🔗 Share this article Moscow Demands Staggering Amount in Compensation against Euroclear Regarding Seized Funds Russia's monetary authority has stated it is pursuing damages amounting to $230 billion from the securities depository Euroclear. This legal step is a direct warning by the Kremlin regarding proposals to utilize frozen Russian sovereign funds to aid Ukraine. The Legal Claim According to accounts in local state media, the monetary authority initiated a claim last week for approximately 18 trillion roubles. This amount corresponds to the stated $230 billion claim. European Union officials will determine later this week on a proposal to use approximately €210 billion in immobilized Russian assets. The proposal involves granting Ukraine with a large loan to finance its military and financial stability. Most of these funds, amounting to €185 billion, are held at the Euroclear depository in Brussels. Euroclear acts as the primary keeper for the Kremlin's frozen sovereign wealth. Dispute on Ownership European Union officials have maintained that their plan is legally sound. Their position rests on the principle that ownership of the sovereign wealth still belongs to Russia, despite being it was immobilized in EU jurisdictions following the full-scale military offensive of Ukraine. Moscow, in contrast, has labeled any utilization of the assets as illegal appropriation. Authorities have threatened reciprocal measures, including seizing EU corporate assets within Russia. The head of Russia's sovereign wealth fund, a figure who has taken on a key role in peace negotiations, stated on a social media platform that Russia "will win in court" and retrieve its assets. He warned that the EU, the common currency, and Euroclear "will face consequences" from the proposal. Wider Implications In comments interpreted as an effort to drive a wedge between Europe and the United States, the official described the proposal as "a severe attack on the right to ownership and the international reserves system established by the United States." Euroclear declined to provide a statement on the new lawsuit. It has previously stated it is facing over 100 legal cases in Russian jurisdictions. Legal Hurdles Ahead Although judges in European nations are not expected to enforce judgments from Russian courts, experts 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, if relevant assets can be located," commented a lawyer from an international firm. European Safeguards EU officials indicated they are developing measures to deter other nations from assisting any Russian lawsuits against EU companies. Additionally, they are crafting safeguards to protect EU countries with investments in Russia from what they call "unlawful expropriation." The Proposed Loan Mechanism According to the detailed scheme, the EU would provide an initial €90 billion loan to Ukraine, backed by the proceeds generated from the frozen assets at Euroclear. Importantly, Russia's ownership claim on the principal funds would stay untouched. Kyiv would solely be required to return the loan if and when Russia consented to pay compensation for the immense damage caused during the nearly four-year war. Alternative Proposals The Belgian government, supported by Italy, Bulgaria, and Malta, has urged the EU to examine an different method for funding Ukraine. This entails joint EU debt issuance to secure a loan, backed by unallocated funds within the EU budget. This alternative move, nevertheless, demands full agreement among all 27 member states. Hungary's government, viewed as friendly with the Kremlin, has previously signaled its opposition. Speaking on Monday, the EU top diplomat, Kaja Kallas, said the reparations loan as "the strongest solution" for aiding Ukraine. "This mechanism is based on the Russian immobilized funds, which means it doesn't come from our public funds, which is also important," she remarked. "Furthermore, it delivers a powerful signal that if you do all this damage to another country, you have to pay for the reparations."