Russia sues Brussels-based financial firm as EU pushes to unlock frozen assets for Ukraine

Russia’s central bank on Friday filed a lawsuit in Moscow against Brussels-based Euroclear, which holds most of the frozen Russian assets the EU hopes to use to fund aid for Ukraine, according to a Politico report.

The move comes just days ahead of a crucial European Council summit, where EU leaders are expected to push Belgium to release billions of euros in Russian assets to back a major loan package for Kyiv.

“Due to the unlawful actions of the Euroclear depository that are causing losses to the Bank of Russia, and in light of mechanisms officially under consideration by the European Commission for the direct or indirect use of the Bank of Russia’s assets without its consent, the Bank of Russia is filing a claim in the Moscow Arbitration Court against the Euroclear depository to recover the losses incurred,” Politico quoted the central bank as saying in a statement.

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Responding to the development, EU Economy Commissioner Valdis Dombrovskis told finance ministers in Brussels, “We can expect that Russia will continue to launch speculative legal proceedings to prevent the EU from upholding international law and to pursue the legal obligation for Russia to compensate Ukraine for the damages it has done.”

“Our proposal is legally robust and fully in line with the EU and public international law,” he added.

Belgium has resisted using frozen Russian state assets, warning it could later be forced to repay Moscow.

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About €185 billion of these assets are held by Brussels-based Euroclear, with another €25 billion scattered across private EU banks.

With the future of the planned loan to Ukraine still uncertain, EU ambassadors on Thursday granted the European Commission emergency powers to keep Russian state assets frozen indefinitely. The move would block the funds until Moscow pays post-war reparations, reducing the risk that pro-Russian governments such as Hungary or Slovakia could return the money.

While Russian courts cannot force the release of Euroclear’s assets held in Belgium, they can target Euroclear accounts within Russian banks. But a 2024 EU legal mechanism allows the Commission to compensate Euroclear for any Russia-imposed losses related to sanctions compliance, effectively neutralizing potential retaliation.

With inputs from agencies