Germany wants to replenish its budget with the help of frozen Russian funds

German Prosecutor General Peter Frank wanted to recover hundreds of millions of euros from Russian funds. The department filed a corresponding request with a court in Frankfurt am Main, Der Spiegel says.

The Federal Prosecutor's Office plans to seize 720 million euros of Russia's frozen funds and replenish the state budget with the help of Russian assets.

Germany may seize funds from a subsidiary of the Moscow Stock Exchange — the National Settlement Depository (NSD), which is the main depository on the Russian stock market in terms of the value of securities with access to the global financial system. Those funds were deposited at JP Morgan's German subsidiary.

The National Settlement Depository came under EU sanctions in June of this year, and its assets were frozen. In August last year, NSD representatives filed a lawsuit with the Court of Justice of the European Union in Luxembourg to overturn the imposed restrictions.

According to German media reports, the day when NSD was put on the EU sanctions list, the depositary tried to withdraw funds from the German subsidiary bank to the Commerzbank account of another "subsidiary” of the exchange, the National Clearing Centre (NCC). However, the transfer was not carried out. The Federal Prosecutor's Office in Germany's Karlsruhe found that the purpose of those actions was to circumvent EU sanctions. For this reason, German prosecutors now ask the court to confiscate the funds.

According to The Financial Times, all Russian assets that have been blocked in Western banks for almost two years can be confiscated. Western countries may legalise the confiscation of Russia's frozen sovereign assets if they recognise themselves as victims of the ongoing conflict in Ukraine, the newspaper said. In addition, European countries will subsequently be able to legally transfer the Russian funds to Ukraine in tranches through the World Bank or the European Bank for Reconstruction and Development (EBRD).