According to Reuters Until December 12, the asset freeze was extended every six months and required a unanimous decision by all EU countries. Hungary and Slovakia could block the extension, and there was a risk that assets would be unfrozen due to the disagreement of at least one country. Now the mechanism has changed: the freeze is valid indefinitely – “as long as there remains an imminent threat to the economic interests of the union.” The decision is taken by a qualified majority, so Hungary and Slovakia can no longer block it with their veto. Assets remain frozen automatically, without the need for a regular vote.
The ban applies to any direct or indirect transfers of Central Bank assets or reserves, as well as transfers by any legal entities, organizations or bodies acting on behalf of or at the direction of the regulator. Among the latter is Russia’s National Welfare Fund (NWF).
The EU Council explained its decision by the fact that in the absence of such a ban, any additional resources would be directly used by Russia to finance a war of aggression against Ukraine. This would have serious consequences for the economy and exacerbate the risk of escalation of hybrid aggressive activities on EU territory. The decision will remain in force as long as the risk of further serious deterioration of the economic situation in the EU remains due to Russia’s actions in the context of the war.
They plan to allow Russia to return the money only if it pays reparations to Ukraine after the war ends.
A few hours before the EU decision, the Russian Central Bank announced that it had filed a lawsuit against the Belgian depository Euroclear, where most of the frozen Russian assets in the EU are kept, in the Arbitration Court of Moscow. Among other things, the regulator claimed losses due to the inability to dispose of “monetary funds and securities belonging to the Bank of Russia” and the need to recover them.
The Central Bank of Russia also warned that it would challenge the European Union’s decisions regarding the frozen assets. Euroclear representatives, speaking to Russian state agency TASS, said they were ready for lawsuits.
