Russia’s Central Bank has formally escalated its legal battle against the European Union’s use of its immobilized sovereign assets by filing a lawsuit seeking a massive $229 billion in damages from Euroclear, Europe’s largest securities depository. The lawsuit was filed in a Moscow arbitration court, marking the first major legal move by Russia’s government to directly contest the freezing of its reserves, which were immobilized following the 2022 invasion of Ukraine.
The central bank’s claim, lodged on December 12, demands compensation amounting to 18.2 trillion rubles, which is equivalent to the full value of the frozen Russian sovereign assets held by the Belgian-based clearing company. Euroclear currently holds approximately €185 billion ($217 billion) of these reserves, which have been indefinitely immobilized under EU sanctions. The lawsuit closely follows the European Union’s recent decision to indefinitely freeze these assets, a step aimed at ensuring the funds are available to support Ukraine’s military and civilian needs in the coming years and cannot be used by Russia in any peace negotiations.
This legal action is widely interpreted as a pre-emptive strategy by the Kremlin to expose the European Union and Euroclear to massive legal and financial risks, should any portion of the frozen assets be used to back loans or provide direct aid to Kyiv. Russian officials have repeatedly warned that using its sovereign reserves constitutes “theft” and would severely undermine international confidence in the euro and the financial stability of the EU’s custodial institutions.Furthermore, Moscow has promised harsh retaliatory measures, including the potential seizure of European private investors’ holdings within Russia, should the EU proceed with its plan.
The timing of the lawsuit comes as internal EU discussions regarding the utilization of these assets have become increasingly complex and difficult, according to the bloc’s top diplomat. The European Commission has floated a proposal for a so-called “reparations loan” of about €90 billion, which would be underwritten by the frozen assets and only repaid by Ukraine if Russia pays war reparations. However, member states like Belgium, where Euroclear is based, and Italy have expressed strong opposition to outright confiscation, fearing they could face significant legal liabilities and financial risks if Moscow successfully prevails in international courts.
