🔗 Share this article Moscow Demands Significant Sum in Compensation against Clearing House Regarding Frozen Funds The Russian central bank 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 use frozen Russian state funds to aid Ukraine. The Substantial Demand According to accounts in local state media, the monetary authority initiated a claim last week for an estimated 18 trillion roubles. This amount is equivalent to the aforementioned $230 billion demand. EU leaders will determine in the coming days on a plan to use approximately €210 billion in frozen Russian assets. This scheme entails providing Ukraine with a large loan to fund its military and economic stability. The vast majority of these funds, amounting to €185 billion, are stored at the Euroclear depository in Brussels. Euroclear acts as the main custodian for the Kremlin's immobilised financial reserves. A Clash Over Legality EU authorities have argued that their plan is on solid legal ground. Their position is based on the principle that title of the state assets still belongs to Russia, despite being it was frozen in European jurisdictions following the 2022 military offensive of Ukraine. Moscow, in contrast, has called any use of the funds as theft. Authorities have warned of retaliatory actions, including seizing European private investors' holdings within Russia. The head of Russia's sovereign wealth fund, who has assumed 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 euro, and Euroclear "will face consequences" from the plan. Wider Implications In comments interpreted as an attempt to drive a wedge between Europe and the United States, Dmitriev characterized the assets plan as "a vicious assault on the right to ownership and the global financial system established by the United States." The clearing house declined to provide a statement on the new lawsuit. It has in the past stated it is facing more than 100 legal cases in Russian courts. Legal Hurdles Ahead Although judges in EU countries are not expected to enforce rulings from Russian courts, analysts anticipate Moscow to seek implementation in countries with closer ties to the Kremlin. "Russian monetary authorities could try to enforce a Russian legal ruling against Euroclear in countries such as China, Hong Kong, the UAE, Kazakhstan, and other friendly states, if such assets can be identified," stated a legal expert from an NSP law firm. European Safeguards European authorities indicated they are developing steps to discourage other nations from aiding any Russian lawsuits against European companies. They are also designing protections to shield EU member states with investments in Russia from what they call "unlawful expropriation." The Proposed Loan Mechanism Under the complex scheme, the EU would provide an initial €90 billion loan to Ukraine, backed by the cash earned from the frozen assets at Euroclear. Importantly, Russia's ownership claim on the principal funds would remain unaffected. Ukraine would only be required to repay the money if and when Russia consented to pay compensation for the vast destruction caused during the ongoing conflict. Other Funding Ideas Belgium, backed by Italy, Bulgaria, and Malta, has urged the EU to examine an alternative method for financing Ukraine. This entails joint EU borrowing to secure a loan, backed by unused funds within the EU budget. Such a proposal, nevertheless, requires unanimity among all 27 EU countries. Hungary's government, considered friendly with the Kremlin, has previously signaled its opposition. Speaking on Monday, the EU foreign policy chief, Kaja Kallas, said the reparations loan as "the most credible solution" for aiding Ukraine. "This mechanism is based on the Russian frozen assets, which means it is not drawn from our public funds, which is also important," she stated. "Furthermore, it sends a powerful message that if you do all this damage to another country, you have to pay for the reparations."