🔗 Share this article Moscow Demands Substantial Amount in Compensation against Clearing House over Seized Funds Russia's monetary authority has declared it is pursuing compensation totaling $230 billion against the securities depository Euroclear. This move represents a direct response by the Kremlin against plans to use immobilized Russian state funds to support Ukraine. The Substantial Demand Based on accounts in Russian state media, the monetary authority filed a claim last week for roughly 18 trillion roubles. This amount is equivalent to the stated $230 billion claim. European Union officials are set to decide in the coming days regarding a proposal to use approximately €210 billion in immobilized Russian state funds. The proposal involves granting Ukraine with a substantial loan to fund its military and economic needs. The vast majority of these assets, amounting to €185 billion, are stored at the Euroclear clearing house in Brussels. Euroclear acts as the main keeper for the Kremlin's frozen financial reserves. Dispute on Ownership European Union authorities have argued that their proposal is on solid legal ground. Their position is based on the principle that title of the state assets remains with Russia, even though it was frozen in European countries shortly after the full-scale military offensive of Ukraine. The Russian government, however, has called any utilization of the assets as illegal appropriation. It has threatened retaliatory measures, such as confiscating EU private investors' holdings within Russia. The head of Russia's sovereign wealth fund, who has assumed a prominent position in peace negotiations, stated on X that Russia "will win in court" and retrieve its assets. He added that the EU, the common currency, and Euroclear "will suffer" from the plan. Geopolitical Maneuvering With statements interpreted as an attempt to drive a wedge between Europe and the United States, Dmitriev characterized the proposal as "a severe assault on the right to ownership and the global financial system established by the United States." The clearing house refused to provide a statement on the new lawsuit. The institution has previously noted it is contending with over 100 lawsuits in Russian jurisdictions. Enforcement Challenges While judges in European nations are not expected to recognize judgments from Russian tribunals, experts anticipate Moscow to seek enforcement in nations with closer relations to the Kremlin. "The Bank of Russia could try to enforce a Russian court's decision against Euroclear in countries such as China, Hong Kong, the UAE, Kazakhstan, and other friendly states, provided that relevant assets can be identified," stated a lawyer from an NSP law firm. EU Countermeasures European authorities indicated they are developing measures to deter other countries from aiding any Russian lawsuits against EU entities. They are also designing protections to shield EU member states with assets in Russia from what they term "unlawful expropriation." The Proposed Loan Mechanism According to the complex plan, the EU would provide an first €90 billion loan to Ukraine, using the proceeds earned from the frozen assets at Euroclear. Critically, Russia's legal claim on the principal funds would stay unaffected. Kyiv would only be obligated to return the loan in the event that Russia agreed to pay reparations for the vast damage inflicted during the ongoing conflict. Alternative Proposals Belgium, backed by Italy, Bulgaria, and Malta, has urged the EU to consider an different approach for financing Ukraine. This entails common EU debt issuance to fund a loan, using unused funds within the EU budget. This alternative move, nevertheless, requires unanimity among all 27 member states. The Hungarian government, considered friendly with the Kremlin, has previously signaled its objection. Speaking on Monday, the EU foreign policy chief, a senior official, said the reparations loan as "the strongest solution" for aiding Ukraine. "The reparations loan is based on the Russian immobilized funds, meaning it doesn't come from our public funds, which is also important," she stated. "It also sends a clear signal that if you do all this destruction to another nation, you have to pay for the reparations."