Russia sues Euroclear over ‘reparations loan’ to Ukraine from its frozen assets
12 December 11:04
The Russian Central Bank said that it considers the European Commission’s plans to use its assets to finance Ukraine illegal and intends to challenge these actions in courts and move to protect its interests by all available means in case the initiatives under discussion are further advanced, "Komersant Ukrainian" reports citing a statement from the Central Bank of Russia.
On Thursday, the European Union governments initiated the process of long-term freezing of the Central Bank’s assets in Europe to avoid voting every six months and to prepare the ground for using these funds to finance Ukraine.
The Bank of Russia called the measures envisaged in the European Commission’s press release and the draft regulation on the use of CBR assets placed in financial institutions of the European Union, including the Euroclear depository, illegal.
“The mechanisms of direct or indirect use of the Bank of Russia’s assets, as well as any other forms of uncoordinated use of the Bank of Russia’s assets, provided for in the said document are illegal, contrary to international law, including those that violate the principles of sovereign immunity of assets,” the CBR said in a statement.
“The issuance and implementation of the regulations announced on the official website of the European Commission will entail unconditional appeal by the Bank of Russia of any direct or indirect actions that entail the uncoordinated use of the Bank of Russia’s assets in all available competent authorities, including national courts, judicial authorities of foreign states and international organizations, as well as the enforcement of judicial acts in the territory of UN member states,” the CBR noted.
A lawsuit against EUROCLEAR
Most European leaders want to use the CBI’s assets frozen in Europe, which amount to more than 210 billion euros, to finance Ukraine. Most of these funds are kept in the Brussels-based central depository Euroclear.
On Friday, December 12, the Bank of Russia announced that it was filing a lawsuit against Euroclear in the Moscow Arbitration Court to compensate for the losses incurred by the regulator from the actions of the depository:
“In connection with the illegal actions of Euroclear, which cause damage to the Bank of Russia, as well as in connection with the mechanisms of direct or indirect use of the Bank of Russia’s assets without the consent of the Bank of Russia, the Bank of Russia is filing a claim to the Moscow Arbitration Court against Euroclear for damages.”
Euroclear, the Belgian government, and the European Commission have not yet responded to these statements.
According to the CBR, the actions of Euroclear caused damage to the Bank of Russia due to the inability to dispose of its cash and securities.
The Bank of Russia has informed that it reserves the right, without further notice, to proceed to the practical implementation of all available legal and other mechanisms to protect its interests in the event of further progress or any form of implementation of the EU initiatives under discussion.
If the EU uses Russia’s reserve assets frozen in its jurisdiction to finance Ukraine, Russia will first consider confiscating the assets of European individuals frozen in special type C accounts, experts say.
Euroclear has about 17 billion euros of client assets frozen in C-type accounts in Russia, and the head of the depository, Valerie Urbain, said in an interview with the Corriere della Sera newspaper that she fears retaliation from Moscow, which could confiscate the assets of Euroclear clients in Russia, as well as other funds belonging to Europeans.
