Russia threatens legal battle over EU plans to use its assets

The Bank of Russia has stated that the European Union's plans to use its assets are illegal and that it reserves the right to use all available means to protect its interests.

Source: Reuters

Details: In a separate statement the regulator said it was filing a lawsuit in a Moscow court against the Brussels-based financial institution Euroclear, which holds a significant share of these assets. The Russian side claims that Euroclear's actions have caused damage and prevented the bank from managing its funds and securities.

"Mechanisms of direct or indirect use of the assets of the Bank of Russia, as well as any other forms of unauthorised use of the assets of the Bank of Russia, are illegal and contrary to international law, including violating the principles of sovereign immunity of assets," the central bank said.

The bank referred to a European Commission press release dated 3 December, which set out two possible options for supporting Ukraine's financial needs in 2026-2027.

Under one option, the Commission would be able to borrow funds from EU financial institutions that hold frozen assets of the Russian central bank in order to provide Ukraine with a reparations loan.

Russian officials have repeatedly stated that such actions would be met with "the harshest reaction".

EU diplomats have noted that member states are planning to agree on Friday to freeze the Russian central bank's assets in Europe for an indefinite period so that they no longer have to vote every six months to extend the freeze.

The Bank of Russia said that the implementation of such plans would be challenged in "national courts, judicial authorities of foreign states and international organisations, arbitral tribunals and other international judicial instances, followed by the enforcement of judicial decisions in the territories of UN member states".

Background:

• EU leaders from seven member states have written to European Commission President Ursula von der Leyen and European Council President António Costa, calling for the use of frozen Russian assets to provide Ukraine with a "reparations loan".
• The EU has begun considering a tougher approach towards Belgium, which opposes the idea of paying Ukraine a "reparations loan" from frozen Russian assets; some European officials have not ruled out ignoring the position of the Belgian government, led by Bart De Wever.

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