🔗 Share this article Russia Seeks Staggering Amount in Compensation against Euroclear Regarding Frozen Funds The Russian central bank has announced it is claiming damages valued at $230 billion against the financial institution Euroclear. This legal step is a clear warning by the Kremlin against proposals to utilize immobilized Russian sovereign funds to support Ukraine. The Legal Claim Based on accounts in Russian state media, the central bank filed a lawsuit last week for roughly 18 trillion roubles. This figure corresponds to the stated $230 billion claim. European Union officials will decide in the coming days on a plan to use around €210 billion in immobilized Russian assets. The proposal involves providing Ukraine with a large loan to finance its military and financial stability. Most of these funds, totaling €185 billion, are stored at the Euroclear depository in Brussels. Euroclear serves as the main keeper for the Russian immobilised sovereign wealth. Divergent Legal Views EU officials have argued that their proposal is legally sound. Their position rests on the fact that title of the state assets still belongs to Russia, despite being it was immobilized in EU countries shortly after the full-scale military offensive of Ukraine. The Russian government, in contrast, has labeled any use of the assets as theft. It has threatened retaliatory measures, including seizing European private investors' holdings within Russia. The head of Russia's sovereign wealth fund, a figure who has assumed a key position in diplomatic talks, wrote on a social media platform that Russia "will prevail in court" and retrieve its funds. He warned that the EU, the common currency, and Euroclear "will suffer" from the proposal. Geopolitical Maneuvering With statements seen as an effort to drive a wedge between Europe and the United States, the official described the assets plan as "a severe assault on property rights and the international reserves system established by the United States." Euroclear declined to provide a statement on the latest lawsuit. It has previously noted it is facing more than 100 lawsuits in Russian courts. Legal Hurdles Ahead Although judges in EU countries are not expected to recognize rulings from Russian courts, analysts expect Moscow to seek enforcement in countries with closer relations to the Kremlin. "Russian monetary authorities could try to implement a Russian legal ruling against Euroclear in jurisdictions like China, Hong Kong, the UAE, Kazakhstan, and other friendly nations, if relevant assets can be identified," commented a lawyer from an NSP law firm. EU Countermeasures EU officials said they are developing steps to deter other countries from assisting any Russian legal action against European entities. They are also crafting safeguards to protect EU countries with assets in Russia from what they call "illegal expropriation." The Proposed Loan Mechanism Under the complex 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 principal funds would remain untouched. Ukraine would only be obligated to repay the money in the event that Russia consented to pay reparations for the vast destruction caused during the nearly four-year conflict. Other Funding Ideas Belgium, backed by Italy, Bulgaria, and Malta, has asked the EU to examine an different approach for financing Ukraine. This involves common EU borrowing to fund a loan, using unallocated funds within the EU budget. This alternative move, however, demands full agreement among all 27 EU countries. The Hungarian government, considered aligned with the Kremlin, has already signaled its objection. Commenting on Monday, the EU top diplomat, a senior official, said the reparations loan as "the most credible option" for aiding Ukraine. "The reparations loan is secured against the Russian frozen assets, which means it doesn't come from our public funds, which is equally important," she remarked. "It also delivers a clear signal that when you cause all this destruction to another country, you must pay for the rebuilding."