EU to seize billions in Russian assets to compensate Western investors – Reuters
The Euroclear depository will seize and redistribute about EUR 3 billion of frozen Russian assets. The money will be used to compensate Western investors after Moscow seized their funds in Russia, Reuters reports, citing sources.
“Euroclear plans to seize and redistribute about EUR 3 billion [$3.4 billion] of Russia's funds that are frozen at the Belgian clearing firm after Moscow grabbed investor cash in Russia, according to documents seen by Reuters and people familiar with the matter,” the agency reports.
The money will be used to compensate Western investors after Moscow seized cash held in Russia in recent months, three people said, escalating attempts by both sides to recoup billions in funds affected by the war in Ukraine. Euroclear will redistribute 3 billion from a pool of EUR 10 billion in cash belonging to Russian entities and individuals hit by European Union sanctions following Moscow's 2022 invasion of Ukraine, two of the people said.
This is the first time that European authorities have allowed funds to be sent to Western investors under changes to the EU sanctions regime that came into effect late last year. The West has previously sent Ukraine interest on frozen Russian assets, a move that has angered Vladimir Putin.
Euroclear received permission in March from Belgium, its main legal authority, to make the payment, according to people familiar with the matter. Euroclear notified clients of the upcoming payments in a letter dated April 1.
Reuters was unable to identify the Russian owners whose assets will be seized. The Belgian government declined to comment, and Russia’s finance ministry did not respond to a request for comment.
Euroclear said it was imposing sanctions but that it was not making decisions about the form of the sanctions or whether to lift them.
The European Union froze hundreds of billions in Russian assets, including central bank reserves, after Russia’s invasion of Ukraine in February 2022, an unprecedented move that has been the biggest punishment yet for Russia. Euroclear holds the lion’s share of Russia’s sanctioned wealth in Europe, more than EUR 180 billion. Getting that money back is crucial for Moscow, and has led to about 100 lawsuits against Euroclear, one of the sources said.
Moscow warned last year that it would retaliate if its frozen assets were seized and used for Ukraine, and earlier this year amended the law to allow it to do so. Moscow has reportedly withdrawn EUR 3 billion in cash held by Euroclear in a depository in Russia in recent months to compensate Russian investors hit by Western sanctions.
Clearstream, a division of the German stock exchange that, like Euroclear, holds securities such as stocks and bonds for traders, also found itself in a similar situation.