THE HAGUE, Netherlands — European Union leaders are navigating complex legal terrain as they deliberate utilizing frozen Russian central bank assets to finance Ukraine’s military and reconstruction needs. With approximately €200 billion immobilized primarily within Belgium’s Euroclear financial clearinghouse, the proposal represents both a strategic financial solution and a legal minefield.
The discussion centers on creating legally impregnable mechanisms to repurpose these assets as loan collateral for Ukraine. Belgian authorities have emerged as pivotal voices, demanding absolute protection from retaliatory measures before approving any action. Prime Minister Bart de Wever emphasized the necessity of addressing financial risks stemming from the 1989 bilateral investment treaty between Belgium and Russia.
Moscow has already initiated legal countermeasures, with Russia’s Central Bank filing a lawsuit in Moscow’s Arbitration Court against Euroclear. The complaint challenges what Russia terms “illegal blocking and use of its assets” including claimed lost profits. However, European sanctions effectively neutralize Russian court judgments regarding frozen assets.
Legal experts identify multiple potential challenge avenues for Russia, each with significant limitations. The bilateral investment treaty offers limited arbitration options primarily designed for private investor disputes rather than state-level asset conflicts. Russia could attempt litigation in domestic courts worldwide where assets are held, but this would require waiving sovereign immunity—creating vulnerability to counter-litigation.
The Court of Justice of the European Union represents another theoretical avenue, though non-member states face high barriers. Russia previously attempted challenging EU sanctions through this court, with judges ruling the complaint inadmissible. Venezuela’s similar attempt to contest human rights-related sanctions also failed, establishing Brussels’ broad latitude in foreign security policy.
International judicial options appear equally constrained. The European Court of Human Rights expelled Russia following the Ukraine invasion, while the International Court of Justice lacks clear jurisdiction without Russia accepting the court’s compulsory authority. Legal analyses from firms including Covington & Burling conclude Russia’s legal pathways remain severely limited despite the unprecedented nature of asset repurposing.