🔗 Share this article Moscow Demands Substantial Amount in Damages against Clearing House Regarding Seized Assets The Russian central bank has announced it is claiming compensation amounting to $230 billion from the financial institution Euroclear. This legal step represents a clear response from the Kremlin against proposals to use immobilized Russian sovereign funds to aid Ukraine. The Substantial Demand Based on accounts in Russian news outlets, the central bank filed a claim last week for approximately 18 trillion roubles. This sum is equivalent to the aforementioned $230 billion claim. European Union officials will determine later this week on a proposal to leverage around €210 billion in immobilized Russian state funds. The proposal entails granting Ukraine with a substantial loan to fund its military and financial needs. The vast majority of these assets, totaling €185 billion, are stored at the Euroclear clearing house in Brussels. Euroclear serves as the primary keeper for the Russian immobilised financial reserves. A Clash Over Legality EU authorities have maintained that their plan is legally sound. Their position rests on the principle that ownership of the sovereign wealth still belongs to Russia, despite being it was frozen in European countries following the full-scale military offensive of Ukraine. Moscow, in contrast, has called any use of the funds as theft. It has threatened retaliatory actions, including seizing European private investors' holdings within Russia. Kirill Dmitriev, who has taken on a prominent position in peace negotiations, wrote on X that Russia "will win in court" and regain its funds. He warned that the EU, the common currency, and Euroclear "will suffer" from the plan. Wider Implications With statements interpreted as an attempt to create division between Europe and the United States, Dmitriev characterized the assets plan as "a severe attack on property rights and the global financial system created by the United States." Euroclear refused to comment on the latest legal action. It has in the past stated it is contending with over 100 legal cases in Russian jurisdictions. Legal Hurdles Ahead Although judges in European nations are not expected to recognize judgments from Russian tribunals, experts anticipate Moscow to pursue implementation in nations with stronger relations to the Kremlin. "Russian monetary authorities may attempt to implement a Russian legal ruling against Euroclear in countries such as China, Hong Kong, the UAE, Kazakhstan, and other sympathetic states, provided that relevant holdings can be located," commented a legal expert from an NSP law firm. European Safeguards European authorities indicated they are working on steps to deter other countries from aiding any Russian legal action against EU entities. They are also designing safeguards to shield EU member states with assets in Russia from what they call "unlawful expropriation." How the Funding Would Work According to the complex plan, the EU would issue an initial €90 billion loan to Ukraine, backed by the proceeds earned from the immobilized assets at Euroclear. Importantly, Russia's legal claim on the principal funds would stay unaffected. Kyiv would solely be obligated to return the loan in the event that Russia consented to pay compensation for the vast damage caused during the ongoing war. Other Funding Ideas Belgium, supported by Italy, Bulgaria, and Malta, has urged the EU to consider an different method for funding Ukraine. This involves joint EU debt issuance to fund a loan, backed by unused funds within the European budget. This alternative move, nevertheless, requires unanimity among all 27 member states. The Hungarian government, considered aligned with the Kremlin, has previously expressed its opposition. Commenting on Monday, the EU top diplomat, Kaja Kallas, said the reparations loan as "the strongest solution" for aiding Ukraine. "The reparations loan is based on the Russian frozen assets, meaning it is not drawn from our public funds, which is also important," she remarked. "Furthermore, it sends a clear signal that if you do all this destruction to another country, you have to pay for the rebuilding."