Euroclear boss issues new warning against West seizing Russian assets

RT
Sat, 25 Jan 2025 09:22 UTC

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Asset freeze

A response from Moscow could further destabilize EU financial markets, the CEO of the clearinghouse has said.

Outright confiscation of the Russian assets currently frozen by the West as part of Ukraine-related sanctions could lead to unintended consequences for the EU, Euroclear CEO Valerie Urbain warned on Friday in an interview with Bloomberg.

The Belgian-based depository holds around $213 billion (€197 billion) of nearly $300 billion of Russian central bank assets that were frozen by the US and EU shortly after the escalation of the Ukraine conflict in February 2022.

"There could always be also countermeasures from Russia which could further destabilize the financial markets," Urbain told the news agency on the sidelines of the World Economic Forum in Davos, Switzerland.

The Euroclear CEO said the frozen funds could be used as leverage in potential peace talks between Moscow and Kiev, while noting that some officials are interested in pushing ahead with confiscation. Urbain stressed the importance of transferring not only the funds, but the liabilities as well, in the event of expropriation by EU members, explaining that the clearinghouse should be protected from potential claims by Russia.

In December, the CEO cautioned that tapping either the Russian assets or the proceeds generated by them, which has been debated by EU and G7 officials for nearly three years, could jeopardize the euro's role as a global reserve currency and the broader stability of EU finances.

Kiev has been urging its Western backers to seize Russia's sovereign assets in order to fund Ukraine's military and reconstruction efforts. While the administration of former US President Joe Biden supported the proposal, some EU allies ruled out the move, citing the potential impact on the financial system and the euro's reputation.

In July, the European Commission said it was ready to transfer the first tranche of €1.55 billion generated from the Bank of Russia's frozen assets to Ukraine.

Moscow has condemned the asset freeze as "theft," arguing that accessing the funds would be illegal and set a troubling precedent. Kremlin spokesman Dmitry Peskov has warned that the Russian government will pursue legal action against those involved in the seizure.

Comment: Turnabout is fair play:

Russian authorities are drafting a new bill allowing for the seizure of assets belonging to Western states that have illegally confiscated Moscow's property and funds, newspaper Izvestia reported on Tuesday, citing documents prepared by the government legislation commission.

The draft bill outlines the legal procedure and emphasizes that targeted foreign assets will be transferred into Russian state ownership after a ruling by a court of arbitration. The list of properties and funds subject to seizure will be compiled by the country's commission on foreign investments.

In May, Russian President Vladimir Putin signed a decree laying the groundwork for confiscating assets of US companies and individuals to compensate for any Russian assets expropriated by Washington.

If adopted, the broader legislation will target "unfriendly" Western states and related individuals, allowing Moscow to seize assets as reimbursement for financial damages incurred by Russia from the illegal confiscation of its funds and properties, the draft legislation reads. The commission will reportedly review the draft bill as soon as next week.

Vedomosti newspaper has cited two sources as saying that the bill was drafted by the country's Ministry of Justice and was included in the commission's agenda on January 20. Izvestia noted that the document has been approved by the relevant authorities, including the Bank of Russia, the Finance Ministry, the Economy Ministry and the Ministry of Foreign Affairs.