🔗 Share this article Moscow Demands Staggering Amount in Compensation from Clearing House Regarding Frozen Funds Russia's monetary authority has stated it is pursuing damages amounting to $230 billion from the securities depository Euroclear. This move is a direct warning by the Kremlin regarding plans to use immobilized Russian sovereign funds to support Ukraine. The Legal Claim Based on reports in local state media, the monetary authority initiated a lawsuit last week for an estimated 18 trillion roubles. This sum corresponds to the stated $230 billion claim. European Union officials will determine in the coming days regarding a plan to leverage around €210 billion in immobilized Russian assets. The proposal entails providing Ukraine with a large loan to fund its military and financial stability. Most of these assets, amounting to €185 billion, are stored at the Euroclear depository in Brussels. This institution acts as the main custodian for the Kremlin's immobilised sovereign wealth. Divergent Legal Views European Union officials have argued that their plan is legally sound. Their position rests on the fact that title of the state assets remains with Russia, even though it was frozen in European jurisdictions following the full-scale invasion of Ukraine. The Russian government, however, has labeled any use of the assets as theft. Authorities have warned of reciprocal actions, such as seizing EU corporate holdings within Russia. The head of Russia's sovereign wealth fund, a figure who has taken on a key role in diplomatic talks, wrote on X 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 interpreted as an effort to drive a wedge between Europe and the United States, the official characterized the proposal as "a vicious attack on property rights and the global financial system established by the United States." The clearing house declined to comment on the new legal action. The institution has previously noted it is facing more than 100 legal cases in Russian jurisdictions. Legal Hurdles Ahead While courts in EU countries are not expected to enforce judgments from Russian tribunals, analysts anticipate Moscow to seek implementation in nations with closer relations to the Kremlin. "The Bank of Russia may attempt to implement a Russian court's decision against Euroclear in jurisdictions like China, Hong Kong, the UAE, Kazakhstan, and other friendly states, provided that such assets can be identified," commented a legal expert from an international firm. European Safeguards European authorities indicated they are developing steps to discourage other countries from aiding any Russian legal action against European entities. Additionally, they are designing protections to protect EU countries with investments in Russia from what they term "illegal expropriation." How the Funding Would Work Under the complex scheme, the EU would issue an first €90 billion loan to Ukraine, backed by the proceeds generated from the frozen assets at Euroclear. Importantly, Russia's legal claim on the principal funds would stay untouched. Kyiv would only be required to repay the loan in the event that Russia agreed to pay reparations for the immense damage caused during the ongoing war. Alternative Proposals The Belgian government, backed by Italy, Bulgaria, and Malta, has urged the EU to examine an alternative method for funding Ukraine. This entails common EU debt issuance to secure a loan, using unallocated funds within the EU budget. This alternative move, nevertheless, demands unanimity among all 27 EU countries. The Hungarian government, considered aligned with the Kremlin, has previously expressed its opposition. Speaking on Monday, the EU foreign policy chief, Kaja Kallas, said the reparations loan as "the most credible solution" for aiding Ukraine. "This mechanism is secured against the Russian immobilized funds, which means it doesn't come from our taxpayers' money, which is equally important," she remarked. "It also delivers a powerful signal that if you do all this damage to another nation, you must pay for the rebuilding."