🔗 Share this article Russia Seeks Significant Amount in Damages from Clearing House over Frozen Assets Russia's monetary authority has declared it is claiming damages totaling $230 billion from the financial institution Euroclear. This action represents a direct response from the Kremlin against plans to utilize frozen Russian sovereign assets to aid Ukraine. The Substantial Demand According to accounts in local state media, the central bank filed a lawsuit last week for approximately 18 trillion roubles. This sum is equivalent to the stated $230 billion claim. EU leaders are set to determine later this week on a plan to leverage approximately €210 billion in immobilized Russian assets. The proposal involves granting Ukraine with a substantial loan to fund its defence and financial needs. Most of these assets, amounting to €185 billion, reside at the Euroclear clearing house in Brussels. Euroclear serves as the main keeper for the Kremlin's immobilised sovereign wealth. Dispute on Ownership EU officials have argued that their proposal is on solid legal ground. They argue is based on the fact that title of the sovereign wealth remains with Russia, even though it was frozen in EU countries shortly after the full-scale invasion of Ukraine. The Russian government, in contrast, has labeled any utilization of the funds as theft. It has warned of retaliatory actions, such as seizing European private investors' holdings within Russia. Kirill Dmitriev, who has taken on a prominent role in peace negotiations, stated on X that Russia "will win in court" and regain its funds. He added that the European Union, the common currency, and Euroclear "will face consequences" from the plan. Strategic Positioning In comments seen as an effort to drive a wedge between Europe and the United States, Dmitriev described the proposal as "a severe assault on the right to ownership and the global financial system created by the United States." Euroclear declined to comment on the new lawsuit. The institution has previously noted it is facing more than 100 lawsuits in Russian jurisdictions. Legal Hurdles Ahead Although courts in European nations are unlikely to recognize judgments from Russian courts, analysts expect Moscow to pursue implementation in countries with closer 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 nations, if relevant assets can be identified," commented a lawyer from an NSP law firm. European Safeguards European authorities said they are developing measures to discourage other nations from assisting any Russian legal action against European companies. Additionally, they are crafting protections to shield EU member states with investments in Russia from what they call "illegal expropriation." How the Funding Would Work Under the complex scheme, 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 untouched. Ukraine would solely be required to repay the loan in the event that Russia agreed to pay compensation for the immense damage inflicted 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 involves common EU debt issuance 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, viewed as aligned with the Kremlin, has already signaled its objection. Commenting on Monday, the EU foreign policy chief, Kaja Kallas, said the reparations loan as "the strongest solution" for supporting Ukraine. "The reparations loan is based on the Russian frozen assets, meaning it doesn't come from our public funds, which is also significant," she stated. "It also delivers a powerful message that if you cause all this damage to another nation, you must pay for the reparations."