Why Russia has sued Belgium-based Euroclear for $230B
What's the story
Russia's central bank has filed a lawsuit against Euroclear, a Belgium-based securities depository, seeking damages of $230 billion. The case was registered in Moscow after the European Union (EU) froze Russian state assets held by Euroclear, following the Ukraine invasion in 2022. The lawsuit comes as EU leaders consider using these frozen funds to finance a major loan to Ukraine.
Asset ownership
Russia's stance on frozen assets
Russia has called the freezing of its assets "theft" and has threatened to fight this in courts across the globe. The country argues that these assets rightfully belong to it, saying they were frozen in European jurisdictions days after its full-scale invasion of Ukraine. Despite EU officials claiming their plan is legally sound, Russia remains adamant about reclaiming its sovereign wealth.
Retaliation threat
Russia threatens to retaliate against asset seizure
In retaliation for the potential use of frozen assets, Russia has threatened to seize holdings of European private investors in Russia. Kirill Dmitriev, the head of Russia's sovereign wealth fund and a key figure in peace talks, said on X that "Russia will win in court" and "get [the assets] back." He also warned that the EU, euro currency and Euroclear "will suffer" from this plan.
Legal challenges
Euroclear faces over 100 lawsuits from Russia
Euroclear is currently facing more than 100 lawsuits from Russian entities. Despite the legal challenges, the company has refrained from commenting on the situation. Analysts believe Russia might try to enforce a Russian court's decision against Euroclear in countries friendly to Moscow, such as China, UAE as well as Kazakhstan.
Funding strategy
EU's plan for Ukraine funding amid legal disputes
The EU's plan involves initially lending €90 billion to Ukraine from the cash at Euroclear. However, Russia's claim on these funds would remain untouched. The repayment by Kyiv would only happen if and when Russia agrees to pay reparations for the destruction caused during nearly four years of full-scale war. This complex scheme has drawn criticism from some EU member states like Hungary, which oppose it.