The European Commission expects Russia to launch “speculative” legal proceedings to test the robustness of sanctions against the Bank of Russia imposed by the European Union since Russia’s military attack on Ukraine in February 2022, the European Commissioner for Economy, Valdis Dombrovskis, said on Friday 12 December, while the Russian central bank began legal proceedings against Euroclear in Moscow the same day.
In accordance with the EU sanctions regime, the assets of the Bank of Russia held in the European Union, including in central securities depositories (CSDs) such as Euroclear, “are not seized and the principle of sovereign immunity is respected”, declared Mr Dombrovskis at the end of the Economic and Financial Affairs Council.
He said that European financial institutions holding frozen Russian public assets were “fully protected from legal proceedings”. He stressed that “central security depositories can offset any seizure in Russia with frozen or immobilised assets held here” in Europe. And the proposals on the table to continue financing Ukraine in 2026 and 2027 will strengthen the protection of EU financial institutions.
According to our information, Euroclear, which holds €185 billion in assets from the Bank of Russia, has a claim of €16-17 billion against the Russian central securities depository. The latter holds a claim of €30 billion on CSDs established in the EU.
On Friday, the Council of the EU confirmed the adoption, by a qualified majority of Member States, of the Regulation prohibiting the transfer of frozen Russian public assets outside the EU (see EUROPE 13771/7). Two countries opposed it.
From the point of view of the Danish Presidency of the EU Council, this process is a way of putting the freezing of Russian assets “on a more safe footing” and fulfilling a request from the European Council, said Danish Finance Minister Stephanie Lose. She reported “broad support” from the Member States for anticipating the adoption of the regulation forming part of the legislative package designed to continue EU funding to Ukraine in 2026 and 2027 (see EUROPE 13765/1).
On Thursday, Hungary denounced a manoeuvre to circumvent the unanimity rule in the EU Council required for the adoption of sanctions in the area of foreign affairs.
Slovakia may also have opposed the early adoption of the regulation. In a letter to the President of the European Council, Slovak Prime Minister Robert Fico informed António Costa that he was “not in the position to support any solution to Ukraine’s financial needs that would include covering Ukraine’s military expenses for the coming years”.
Stressing his “constant” political approach to the search for peace, Mr Fico said he was unable to vote in favour of continuing the war in Ukraine. He also felt, as did his Belgian counterpart Bart De Wever before him, that the use of all Russian public assets could “directly threaten the United States’ efforts for peace”. And he promised that his country would continue to support Ukraine bilaterally, particularly on humanitarian issues, and in its bid to join the EU.
See Robert Fico’s letter: https://aeur.eu/f/jz0 (Original version in French by Mathieu Bion)