Euroclear to Pay Out $3.4B to Western Investors Hit by Russian Asset Seizures

Belgian clearing firm Euroclear plans to seize and redistribute about €3 billion ($3.4 billion) of Russia’s frozen sovereign funds and compensate Western investors after Moscow seized cash held in Russia in recent months, Reuters reported. 

Euroclear will redirect the cash from a pool belonging to Russian entities and individuals hit by EU sanctions following Moscow’s 2022 invasion of Ukraine, Reuters wrote, citing its sources. 

Western companies whose cash was confiscated by the Russian government pressed Euroclear to release money to compensate them, Reuters added. 

However, interest from $280 billion of Russian sovereign assets, frozen by Euroclear as a response to the Russian invasion of Ukraine in 2022, already serves another role. They are used to compensate Ukraine for the estimated half a trillion dollars’ worth of damage caused by the war. 

Interests from Russian assets were used to design the ERA loan – G7 aid to Ukraine’s state budget and defense needs that Ukraine should not repay. 

Euroclear notified clients on April 1 that it will pay the compensation; Reuters wrote citing a document that said: 

“We received authorization from our competent authority, to unfreeze the compensation amounts and make these available to our participants.” 

Euroclear is regulated by the Belgian government. 

Foreign companies in Russia have lost $167 billion since the beginning of the full-scale invasion of Ukraine. The losses were caused by asset write-offs, unfair court decisions, and business seizures. 

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Nearly $57 billion was lost by companies whose assets were confiscated by Russian authorities or transferred to local entities and state institutions.

Reuters wrote that such a move provoked criticism among the relevant experts. One of them called such a move “morally reprehensible”. 

It also means that Europe will need to pay for Ukraine’s damage compensation from its own wallet, as the pile of Russian money will decrease because of Euroclear’s decision.