The Bank of Russia has initiated legal action against the European Union for maintaining the freeze on its state assets as collateral indefinitely in connection with a €90 billion loan to Ukraine.
The lawsuit will serve as a trial for the unusual emergency authority that the European Commission employed the previous year to place a freeze on Russian state assets totaling approximately €210 billion throughout the European Union.
This action, approved by a qualified majority, effectively invalidated any potential objections from EU member states with strong ties to the Kremlin, including Hungary.
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In mid-December, European Union leaders made the decision to increase shared debt in order to supply financial support to Kyiv for defense against Russian aggression, excluding Hungary, Slovakia, and Czechia.
Ukraine is obligated to repay the loan only after the conflict is concluded and Moscow compensates for war damages.
Should the Kremlin decline, EU leaders retain the authority to utilize the frozen assets' monetary worth for reimbursement. The Bank of Russia strongly denounced the EU's actions towards its sovereign assets, labeling them as unlawful.
The regulation was criticized for infringing on fundamental rights such as access to justice and the principle of sovereign immunity for states and their central banks. The central bank contended that the Council of the EU had breached its own procedures by implementing the measure through qualified majority rather than unanimity.
The Commission intends to release a formal response to the legal action initiated by the central bank at the General Court of the European Union in Luxembourg.
In the previous year, the central bank of Russia initiated legal action in Moscow against the financial depository Euroclear, which is headquartered in Brussels and holds the majority of Russia's assets that have been frozen under EU sanctions following Russia's invasion of Ukraine in 2022.
The assets in question were placed on hold as a result of sanctions implemented by the EU following Russia's military intervention in Ukraine in 2022. The legal proceedings that were scheduled to take place in Moscow in January were postponed until this week following an unsuccessful attempt by Euroclear's lawyers to have the case thrown out.
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At the request of the Central Bank, the hearing was conducted in a closed setting, without public access. According to legal experts consulted by Reuters, should Russia succeed in the aforementioned legal matter, it may seek to take possession of Euroclear's assets located in nations like China, the United Arab Emirates, and Kazakhstan.