Russia is preparing to take legal action against Euroclear, a Belgium based financial clearinghouse based in Hong Kong, and potentially Dubai. This action is in response to a Russian court’s order to recover nearly 15 billion rubles (approximately $185 million) from Euroclear in a case initiated by First Asset Management, which was previously a division of Sberbank. The legal action directly responds to the international sanctions imposed on Moscow in the aftermath of the Ukraine conflict. These sanctions have significantly restricted Russian investors’ access to their assets held in Western institutions.
Core Concerns
Euroclear holds approximately $200 billion of the roughly $300 billion in Russian central bank assets that have been frozen by European sanctions. In retaliation, Russia has frozen Western assets within its borders, resulting in a complex web of legal claims and blocked funds. This situation intensified as Euroclear disclosed its intention to allocate approximately $3 billion in interest earned on frozen Russian assets to Ukraine’s assistance. Russian officials have denounced these actions as theft and have issued threats of both symmetrical and asymmetrical countermeasures.
Russia’s Legal Approach
Euroclear’s assets in Hong Kong and Dubai, where the company maintains operations outside of EU jurisdiction, are the focus of Russia’s strategy. Aiming to capitalize on local tribunals that operate under legal frameworks that are not subject to EU law, Russia is pursuing lawsuits in these jurisdictions. If the Russian claimants are successful, they could obtain court orders in Hong Kong to block Euroclear’s assets up to the value of their claims. Such orders would prevent the company from moving or using the funds while the litigation is ongoing. This strategy is intended to inflict financial and reputational harm on Euroclear and, by extension, the European financial system, in addition to recovering lost Russian assets.
Potential Consequences
This legal offensive has the potential to have substantial repercussions. Euroclear is a critical component of the global financial infrastructure, managing trillions of dollars in assets for governments, institutional investors, and individuals worldwide. The company’s capacity to resolve transactions and fulfill its obligations to clients could be disrupted if the assets of Euroclear are frozen by courts in Hong Kong or Dubai. This disruption has the potential to intensify financial instability by inciting a series of lawsuits from Western banks and investors whose funds are restricted by Euroclear. The EU may be required to recapitalize Euroclear in the event of significant losses, or the Belgian central bank could potentially revoke its license, which would pose a risk of a broader financial crisis due to Euroclear’s extensive holdings.
The global financial system’s confidence could also be eroded by the situation, which could establish a precedent for the politicization of international settlement structures and the security of sovereign reserves. In response to the increasing geopolitical tensions, Hong Kong authorities are already taking steps to reduce their dependence on Western financial infrastructure by establishing alternative settlement systems.
European Response
In March 2025, the European Union authorized Euroclear to seize and redistribute approximately €3 billion from the frozen Russian assets to compensate Western investors as part of its efforts to resolve the situation. This decision, which has been approved by Belgian regulators, is a direct response to Russia’s expropriation of Western-owned assets within its borders and a significant policy shift. The legal framework for this action was established in the EU’s 15th sanctions package, which was ratified in December 2024. This package explicitly allowed the use of frozen Russian private assets to compensate European investors for the first time. In the past, the EU had restricted its support for Ukraine to the interests derived from these assets. Euroclear has emphasized that it is adhering to EU law by enforcing sanctions while also advocating for the retention of a portion of the “extraordinary” profits as a reserve against prospective litigation costs. The EU required Euroclear to segregate these profits and refrain from distributing them to shareholders. Belgium imposed a 25% corporate tax on these earnings while also sharing some revenue with Ukraine.
This method has incited discussion among European policymakers. Critics contend that the decision to compensate Western investors rather than channel all funds toward Ukraine’s reconstruction demonstrates the prioritization of corporate interests over the broader public welfare. Others perceive it as an unprecedented and essential asymmetrical response to Russia’s aggressive conduct. EU officials are closely monitoring the situation because many legal cases remain unresolved, the sanctions regime requires periodic unanimous renewal among member states, and they acknowledge the risks of further retaliation from Moscow.
Expanded Context
The current legal dispute is a significant escalation in the financial dispute between the West and Russia. The legal and political repercussions of utilizing suspended Russian funds have prompted high-level discussions within the European Union and G7 as a result of the ongoing dispute. Euroclear’s leadership has publicly expressed concern that the confiscation of Russian assets could undermine trust in the company, European capital markets, and the euro. Legal experts have observed that the EU and Euroclear may be subject to protracted litigation and additional retaliation from Russia if they attempt to redistribute these assets forcibly without a clear international mandate.
Euroclear’s substantial funds in Russia, which Moscow has prohibited from repatriation, further complicate the situation. This fact has provided Russian negotiators with additional leverage. Russia aspires to retaliate against Western efforts to utilize its suspended reserves by targeting Euroclear’s overseas assets in addition to recovering lost funds. The stability of the international financial system, the credibility of global clearinghouses, and the future of cross-border asset security could all be significantly impacted by the results of these actions.