The Central Bank has filed a lawsuit over the freezing of Russian assets. What you need to know

The Bank of Russia has appealed to the Moscow Arbitration Court to recover damages from the Belgian Euroclear depository, which holds 180 billion euros of frozen assets of the regulator. At the same time, the Central Bank is considering the option of bringing the dispute to the level of international instances, followed by an attempt to achieve recognition and enforcement of their decisions in the UN member countries. Why the Central Bank took this step is in the Izvestia article.

Reasons for the claim

• The Bank of Russia has announced that it has filed a lawsuit with the Moscow Arbitration Court against the Belgian Euroclear depository, where frozen Russian assets are stored. The Central Bank is seeking compensation for the damage caused by the blocking of its assets by the European Union and the mechanisms discussed there for using blocked funds without Russia's consent.

• The cumulative damage includes the amount of frozen assets, the value of blocked securities, and lost profits. There is no exact information about this amount, but the expert community estimates it at about 15 trillion rubles.

• At the same time, the Central Bank is exploring the possibility of bringing the dispute to international jurisdictions in order to seek recognition and enforcement of the decisions of such instances in the UN member states. The regulator calls the European Commission's intention to keep the Central Bank's funds frozen and provide an opportunity to use the Bank of Russia's assets in the interests of third-party recipients the basis for the claims.

• The Central Bank also warned that Russia has the right to use the full range of available legal instruments to protect its interests without prior notice. The regulator intends to appeal against any steps taken by the European Commission that may lead to the use of Russian assets without its consent.

• The moment of filing the lawsuit is connected with the intensification of attempts by European leaders to gain access to Russian funds. The funds remain the property of Russia, but at the moment they are frozen and unavailable for disposal. The main significance of this lawsuit is to warn European countries about the consequences that the illegal use of Russian assets will entail.

• Filing a claim also creates reputational losses for Euroclear and shows that the actions of the depository can be challenged in court. This is important for both current and potential customers. In addition, the litigation will reduce the level of confidence in the eurozone for investors.

What can the case lead to?

• The process between the regulator and Euroclear in the Russian arbitration will take a long time. At the same time, the probability of a decision in favor of the Bank of Russia is very high.

Europe has cornered itself with the desire to take away Russian assets. Analysis

• Russia may try to obtain compensation through its courts, demanding damages from European organizations, and it is possible to write off their property in Russia, including large amounts in "C" type accounts. At the same time, the Bank of Russia has not published detailed data on the current volume of such funds since last year. They are constantly changing due to new arrivals and internal redistribution.

• The EU's likely retaliatory steps could prolong asset disputes. As a result, it is extremely difficult to assess the exact scale of possible penalties, so the situation has to be considered through a set of separate scenarios and assumptions. Euroclear has already announced that they are ready to defend themselves in Russian courts on claims related to the blocking of Russian assets.

• Russia believes that the EU's plans for Russian assets will lead to the dismantling of the Bretton Woods system. This financial and monetary system was created in 1944 to restore the global economy after World War II. It was based on the US dollar, pegged to gold, and national currencies were fixed to the dollar within established limits, with the obligation of central banks to maintain parity.

When writing the material, Izvestia took into account the opinions of:

• Gleb Boyko, an attorney at the NSP Law Office;
• Head of the Alexander Abramov Presidential Academy Laboratory for Analysis of Institutions and Financial Markets;
• Inna Litvinenko, Candidate of Economic Sciences, Associate Professor of Economics and Management at the Russian State University of Social Technology;
• Anna Fedyunina, Associate Professor at the HSE Faculty of Economics.