Russia’s central bank sues EU for freezing its assets indefinitely

The Bank of Russia is suing the European Union for keeping its state assets frozen “for an indefinite period” to serve as collateral against a €90 billion loan to Ukraine.

The lawsuit will test rare emergency powers that the European Commission used last year to keep Russian state assets across the bloc, worth some €210 billion, on ice through a qualified majority. The legal loophole nullified vetoes that Kremlin-friendly countries in the EU, such as Hungary, would otherwise have had.

EU leaders agreed in mid-December to raise common debt without Hungary, Slovakia and Czechia to finance Kyiv’s defense against Russian forces. Ukraine will only have to pay back the loan once Moscow ends the conflict and pays war reparations. If the Kremlin refuses, EU leaders reserve the right to tap the cash value of the frozen assets to pay itself back.

In a statement Tuesday, the Bank of Russia blasted the EU’s “unlawful actions against the Bank of Russia’s sovereign assets,” saying the regulation violates “the basic and inalienable rights to access justice” and the “principle of sovereign immunity of states and their central banks.”

The central bank also argued the Council of the EU committed “serious violations” of its own procedures by adopting the measure by qualified majority rather than unanimity.

The Commission plans to issue a statement in response to the lawsuit, which the central bank filed at the EU’s General Court in Luxembourg.

Russia’s central bank filed a separate lawsuit in Moscow last year against Brussels-based financial depository Euroclear, where the bulk of its assets lie immobilized under EU sanctions after Moscow invaded Ukraine in 2022.