Frozen Funds Dispute: Russia Moves Toward International Litigation

Russia is exploring the possibility of initiating court proceedings against the depository Euroclear in foreign jurisdictions over the freezing of Russian assets, Russian Ambassador to Belgium Denis Gonchar told RIA Novosti.

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European Union

Russia Claims Asset Freeze Violated Property Rights

Moscow maintains that the actions of European financial institutions were unlawful and breached fundamental principles of property protection. Russian authorities do not intend to leave such steps unanswered, as they view the situation as a systemic encroachment on the country's sovereign and commercial assets.

Russia formally outlined its position in detailed statements issued by the Bank of Russia on December 12, 2025. The regulator stressed that the asset freeze contradicts both international law and the contractual obligations assumed by European depositories in the course of their operations.

On the same day, the Russian central bank announced that it had filed a lawsuit with the Moscow Arbitration Court against Euroclear, seeking compensation for losses incurred by the Central Bank. The claimed damages amount to an unprecedented 18.2 trillion rubles.

Domestic Case Opens Path to International Litigation

The first court hearing took place on January 16. The court ruled that the proceedings would be held behind closed doors due to the sensitivity of the materials and the scale of the financial interests involved.

At the same time, Russian officials made it clear that the case may not remain confined to national jurisdiction. Authorities are assessing the feasibility of launching proceedings in foreign courts if such steps better serve Russia's interests.

An additional legal foundation for retaliatory measures emerged from a decree signed by Russian President Vladimir Putin on September 30, 2025. The document established a new framework for handling foreign capital held in federal ownership.

This mechanism directly links asset management decisions to the protection of national interests amid potentially hostile actions by Western states. As a result, Russia has built a legal toolkit designed for systematic, rather than ad hoc, responses within its own legislative framework.

Roots of the Dispute and Systemic Consequences

The conflict traces back to 2022, when European countries imposed sanctions on the National Settlement Depository. As a result, cash and securities belonging to Russian clients became blocked in the NSD's accounts at European depositories Euroclear and Clearstream.

Restrictions also affected NSD accounts held with foreign correspondent banks, impacting a wide range of financial market participants.

Against this backdrop, numerous Russian banks, companies, and private individuals filed lawsuits in Russian courts against Euroclear Bank in Belgium and Clearstream Banking in Luxembourg.

The current situation highlights a deep crisis in the previous model of international financial relations. The use of core financial infrastructure as a political pressure tool undermines the principle of neutrality in settlement systems.

Russia's response follows a clear logic. The state seeks to protect its assets and establish legal precedents that could alter the balance of power in the global financial system.

A consistent judicial strategy allows Moscow not only to pursue specific claims but also to signal that arbitrary asset seizures under sanctions pretexts remain unacceptable. Russia's legal actions aim at systemic protection of sovereign assets and the restoration of legality in international finance.