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Legal challenge is first shot across the bows as Brussels aims to use funds for €90bn loan to Ukraine

Russia’s central bank has filed a lawsuit in Moscow seeking damages from Brussels-based depository Euroclear for freezing its sovereign assets, and vowed to challenge European plans to immobilise the reserves.

The move opens the door for Russia to seize Euroclear’s €17bn of assets in the country, seek further damages from the company in other jurisdictions and file other lawsuits if the EU goes ahead with the plans.

The central bank said on Friday it would also “unconditionally challenge” efforts to immobilise its assets via international courts in both “friendly and hostile countries”. It said it would push other jurisdictions to seize Euroclear assets once the Russian court ruled on the case.

The suit is Russia’s first shot across Europe’s bows as Brussels moves to indefinitely immobilise the assets next week to fund a €90bn loan to Ukraine. Belgium, where most of the assets are held, has opposed the idea, fearing Russian retaliation.

As part of its proposal tabled last week, the European Commission has introduced safeguards to protect EU member states and financial institutions from lawsuits within the bloc and to make it more difficult for Russia to enforce any judgments in other jurisdictions.

Russia’s central bank said that Euroclear, which holds €185bn of the €210bn in Russian assets frozen by Europe, had “made it impossible to access funds and securities belonging to the Bank of Russia” through “illegal actions”.

It is seeking damages based on “the sum of the Bank of Russia’s blocked funds, the value of the blocked securities, and loss of expected gains”, the central bank added.

It added that it would pursue “all available legal and other mechanisms to defend its interests” if the European plans to use Russia’s assets move forward. Euroclear declined to comment on the lawsuit.

Kyiv’s western allies froze $300bn in Russia’s reserves shortly after President Vladimir Putin ordered the full-scale invasion of Ukraine in 2022. They are currently immobilised every six months through a process that requires unanimous agreement from all 27 EU members, including opponents of the scheme such as Hungary.

But the European Commission proposed using emergency powers to immobilise €210bn indefinitely to fund the €90bn loan, hoping it will bolster Kyiv’s resistance to Russia’s invasion and help secure a role for the continent in US-led peace talks. EU countries on Thursday agreed to that proposal ahead of a debate among EU leaders next week on the loan.

The move is opposed by the US, which wants most of the assets to be poured into two US-led investment funds as part of draft peace plans that Donald Trump’s administration is currently negotiating between the US and Russia.

Belgium has demanded other member states share the risks of future Russian legal challenges. But France, whose commercial banks hold about €18bn of the Russian assets, has pushed back against the idea.

Vladimir Putin, Russia’s president, said last month that the Kremlin had drawn up plans to respond to the EU scheme but did not offer further details. Moscow is also exploring seizing assets held by Euroclear and western investors in Russia, as well as nationalising western businesses in Russia outright.

Dmitry Peskov, Putin’s spokesperson, told reporters earlier this week that a move to immobilise the Russian assets would “have very serious consequences for countries, legal entities and individuals”.

The EU economy commissioner Valdis Dombrovskis said: “The assets are not seized and the principle of sovereign immunity is respected.”

He said the commission has proposed “additional protections for financial institutions holding these immobilised assets” as part of its €90bn loan proposal.

Legal challenge is first shot across the bows as Brussels aims to use funds for €90bn loan to Ukraine

Russia’s central bank has filed a lawsuit in Moscow seeking damages from Brussels-based depository Euroclear for freezing its sovereign assets, and vowed to challenge European plans to immobilise the reserves.

The move opens the door for Russia to seize Euroclear’s €17bn of assets in the country, seek further damages from the company in other jurisdictions and file other lawsuits if the EU goes ahead with the plans.

The central bank said on Friday it would also “unconditionally challenge” efforts to immobilise its assets via international courts in both “friendly and hostile countries”. It said it would push other jurisdictions to seize Euroclear assets once the Russian court ruled on the case.

The suit is Russia’s first shot across Europe’s bows as Brussels moves to indefinitely immobilise the assets next week to fund a €90bn loan to Ukraine. Belgium, where most of the assets are held, has opposed the idea, fearing Russian retaliation.

As part of its proposal tabled last week, the European Commission has introduced safeguards to protect EU member states and financial institutions from lawsuits within the bloc and to make it more difficult for Russia to enforce any judgments in other jurisdictions.

Russia’s central bank said that Euroclear, which holds €185bn of the €210bn in Russian assets frozen by Europe, had “made it impossible to access funds and securities belonging to the Bank of Russia” through “illegal actions”.

It is seeking damages based on “the sum of the Bank of Russia’s blocked funds, the value of the blocked securities, and loss of expected gains”, the central bank added.

It added that it would pursue “all available legal and other mechanisms to defend its interests” if the European plans to use Russia’s assets move forward. Euroclear declined to comment on the lawsuit.

Kyiv’s western allies froze $300bn in Russia’s reserves shortly after President Vladimir Putin ordered the full-scale invasion of Ukraine in 2022. They are currently immobilised every six months through a process that requires unanimous agreement from all 27 EU members, including opponents of the scheme such as Hungary.

But the European Commission proposed using emergency powers to immobilise €210bn indefinitely to fund the €90bn loan, hoping it will bolster Kyiv’s resistance to Russia’s invasion and help secure a role for the continent in US-led peace talks. EU countries on Thursday agreed to that proposal ahead of a debate among EU leaders next week on the loan.

The move is opposed by the US, which wants most of the assets to be poured into two US-led investment funds as part of draft peace plans that Donald Trump’s administration is currently negotiating between the US and Russia.

Belgium has demanded other member states share the risks of future Russian legal challenges. But France, whose commercial banks hold about €18bn of the Russian assets, has pushed back against the idea.

Vladimir Putin, Russia’s president, said last month that the Kremlin had drawn up plans to respond to the EU scheme but did not offer further details. Moscow is also exploring seizing assets held by Euroclear and western investors in Russia, as well as nationalising western businesses in Russia outright.

Dmitry Peskov, Putin’s spokesperson, told reporters earlier this week that a move to immobilise the Russian assets would “have very serious consequences for countries, legal entities and individuals”.

The EU economy commissioner Valdis Dombrovskis said: “The assets are not seized and the principle of sovereign immunity is respected.”

He said the commission has proposed “additional protections for financial institutions holding these immobilised assets” as part of its €90bn loan proposal.

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Fast-track entry to bloc being discussed by US and Ukrainian officials backed by Brussels in drive to end Russia’s war

Ukraine would be earmarked to join the EU by 2027 under a fast-tracked proposal being discussed in US-brokered negotiations to end Russia’s war, in a move that would rewrite the bloc’s accession procedures.

EU accession by January 1 2027 is specified in the latest draft of a Ukraine peace proposal being negotiated by US and Ukrainian officials with the support of Brussels, people briefed on the document’s contents told the Financial Times.

That rapid timeline — Kyiv is yet to formally complete even one of the EU’s gruelling 36 stages of accession — would upend the bloc’s “merit-based” approach to admitting new members and would force Brussels to rethink the entire process, the people added.

They cited the current system of staggered access to EU funds, voting power and benefits such as the common agricultural policy.

Officials supportive of Ukraine’s EU membership said including it as part of a peace deal would make membership a fait accompli for Kyiv, as Brussels would feel it could not derail the peace process by opposing the rapid timeline.

US backing would also mean that President Donald Trump could order Hungary’s Viktor Orbán, who has so far held up Ukraine’s accession process, to drop his veto and allow Kyiv to start progressing through the political approval process.

Ukraine’s President Volodymyr Zelenskyy told reporters in Kyiv on Thursday that he and his team of negotiators had “shaped our approach to some points in line with the fact that Ukraine will in the future be a member of the European Union”.

“The issue of Ukraine’s future EU membership,” Zelenskyy said, “depends largely on the Europeans — and on the Americans too, in fact”.

“Because if we agree a deal specifying when Ukraine becomes a member of the EU, the Americans, as a party to this agreement, will do everything so that our European path cannot be blocked by others in Europe over whom they have influence,” he said.

“So Europeans are really needed in the talks, and it is good that they are taking part.”

Ukraine applied for EU membership shortly after Russia’s full-scale invasion in February 2022, and was granted the status of formal candidate four months later.

The EU’s enlargement commissioner Marta Kos told the FT last month that new EU member states could be put on “probation” for a few years and excluded from the bloc in case of democratic backsliding, under a proposal aimed at allaying concerns about the impact of new entrants.

The inclusion in a draft peace deal of Ukraine’s path to joining the EU by 2027 was first reported by Ukraine’s Mirror of the Week on Thursday.

Trump told reporters in the Oval Office on Thursday that he thought the US was “very close with Russia to having a deal. I thought we were very close with Ukraine to having a deal.”

He said US officials would attend a meeting over the weekend, hosted by Germany, at which European and Ukrainian officials would work out some of the thornier points of the peace proposals that have been passed between the sides.

Trump — who had vowed during his election campaign to bring peace to Ukraine and end Russia’s war in 24 hours — said on Thursday, almost a year into his second term, that the deal had become “a little bit complicated, because you’re cutting up land in a certain way, it’s​ not the easiest thing, it’s like a complex real estate deal times a thousand”.

Russia has not indicated it will accept any plan that deviates from its maximalist demands for ending the war.

Yuri Ushakov, foreign policy adviser to Russian President Vladimir Putin, said on Friday that Russia had not yet seen the latest drafts of the US peace plan with input from Ukraine and its European allies.

“When we do see it, I sense that we’re not going to like a lot of it,” Ushakov told reporters.

Ushakov also rejected suggestions that the frontline Donbas region could become a “free economic zone”, an idea being pushed by the Trump administration, if Ukraine withdrew its troops from the territory it controls there.