🔗 Share this article Moscow Demands Staggering Amount in Compensation from Clearing House Regarding Seized Funds The Russian central bank has declared it is pursuing compensation valued at $230 billion from the securities depository Euroclear. This action is a direct response from the Kremlin regarding plans to utilize frozen Russian state assets to support Ukraine. The Substantial Demand Based on reports in local state media, the monetary authority initiated a claim last week for roughly 18 trillion roubles. This sum is equivalent to the aforementioned $230 billion claim. European Union officials are set to decide in the coming days on a proposal to leverage approximately €210 billion in immobilized Russian state funds. The proposal entails providing Ukraine with a large loan to finance its military and financial needs. The vast majority of these funds, amounting to €185 billion, reside at the Euroclear depository in Brussels. This institution serves as the main keeper for the Russian frozen sovereign wealth. Divergent Legal Views European Union officials have maintained that their proposal is on solid legal ground. Their position rests on the fact that title of the state assets remains with Russia, despite being it was immobilized in EU jurisdictions following the 2022 military offensive of Ukraine. Moscow, in contrast, has labeled any utilization of the assets as illegal appropriation. It has warned of reciprocal measures, such as confiscating EU private investors' holdings within Russia. Kirill Dmitriev, a figure who has assumed a key position in peace negotiations, stated on X that Russia "will prevail in court" and regain its funds. He warned that the European Union, 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 assets plan as "a severe attack on property rights and the international reserves system created by the United States." The clearing house refused to provide a statement on the latest legal action. It has in the past stated it is contending with over 100 legal cases in Russian jurisdictions. Legal Hurdles Ahead While judges in EU countries are not expected to recognize rulings from Russian courts, experts expect Moscow to pursue implementation in countries with stronger ties to the Kremlin. "Russian monetary authorities could try to implement a Russian legal ruling against Euroclear in jurisdictions like China, Hong Kong, the UAE, Kazakhstan, and other sympathetic states, if such assets can be located," commented a lawyer from an NSP law firm. EU Countermeasures EU officials said they are developing measures to discourage other countries from assisting any Russian legal action against European companies. They are also designing safeguards to shield EU countries with investments in Russia from what they term "illegal expropriation." The Proposed Loan Mechanism Under the complex scheme, the EU would provide an initial €90 billion loan to Ukraine, using the proceeds generated from the frozen assets at Euroclear. Critically, Russia's legal claim on the underlying funds would stay unaffected. Kyiv would only be obligated to return the money if and when Russia agreed to pay compensation for the vast destruction caused during the ongoing conflict. Alternative Proposals Belgium, supported by Italy, Bulgaria, and Malta, has urged the EU to consider an alternative method for financing Ukraine. This entails common EU borrowing to secure a loan, using unused funds within the European budget. Such a proposal, nevertheless, demands full agreement among all 27 EU countries. Hungary's government, viewed as aligned with the Kremlin, has already signaled its opposition. Commenting on Monday, the EU foreign policy chief, Kaja Kallas, described the reparations loan as "the strongest option" for supporting Ukraine. "The reparations loan is secured against the Russian frozen assets, which means it doesn't come from our taxpayers' money, which is also significant," she stated. "Furthermore, it sends a powerful message that when you cause all this destruction to another nation, you have to pay for the reparations."