The Russian Central Bank has taken a bold legal step, filing a lawsuit against the European Union for the indefinite immobilization of its sovereign assets, valued at a staggering €210 billion. This move comes in response to the EU's decision last year, which aimed to strengthen its leverage in negotiations to end the war in Ukraine and prevent Russia from accessing these funds for its own gain. The assets, held at Euroclear, a Brussels-based depository, are already the subject of a lawsuit by Moscow, highlighting the contentious nature of this dispute.
The legal action was submitted to the EU's General Court in Luxembourg on February 27th and announced on Tuesday morning. The Russian Central Bank argues that this long-term immobilization violates fundamental rights, including the right to access justice, property inviolability, and the principle of sovereign immunity of states and their central banks, as guaranteed by international treaties and EU law. This challenge to the rule of law has sparked intense debate.
The regulation in question was agreed upon by member states in December, during intense negotiations to provide Ukraine with €90 billion in fresh assistance. This long-term immobilization was implemented under Article 122 of the EU Treaties, a provision used in past economic emergencies, including the COVID-19 pandemic and the energy crisis, and requires a qualified majority. The European Commission, in a novel interpretation, argued that Russia's war has caused a 'serious economic impact' for the EU, triggering supply disruptions, uncertainty, and countless hybrid attacks.
The EU's ban on the €210 billion release is conditional, requiring Russia to cease its war of aggression, provide reparations to Ukraine, and no longer pose a 'serious risk of severe difficulties' to the European economy. Given Russia's refusal to compensate Ukraine, the funds may never be released, as the EU is sending a strong signal to Russia that its costs will rise as long as the war continues. This message also reinforces Ukraine's strength on the battlefield and at the negotiating table.
The Russian Central Bank further claims that Brussels committed serious procedural violations by using a qualified majority under Article 122, which contradicts the unanimity required for foreign policy decisions. Hungary, an opponent to Ukraine aid, shared similar concerns. The Commission has yet to respond to the new lawsuit, having previously dismissed Moscow's suit against Euroclear as 'speculative' and groundless. The regulation currently forbids the recognition and execution within the bloc of any claim made in connection with the immobilization of Russian assets, adding another layer of complexity to this legal battle.
