, using unallocated funds within the EU budget. Such a proposal, however, requires unanimity among all 27 member states. The Hungarian government, considered friendly with the Kremlin, has previously expressed its opposition. Speaking on Monday, the EU foreign policy chief, a senior official, described the reparations loan as "the strongest option" for aiding Ukraine. "This mechanism is secured against the Russian frozen assets, which means it is not drawn from our public funds, which is equally important," she remarked. "It also delivers a clear message that if you cause all this destruction to another country, you must pay for the rebuilding."