Russia’s central bank said on Thursday that it plans to broaden its legal response beyond its lawsuit against Belgium-based depository Euroclear and seek damages from European banks in a Russian court over attempts to use frozen Russian assets to help Ukraine.
“In view of the European Union authorities’ ongoing attempts to unlawfully seize and use assets held in EU financial institutions without the consent of the Bank of Russia, including through the permanent immobilization of its assets, the Bank of Russia, in line with its previously stated position on safeguarding its interests, announces that it will seek to recover damages from European banks in Russian arbitration courts,” the bank said in a statement.
Any compensation sought would “correspond to the value of assets illegally blocked and used, as well as the resulting lost profits,” it added.
In comments to Bloomberg, the central bank said it would not yet name possible defendants, explaining only that they are “institutions that unlawfully retain and block the Bank of Russia’s ability to dispose of its assets.”
The statement follows last week’s announcement that the Bank of Russia had filed a claim against Euroclear, which holds most of the country’s immobilized foreign reserves.
“The actions of Euroclear depository caused damage to the Bank of Russia due to the inability to manage funds and securities belonging to the Bank of Russia,” the bank said in a statement at the time. A preliminary hearing in the case is scheduled for Jan. 16.
The legal steps come as the European Commission presses ahead with plans to draw on about €200 billion ($232 billion) in Russian central bank assets frozen after Moscow’s 2022 invasion of Ukraine, with an initial package of roughly €90 billion envisioned over two years.
Russian officials have also discussed offsetting any losses by tapping assets in Russia held by foreign institutions, including the European Bank for Reconstruction and Development, Norway’s sovereign wealth fund and Dutch pension manager APG, according to people familiar with the matter cited by Bloomberg.
Moscow has repeatedly warned of consequences for the EU – and Belgium in particular – over the frozen assets proposal, which has been described as a “reparations loan” because Ukraine would not be required to repay the funds unless it later received reparations from Russia.
On Wednesday, The Guardian reported that Russian intelligence operatives had employed “tactics of intimidation” aimed at Belgian politicians and senior financial executives in an effort to derail the plan.
It came after Bart De Wever, the Belgian prime minister, said in an interview with La Libre newspaper: “And who believes that Putin will calmly accept the confiscation of Russian assets? Moscow has let us know that in the event of a seizure, Belgium and I personally will feel the effects for eternity.”
At crunch talks in Brussels on Thursday aimed at finalizing the proposal, EU officials said that they were optimistic that an agreement could be found, as discussions were projected to continue late into the night.
However, De Wever said earlier in the day that unresolved “deal breakers” remained, adding “there can be no flexibility on issues that threaten the financial security of Euroclear and Belgium.”