🔗 Share this article Moscow Demands Staggering Amount in Damages against Euroclear over Frozen Funds Russia's monetary authority has stated it is pursuing damages totaling $230 billion against the securities depository Euroclear. This move is a clear warning from the Kremlin regarding plans to utilize frozen Russian state assets to support Ukraine. The Substantial Demand Based on accounts in local state media, the monetary authority filed a claim last week for an estimated 18 trillion roubles. This figure 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 entails providing Ukraine with a substantial loan to finance its military and financial needs. The vast majority of these assets, totaling €185 billion, reside at the Euroclear clearing house in Brussels. This institution acts as the main custodian for the Kremlin's frozen sovereign wealth. Divergent Legal Views EU authorities have argued that their proposal is on solid legal ground. Their position is based on the principle that ownership of the state assets remains with Russia, even though it was immobilized in EU countries shortly after the 2022 military offensive of Ukraine. Moscow, however, has labeled any utilization of the assets as theft. It has threatened reciprocal actions, such as confiscating EU private investors' assets within Russia. Kirill Dmitriev, a figure who has assumed a prominent role in diplomatic talks, stated on X that Russia "will prevail in court" and retrieve its assets. He warned that the European Union, the common currency, and Euroclear "will face consequences" from the plan. Wider Implications In comments interpreted as an attempt to create division between Europe and the United States, the official characterized the assets plan as "a severe assault on property rights and the global financial system established by the United States." The clearing house refused to comment on the new legal action. It has previously noted it is contending with over 100 lawsuits in Russian courts. Legal Hurdles Ahead Although judges in EU countries are not expected to enforce rulings from Russian tribunals, experts anticipate Moscow to seek implementation in countries with stronger relations to the Kremlin. "The Bank of Russia may attempt to enforce a Russian legal ruling against Euroclear in countries such as China, Hong Kong, the UAE, Kazakhstan, and other sympathetic states, provided that such holdings can be located," stated a legal expert from an NSP law firm. EU Countermeasures EU officials indicated they are developing measures to discourage other nations from aiding any Russian lawsuits against European entities. They are also designing protections to protect EU member states with investments in Russia from what they call "unlawful expropriation." The Proposed Loan Mechanism Under the complex plan, the EU would provide an initial €90 billion loan to Ukraine, using the proceeds generated from the immobilized assets at Euroclear. Critically, Russia's legal claim on the underlying funds would stay unaffected. Ukraine would only be required to return the loan if and when Russia agreed to pay compensation for the vast damage inflicted during the nearly four-year conflict. Other Funding Ideas Belgium, backed by Italy, Bulgaria, and Malta, has asked the EU to examine an alternative method for funding Ukraine. This involves joint EU borrowing to secure a loan, using unused funds within the EU budget. This alternative move, however, requires full agreement among all 27 EU countries. The Hungarian government, considered friendly with the Kremlin, has previously expressed its opposition. Commenting on Monday, the EU foreign policy chief, a senior official, said the reparations loan as "the strongest option" for supporting Ukraine. "The reparations loan is secured against the Russian frozen assets, which means it is not drawn from our taxpayers' money, which is equally significant," she remarked. "It also delivers a clear signal that when you do all this destruction to another country, you have to pay for the reparations."