🔗 Share this article Russia Seeks Significant Sum in Compensation against Euroclear over Frozen Assets Russia's monetary authority has declared it is seeking compensation totaling $230 billion from the financial institution Euroclear. This action is a clear warning by the Kremlin against proposals to use immobilized Russian sovereign assets to aid Ukraine. The Substantial Demand According to reports in local news outlets, the monetary authority filed a claim last week for an estimated 18 trillion roubles. This amount is equivalent to the aforementioned $230 billion demand. EU leaders will decide in the coming days on a proposal to use around €210 billion in immobilized Russian state funds. The proposal involves providing Ukraine with a substantial loan to fund its military and financial stability. The vast majority of these funds, amounting to €185 billion, are held at the Euroclear clearing house in Brussels. This institution serves as the main keeper for the Kremlin's frozen sovereign wealth. Divergent Legal Views EU officials have maintained that their proposal is legally sound. They argue is based on the principle that ownership of the sovereign wealth still belongs to Russia, despite being it was immobilized in European jurisdictions following the full-scale military offensive of Ukraine. The Russian government, in contrast, has called any utilization of the funds as theft. It has warned of retaliatory actions, such as seizing EU private investors' assets within Russia. The head of Russia's sovereign wealth fund, who has taken on a prominent role 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 face consequences" from the plan. Wider Implications In comments interpreted as an effort to drive a wedge between Europe and the United States, Dmitriev described the assets plan as "a severe attack on property rights and the global financial system created by the United States." The clearing house refused to provide a statement on the latest legal action. The institution has in the past stated it is contending with more than 100 lawsuits in Russian courts. Enforcement Challenges Although judges in EU countries are unlikely to recognize rulings from Russian tribunals, experts anticipate Moscow to seek enforcement in countries with stronger ties to the Kremlin. "The Bank of Russia could try to implement a Russian legal ruling against Euroclear in countries such as China, Hong Kong, the UAE, Kazakhstan, and other friendly nations, if such assets can be identified," stated a legal expert from an international firm. EU Countermeasures EU officials said they are working on measures to discourage other countries from aiding any Russian legal action against EU entities. Additionally, they are crafting safeguards to shield EU member states with investments in Russia from what they call "unlawful expropriation." How the Funding Would Work Under the detailed scheme, the EU would provide an first €90 billion loan to Ukraine, backed by the proceeds earned from the immobilized assets at Euroclear. Critically, Russia's ownership claim on the underlying funds would remain untouched. Kyiv would only be required to repay the loan in the event that Russia consented to pay compensation for the vast destruction inflicted during the nearly four-year war. Other Funding Ideas Belgium, supported by Italy, Bulgaria, and Malta, has asked the EU to examine an alternative approach for funding Ukraine. This entails joint EU debt issuance to secure a loan, backed by unused funds within the European budget. This alternative move, however, requires full agreement among all 27 member states. 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 option" for supporting Ukraine. "This mechanism is secured against the Russian immobilized funds, which means it is not drawn from our taxpayers' money, which is also important," she remarked. "It also sends a powerful signal that when you cause all this destruction to another nation, you must pay for the rebuilding."