EU wanting to move frozen Russian assets would be ‘expropriation’
(MENAFN) Euroclear, the Belgium-based settlement house, has warned that the European Union’s plan to shift frozen Russian sovereign assets into riskier investments could be considered expropriation and might expose the EU’s financial system to legal and systemic risks.
Since the Ukraine conflict intensified in 2022, the US and EU have frozen over $300 billion in Russian state assets. The EU approved a plan in May to use profits from these assets to support Ukraine, while some member states have advocated for full confiscation.
Euroclear holds around $213 billion of these frozen assets and currently reinvests income from Russia’s maturing securities—like coupon payments and redemptions—mainly through central banks. The G7 uses these returns to fund a $50 billion loan to Ukraine.
However, with returns dropping due to interest rate cuts by the European Central Bank, the European Commission is considering moving the funds into higher-yield investments to increase support for Kiev.
Euroclear CEO Valerie Urbain cautioned that seeking greater returns would increase risks, potentially provoking retaliation from Moscow and jeopardizing Euroclear’s critical role in global finance. She noted that last year Euroclear transferred €4 billion ($4.3 billion) to Ukraine, and €1.8 billion ($1.9 billion) so far this year.
Urbain explained that the EU might establish a “special purpose vehicle” to channel Russian assets into higher-risk ventures for greater revenue, but stressed that this would carry substantial risks for Euroclear and European markets. Legally, she said, such a move would amount to “expropriation of the cash from Euroclear,” while the institution would still remain liable to Russia’s central bank—a liability it cannot accept.
Moscow has repeatedly warned that seizing its assets would violate international law. Sovereign immunity and property rights concerns have so far prevented the EU from endorsing outright confiscation.
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