Central Bank of Russia warns EU over plans to seize assets, ready to protect interests by all means without notification
MOSCOW. Dec 12 (Interfax) - The Central Bank of Russia has for the first time commented on its possible actions in response to European Union plans to seize its frozen assets, saying it is prepared to use all available means of legal protection without giving prior notice.
The CBR said the unauthorized use of Russia's gold and foreign exchange reserves is illegal and contrary to international law, including in that it violates the principles of sovereign immunity of assets.
If the European Commission implements normative acts to seize the reserves, the CBR said that it would dispute this through all available competent authorities, including national courts, the judicial bodies of foreign nations and international organizations, arbitration courts, and other international courts, with subsequent enforcement of court rulings in the member countries of the United Nations.
"The Bank of Russia retains the right, without additional notification, to proceed to the practical implementation of all available legal and other mechanisms to protect its interests in the event of the further promotion or any form of implementation of these discussed initiatives of the European Union," the CBR said.
The European Commission last week presented two options for supporting Ukraine's financial needs in 2026-2027. The actions published in a press release and draft regulation, among other matters, envisage utilizing assets held in EU financial institutions, including the Euroclear depository, without the consent of the CBR, the Central Bank said.
The two proposals include EU borrowing and a reparations loan that would allow the commission to borrow the remaining funds from EU financial institutions holding the frozen assets of Russia's Central Bank. The EC said that a comprehensive package of five legal proposals support the solutions, and that the proposals establish a number of safeguards to protect member countries and financial institutions from possible retaliatory measures within Russia, as well as from illegal expropriation outside its borders, particularly in Russia-friendly jurisdictions.
The so-called reparations loan scenario entails using Russia's frozen assets in all EU financial institutions where they are held, which would mean transferring the funds to Ukraine as a loan. Ukraine would be obligated to repay the loan when and if Russia pays reparations, and a qualified majority could reach the decision, EC President Ursula von der Leyen said last week. The proposals are to be considered at the EU summit on December 18-19.
The CBR has repeatedly stated its readiness to challenge the freezing of Russia's international reserves. "We are nearly completely prepared legally. We are having difficulties organizing work with lawyers who could defend our interests in foreign courts, as there are restrictions," Central Bank Governor Elvira Nabiullina said in summer 2023.
"We are not talking about a lawsuit, but about lawsuits, likely given that these are different jurisdictions. The issue is indeed being studied," State Secretary and Central Bank Deputy Governor Alexei Guznov said prior to this
The EU, the U.S., and several other countries froze Russia's international reserves in the spring of 2022 in response to its actions in Ukraine. The sanctions have deprived Russia of access to approximately $300 billion in reserves. Nabiullina subsequently announced the preparation of lawsuits regarding this matter.
