🔗 Share this article Moscow Demands Significant Amount in Damages against Clearing House Regarding Frozen Assets Russia's monetary authority has declared it is seeking damages valued at $230 billion from the securities depository Euroclear. This move is a clear response from the Kremlin regarding plans to use frozen Russian state assets to aid Ukraine. The Legal Claim According to reports in Russian news outlets, the monetary authority initiated a lawsuit last week for roughly 18 trillion roubles. This amount corresponds to the stated $230 billion claim. EU leaders are set to determine in the coming days on a plan to leverage around €210 billion in immobilized Russian assets. This scheme entails granting Ukraine with a substantial loan to finance its defence and economic needs. The vast majority of these funds, amounting to €185 billion, are stored at the Euroclear clearing house in Brussels. This institution acts as the primary custodian for the Kremlin's immobilised financial reserves. A Clash Over Legality European Union authorities have argued that their plan is legally sound. Their position is based on the fact that title of the sovereign wealth still belongs to Russia, even though it was frozen in European countries following the full-scale invasion of Ukraine. The Russian government, however, has labeled any use of the funds as illegal appropriation. Authorities have threatened reciprocal actions, such as seizing EU private investors' assets within Russia. Kirill Dmitriev, who has assumed a key position in peace negotiations, wrote on X that Russia "will prevail in court" and retrieve its assets. He added that the European Union, the euro, and Euroclear "will suffer" from the plan. Strategic Positioning With statements seen as an attempt to create division between Europe and the United States, the official characterized the proposal as "a severe attack on property rights and the international reserves system created by the United States." Euroclear declined to provide a statement on the new lawsuit. The institution has previously noted it is facing over 100 lawsuits in Russian jurisdictions. Legal Hurdles Ahead While judges in European nations are not expected to recognize judgments from Russian courts, analysts expect Moscow to seek implementation in nations with stronger relations to the Kremlin. "The Bank of Russia could try to implement a Russian legal ruling against Euroclear in jurisdictions like China, Hong Kong, the UAE, Kazakhstan, and other friendly nations, provided that such assets can be identified," commented a legal expert from an international firm. European Safeguards EU officials indicated they are developing measures to discourage other nations from assisting any Russian lawsuits against European companies. Additionally, they are designing protections to shield EU countries with investments in Russia from what they term "illegal expropriation." How the Funding Would Work Under the complex plan, the EU would provide an initial €90 billion loan to Ukraine, backed by the cash earned from the frozen assets at Euroclear. Critically, Russia's ownership claim on the underlying funds would stay untouched. Ukraine would solely be required to return the money in the event that Russia consented to pay compensation for the vast destruction caused during the nearly four-year conflict. Other Funding Ideas The Belgian government, backed by Italy, Bulgaria, and Malta, has urged the EU to examine an different approach for funding Ukraine. This involves common EU borrowing to fund a loan, backed by unallocated funds within the European budget. This alternative move, nevertheless, demands full agreement among all 27 EU countries. The Hungarian government, viewed as aligned with the Kremlin, has already expressed its opposition. Commenting on Monday, the EU top diplomat, Kaja Kallas, said the proposed loan scheme as "the most credible solution" for supporting Ukraine. "The reparations loan is based on the Russian immobilized funds, meaning it doesn't come from our taxpayers' money, which is equally significant," she remarked. "It also delivers a powerful signal that if you do all this destruction to another country, you have to pay for the reparations."