Fraudulent operations: the EU wants to take Russian assets from Belgium under its jurisdiction

The European Union is planning to withdraw frozen Russian assets from Belgium to its structures, "Izvestia" found out. The scenario will simplify the distribution of responsibility between the countries of the bloc, but it will also entail new risks. The blocked funds can be transferred to the European Investment Bank or to one of the special funds, although it will be extremely difficult to do this, experts say. The difficulties with further financing of Ukraine are forcing the Europeans to look for ways to withdraw Russian funds, the Russian Foreign Ministry explained to "Izvestia". The EU's attempts to implement new initiatives threaten the loss of investment attractiveness, new losses, and even the seizure of its own assets.

Why can't the EU increase funding for Ukraine

Ukraine lacks a European loan of €90 billion, calculated until the end of 2027. Vladimir Zelensky has already requested an additional $27 billion from the EU to cover Kiev's needs before the new year. And the size of the resulting deficit came as a surprise to a number of European officials.

— It seems that the European Union, in its "trans-Ukrainian" fervor, objectively overestimated its capabilities and reached their limit in terms of meeting the ever-growing needs of the Kiev regime. Further financing of Ukraine is becoming an exorbitant burden for EU member states, which can no longer increase lending from national budgets and borrowings on capital markets," Vladislav Maslennikov, director of the Department of European Affairs at the Russian Foreign Ministry, told "Izvestia".

Photo: Global Look Press/IMAGO

According to him, it is largely due to the anti-Russian sanctions policy that the EU countries have found themselves in a difficult economic situation. Thus, the EU's GDP growth this year is expected to be only about 1%. The association is experiencing problems with competitiveness, the national debt and the state budget deficit are growing.

This and the frenzied greed of the Kiev regime caused another round of discussion about the seizure of Russian assets, Maslennikov stressed. At the same time, it is promoted by those countries in whose territory either nothing is stored or a small proportion of our funds is located.

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Brussels' goal is to keep the regime in Kiev as a constant threat to Russia.

Scenarios of confiscation of assets of the Russian Federation in Europe

Among such countries are Spain, the Netherlands, Poland and Sweden, which in late August called on Brussels to find a solution for the further use of Russian assets. Belgium, for example, where the lion's share of them is stored — about 180 billion euros, opposes it. Therefore, so far the European Union has been taking only a percentage of these reserves for Ukraine's needs.

—Belgium stands its ground, so the most likely scenario is the transfer of Russia's frozen assets from Belgian jurisdiction to EU jurisdiction," a European source told Izvestia.

Photo: Global Look Press/Alicia Windzio

We are talking about the transfer of Russia's holdings under the control of an existing or specially created financial structure of the European Union. In early September, the Ukrainian authorities, as well as a group of MEPs led by French representative Nathalie Loiseau, proposed such a move to the European Commission.

The main purpose of such a scenario is to distribute responsibility for the theft of Russian assets. It now falls entirely on Belgium and the Euroclear depository located there. Brussels is not giving its consent to the expropriation of Russia's frozen reserves due to fears of legal liability. In the case of the transfer of assets to the European financial structure, the entire European Union will deal with the claims.

Ekaterina Arapova, head of the MGIMO research program at the Russian Foreign Ministry, told "Izvestia" that Russia's assets could potentially be transferred to the European Investment Bank (EIB) or one of the EU's special funds. However, this is still too difficult, since it is necessary to develop a special legal framework to create a completely new structure, Arapova emphasizes. In addition, the idea of transferring Russian assets to another jurisdiction will meet resistance both at the level of EU member states and among financial companies. In particular, accepting blocked Russian assets will lower the EIB's investment rating.

Photo: IZVESTIA/Sergey Konkov

As the contradictions within the bloc grow, it is extremely difficult to do this. For example, on September 14, EU ambassadors unexpectedly encountered difficulties in the routine extension of sanctions against Russia. According to Politico, Slovakia, Italy, France and Croatia demanded that the restrictions against businessman Alisher Usmanov be lifted. And the unity of the EU in such a complex issue as asset confiscation is not guaranteed.

The withdrawal of Russia's frozen assets to another jurisdiction would, in fact, negate the guarantees for the preservation of another country's sovereign funds in Belgium, said Egor Sergeev, senior researcher at the MGIMO Institute of the Ministry of Foreign Affairs of Russia. In his opinion, Belgium would not be satisfied with such a scenario either. However, the issue of using Russian assets will be raised more and more often, and some kind of legal scheme may eventually be found, the expert does not exclude.

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Russia's retaliatory measures

Vladislav Maslennikov noted that the results of the last meetings of the European Council showed the lack of consensus within the EU on this issue and the unwillingness of a number of union countries to share collective responsibility for the "theft" of Russian assets. The diplomat stressed that if our reserves are expropriated, the consequences for the European Union will not be long in coming.

"Among them is a further decrease in the investment attractiveness of the EU countries, in whose territory international reserves are stored, directly depositories, which assumed obligations to ensure the safety of assets, as well as a loss of confidence in the European Union as a whole as a once decent economic partner," the diplomat noted.

Photo: Global Look Press/Zeno Druyts

The European Parliament is also aware of the risks. New discussions around the use of Russian assets are not a step towards peace, but a further escalation, French MEP Thierry Mariani stressed to "Izvestia".

— If this plan is implemented and then successfully challenged in court, or if it provokes retaliatory arrests of European assets abroad — which it will — it will not be the European Commission that will pay for it. European companies, European pensioners, and ordinary citizens will pay for this," Mariani stressed.

In May, the Moscow Arbitration Court fully satisfied the Bank of Russia's claim against Euroclear for damages from blocking reserves in the amount of 18.17 trillion rubles, including lost profits. The petition for the immediate execution of this verdict was also supported, and the European side's counterclaims for the suspension of enforcement proceedings were rejected. Ekaterina Arapova believes that based on this decision, it is possible to continue applying to the courts of friendly states, such as the UAE, China or Kazakhstan. Euroclear has accounts, securities and partner assets in their banks. And Russian lawyers may demand their arrest for debt collection.

The countries of the Global South are closely monitoring the actions of European regulators, fearing that similar sanctions mechanisms may be used against them in the future. If Belgium does decide to confiscate or transfer Russian assets, it will only accelerate the withdrawal of funds from its jurisdiction and the EU as a whole, Tigran Meloyan, an analyst at the HSE Center for Mediterranean Studies, told "Izvestia".

Photo: TASS/Geert Vanden Wijngaert

New scenarios for the appropriation of illegally frozen Russian assets in Europe obviously indicate difficulties with financing Ukraine. It is becoming more difficult to allocate new aid packages due to economic problems and voter discontent. Supporters of harsh measures against Russia are taking a significant risk for the future of Euroclear, which may face massive withdrawals.