EU to seize billions in Russian assets to compensate Western investors – Reuters
Photo: The EU will return 3 billion euros from Russian assets to Western investors (Getty Images)
Euroclear will seize and redistribute around €3 billion in frozen Russian assets. The money will be used to compensate Western investors after Moscow seized their funds in Russia, Reuters reports.
Europe’s response to Moscow’s actions
The funds will be distributed to Western investors who have been hit by asset seizures in Russia in recent months.
The move is the EU’s response to Moscow’s actions and marks a new level of economic confrontation, three sources said.
The money is worth €3 billion out of a total of €10 billion belonging to Russian individuals and entities that have been hit by EU sanctions since Russia’s full-scale invasion of Ukraine in 2022.
Changes in EU sanctions policy
This is the first time that European authorities have allowed funds to be channeled to Western investors, based on changes to the EU sanctions regime that came into force at the end of last year.
Previously, the West had been channeling interest in frozen Russian assets to Ukraine, which Vladimir Putin was extremely unhappy with.
Decision approved by Belgium
Euroclear received permission from Belgian authorities in March to make these payments. The company informed clients in an April 1 newsletter.
"We received authorisation from our competent authority, to unfreeze the compensation amounts and make these available to our participants," the document says.
The identities of the Russian owners of the assets subject to confiscation are not disclosed.
Political and moral issues
The decision to pay compensation to Western investors from Russian funds has been criticized by many experts.
"To seize Russian assets and give them to Western investors would be morally reprehensible," said Jacob Kirkegaard, a sanctions expert at the Peterson Institute in Washington.
He noted that this is a political decision in favor of corporations, not taxpayers, and indicated that such funds should go to the reconstruction of Ukraine.
European Union freezes hundreds of billions
The EU has frozen hundreds of billions of euros in Russian assets, including the Central Bank’s reserves, after Russia’s full-scale invasion of Ukraine. This was the largest sanction measure in the bloc’s history.
Over 180 billion euros of Russian assets are under the control of Euroclear. Russia has filed about 100 lawsuits against the company, seeking to return the frozen funds.
Moscow’s corresponding measures
Last year, Moscow withdrew 3 billion euros stored in a Russian depository on behalf of Euroclear, in favor of Russian investors who have suffered from Western sanctions.
Sources reported that it is a mutual exchange: frozen funds of Western investors in Russia are compensated for by assets of Russian investors in the EU.
Against the background of the fourth year of sanctions and ongoing strikes on Ukraine, Moscow seeks to regain control over its assets. At the same time, negotiations between the US and Russia on a possible end to the war are taking place without the active participation of Europe.
The amount of frozen Russian assets in the Euroclear depository (Belgium) is 183 billion euros. In 2024, interest on cash balances on assets subject to sanctions against Russia amounted to approximately 6.9 billion euros.
