🔗 Share this article Moscow Demands Staggering Amount in Damages against Clearing House over Frozen Funds The Russian central bank has stated it is pursuing compensation valued at $230 billion from the financial institution Euroclear. This move constitutes a direct response from the Kremlin against plans to use immobilized Russian state funds to aid Ukraine. The Legal Claim According to accounts in Russian news outlets, the monetary authority filed a lawsuit last week for approximately 18 trillion roubles. This amount is equivalent to the aforementioned $230 billion claim. European Union officials are set to determine in the coming days on a plan to use around €210 billion in frozen Russian assets. The proposal involves granting Ukraine with a large loan to fund its defence and financial stability. 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 sovereign wealth. A Clash Over Legality European Union officials have argued that their proposal is legally sound. Their position rests on the fact that ownership of the state assets remains with Russia, even though it was immobilized in European jurisdictions shortly after the 2022 invasion of Ukraine. The Russian government, however, has labeled any use of the funds as theft. Authorities have threatened retaliatory actions, such as confiscating EU corporate assets within Russia. The head of Russia's sovereign wealth fund, a figure who has taken on a prominent position in diplomatic talks, stated on a social media platform that Russia "will win in court" and retrieve its assets. He warned that the European Union, the euro, and Euroclear "will suffer" from the proposal. Wider Implications In comments seen as an effort to create division between Europe and the United States, Dmitriev characterized the assets plan as "a severe assault on the right to ownership and the international reserves system established by the United States." The clearing house refused to comment on the new legal action. The institution has previously noted it is contending with more than 100 legal cases in Russian jurisdictions. Legal Hurdles Ahead While courts in European nations are unlikely to enforce rulings from Russian courts, analysts expect Moscow to seek enforcement in countries with closer relations to the Kremlin. "The Bank of Russia could try to enforce a Russian legal ruling against Euroclear in jurisdictions like China, Hong Kong, the UAE, Kazakhstan, and other friendly nations, provided that such holdings can be identified," commented a legal expert from an international firm. European Safeguards EU officials said they are developing measures to discourage other nations from aiding any Russian legal action against EU companies. They are also crafting safeguards to protect EU countries with assets in Russia from what they term "illegal expropriation." How the Funding Would Work According to the complex plan, the EU would issue an initial €90 billion loan to Ukraine, using the cash generated from the immobilized assets at Euroclear. Critically, Russia's ownership claim on the principal funds would remain unaffected. Ukraine would only be obligated to return the loan if and when Russia consented to pay compensation for the vast destruction caused during the nearly four-year war. Alternative Proposals Belgium, supported by Italy, Bulgaria, and Malta, has urged the EU to consider an different method for financing Ukraine. This entails joint EU debt issuance to fund a loan, using unused funds within the European budget. This alternative move, nevertheless, requires unanimity among all 27 EU countries. The Hungarian government, considered friendly with the Kremlin, has already signaled its objection. Commenting on Monday, the EU foreign policy chief, Kaja Kallas, said the proposed loan scheme as "the strongest option" for supporting Ukraine. "The reparations loan is secured against the Russian immobilized funds, meaning it doesn't come from our taxpayers' money, which is equally important," she stated. "It also delivers a powerful signal that if you cause all this damage to another country, you must pay for the rebuilding."