Recover damages: The Central Bank files a lawsuit against Euroclear in the Moscow Arbitration Court

On Friday, December 12, it became known that the Central Bank (CB) is filing a lawsuit with the Moscow Arbitration Court against the Belgian depository Euroclear. The decision was made after the EU countries supported the indefinite blocking of Russian assets the day before. Details can be found in the Izvestia article.

The lawsuit against Euroclear

On Friday, December 12, the Bank of Russia published a press release, according to which the regulator is filing a lawsuit with the Moscow Arbitration Court against Euroclear for recovery of losses caused to the Bank of Russia.

The Central Bank explained that this decision was made in connection with the illegal actions of the Euroclear depository, causing losses to the Bank of Russia, as well as in connection with the mechanisms officially considered by the European Commission for the direct or indirect use of the assets of the Bank of Russia without its consent.

According to the press release, Euroclear's actions caused harm to the Russian regulator due to the inability to dispose of its funds and securities.

Indefinite freezing of Russian assets

On the eve of December 11, it became known that most of the EU countries agreed to the indefinite blocking of Russian assets. It was also reported that the decision was made on the basis of Article 122 of the Treaty on the European Union, according to which, in emergency circumstances, decisions can be made on the basis of a qualified majority, rather than unanimously. In particular, the Financial Times drew attention to the fact that with this approach, the European Commission (EC) will be able to bypass the veto from countries such as Hungary.

Earlier, Bloomberg reported that the EC hoped to convince Belgium to accept the expropriation of Russian money under the pretext of a "reparative loan." This would be possible if the EU countries decided to freeze assets for several years at once, rather than renewing the lock every six months.

After the information about the von der Leyen plan appeared, a number of countries and organizations spoke out against the unilateral confiscation of Russian assets. The European Central Bank (ECB) has repeatedly said that any legally improper use of assets can provoke an outflow of investors' capital from Europe, which means jeopardizing the financial stability of the eurozone.

As Elena Sidorova, head of the International Monetary and Financial Relations Sector at the IMEMO of the Russian Academy of Sciences, previously told Izvestia, such fears on the part of European bankers may come true, because confiscation would undermine the foundations.

"How can you trust them in financial matters later? That is why I assume that even with a qualified majority, there will be a problem with adopting the plan in the form in which it is currently announced," Elena Sidorova believes.

Russian assets in the West

After the start of Russia's special operation in Ukraine, the European Union and the G7 countries blocked about half of Russia's gold and foreign exchange reserves, a strategic reserve that ensures the financial and economic stability of the country.

The securities that belong to the Central Bank and are frozen are mainly government bonds of countries that have imposed sanctions. These include both short-term and long-term promissory notes, which must constantly receive coupon income, and at the end of their validity period they must be converted into currency. The exact composition of Russian securities, their income, and whether any of them have already been repaid have not been disclosed. It is also known that frozen assets do not include gold.

About 210 billion euros are in the EU, mostly in Euroclear accounts. In addition to Belgium, Russian assets are also held in Germany, France and Luxembourg. The exact amounts are unknown. According to various sources, Luxembourg may have up to 20 billion euros, but the Ministry of Finance of the country assures that they have only 10 thousand euros. France and Germany did not disclose the data, but the media reported figures of 19 billion euros and 210 million euros.

In addition, this term also refers to the property and accounts of individuals and companies, including individual investors who bought shares of foreign corporations on the stock exchange. According to approximate estimates, they amount to about $120 billion more, but there is no question of using these funds in any way.