đŸ”— Share this article Moscow Demands Substantial Amount in Compensation against Clearing House over Frozen Assets Russia's monetary authority has stated it is claiming compensation totaling $230 billion from the financial institution Euroclear. This action represents a clear warning from the Kremlin regarding plans to utilize frozen Russian state funds to support Ukraine. The Legal Claim According to accounts in Russian state media, the monetary authority initiated a lawsuit last week for approximately 18 trillion roubles. This amount is equivalent to the aforementioned $230 billion claim. European Union officials are set to determine in the coming days on a plan to use approximately €210 billion in frozen Russian state funds. The proposal involves providing Ukraine with a substantial loan to fund its defence and financial stability. The vast majority of these assets, totaling €185 billion, are stored at the Euroclear depository in Brussels. This institution acts as the main custodian for the Russian immobilised financial reserves. Divergent Legal Views European Union officials have argued that their proposal is legally sound. Their position rests on the principle that ownership of the sovereign wealth still belongs to Russia, even though it was frozen in EU countries shortly after the 2022 military offensive of Ukraine. The Russian government, however, has labeled any use of the funds as theft. Authorities have threatened reciprocal actions, including seizing EU corporate assets within Russia. The head of Russia's sovereign wealth fund, a figure who has assumed a key role in peace negotiations, stated on a social media platform that Russia "will win in court" and regain its funds. He added that the European Union, the euro, and Euroclear "will suffer" from the proposal. Strategic Positioning 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 assault on the right to ownership and the global financial system established by the United States." The clearing house refused to comment on the latest lawsuit. It has previously stated it is contending with over 100 lawsuits in Russian jurisdictions. Legal Hurdles Ahead Although judges in EU countries are not expected to recognize judgments from Russian tribunals, analysts anticipate Moscow to pursue enforcement in countries with closer ties to the Kremlin. "Russian monetary authorities could try to implement a Russian court's decision against Euroclear in jurisdictions like China, Hong Kong, the UAE, Kazakhstan, and other friendly nations, provided that relevant assets can be located," stated a lawyer from an international firm. European Safeguards EU officials said they are developing measures to discourage other countries from assisting any Russian lawsuits against European companies. Additionally, they are designing safeguards to protect EU member states with assets in Russia from what they call "illegal expropriation." The Proposed Loan Mechanism According to the detailed plan, the EU would provide an first €90 billion loan to Ukraine, using the proceeds earned from the immobilized assets at Euroclear. Importantly, Russia's legal claim on the principal funds would remain unaffected. Kyiv would solely be obligated to repay the money in the event that Russia agreed to pay compensation for the immense damage inflicted during the ongoing war. Alternative Proposals Belgium, supported by Italy, Bulgaria, and Malta, has urged the EU to consider an different approach for funding Ukraine. This involves joint EU borrowing to fund a loan, using unallocated funds within the European budget. Such a proposal, however, requires full agreement among all 27 member states. Hungary's government, considered aligned with the Kremlin, has already expressed its opposition. Speaking on Monday, the EU foreign policy chief, Kaja Kallas, described the proposed loan scheme as "the most credible solution" for supporting Ukraine. "This mechanism is secured against the Russian frozen assets, which means it doesn't come from our taxpayers' money, which is equally important," she stated. "It also sends a powerful signal that if you do all this damage to another nation, you have to pay for the rebuilding."