Dmitry Medvedev, the deputy chairman of Russia's Security Council, warned that if the European Union takes frozen Russian assets, then it may be considered by Moscow as tantamount to an act justifying war', Reuters reported.

If the crazy European Union does, after all, try to steal Russian assets frozen in Belgium under the guise of a so-called ‘reparations loan’,

(Photo Sputnik-Medvedev in Dubna, Russia, June 2024)

Russia may well view this move as tantamount to a casus belli with all the relevant implications for Brussels and individual EU countries," Medvedev added.

As Reuters notes in a relevant report, the European Commission proposed on Wednesday an unprecedented use of frozen Russian assets or international borrowing to raise 90 billion euros ($105 billion) for Ukraine to cover its struggling military and basic services.

The European Union's executive body has declared it favours a "reparations loan" using Russian state assets immobilised in the EU due to Russia's invasion of Ukraine. But Belgium, which holds most of the assets and has voiced a range of legal concerns, is not convinced by the proposal.

Meanhwhile, European Central Bank President Christine Lagarde sais that the European Commission's proposal to use Russian central bank assets to extend reparations loans to Ukraine is a stretch from a legal and financial point of view.

The ECB recently refused to backstop a 140 billion euros payment to Ukraine, undermining the EU plan to raise a “reparations loan” backed by frozen Russian assets, the Financial Times reported on Tuesday.

According to a Financial Times report, the ECB concluded that the Commission proposal violated its mandate, the newspaper said, citing multiple officials, adding to Brussels’ difficulties in raising the loan against Russian central bank assets immobilised at Euroclear, the Belgian securities depository.

Top Russian banker Andrei Kostin told Ria news agency that Moscow would retaliate if the European Union used frozen Russian sovereign assets for a loan to Ukraine, and said Moscow could unleash half a century of litigation over the money.

The Financial Background to the Frozen Assets Efforts

The European Union and the United Kingdom can move to confiscate the sovereign Russian funds frozen in their jurisdictions since 2022.

Most importantly, as Reuters notes, they can seize the 185 billion euros ($214.8bn) frozen at the Belgium-based clearing house Euroclear – the majority of which is now in cash and can thus rapidly be deployed or reinvested – as well as the Russian government funds frozen at Euroclear’s Luxembourg-based rival, Clearstream, which are estimated to amount to around 20 billion euros ($23.2bn).

The Euroclear assets have already been used to underpin an earlier $50bn (43 billion euros) loan to Ukraine finalised in January 2025, which is secured over earnings from those assets.

Europe had been expected to advance a plan to create a new loan – one amounting to as much as 140 billion euros ($162.6bn) – secured over the assets at the European Council meeting on December 18-19, after delaying a final decision at the previous council meeting on October 23. The delay was largely due to obstinacy from the Belgian government, which has demanded indemnification from the rest of Europe while endorsing Kremlin talking points that such a move would be unprecedented.

Yet there is ample precedent. German and Japanese government assets were seized by the United States in the course of the second world war. In the latter case, Japan’s assets were even frozen before the attack on Pearl Harbour, the majority of which were later retained under the San Francisco Peace Treaty of 1951.

There are currently dozens of unresolved claims worth tens of billions of dollars against Russia in European courts — including the roughly 13-billion-euro ($15bn) arbitration award won by energy firm Uniper against Gazprom for disruption to gas supplies in 2022.

The largest and most significant case remains the 2014 award to former shareholders of Yukos, over the Kremlin’s expropriation of their company.

That award survived all appeals: in October 2025, the Supreme Court of the Netherlands rejected Russia’s final challenge, confirming that the award — now valued at more than $65bn, including interest — is final and enforceable against Russian state assets worldwide. Enforcement, however, will still depend on locating suitable Russian assets that courts are willing and able to seize.

The Kremlin will certainly engage in lawfare and litigation over these disputes, as it has repeatedly throughout Putin’s tenure. But it will lose, and when its national interests are at stake, it will pay.

As Reuters stressed, Russia has repeatedly complied with adverse rulings when vital access to Western markets or assets was at stake. The only clear-cut cases of either the West or Russia returning funds owed as a result of litigation arising from Russia’s war have been the settlements paid by Russian state insurer NSK and aviation firm Aeroflot over Putin’s 2022 seizure of aircraft leased from Western companies.

There is no excuse for Europe’s delays in acting thus far. Every month of inaction increases both the financial burden on Europe and the likelihood that Washington will strike a deal that sidelines European interests. The question is now a critical one: how to ensure Ukraine’s continued financing and its ability to sustain its defence. It is also all the more important that Europe act before the Trump Administration tries to secure a deal with the Kremlin over its head.

REUTERS

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