Euroclear sees no "magic solution" for transferring Russian assets to Ukraine
Kyiv • UNN
Euroclear's CEO said that transferring Russia's frozen assets could create risks of bankruptcy and legal claims. €185 billion is held at Euroclear.
"There is still no 'magic solution' regarding the frozen Russian assets held at Euroclear. This was stated by Euroclear Chief Executive Officer Valérie Urbain in an interview with the Belgian newspaper Le Soir, published on November 13, UNN reports."
Details
"When I hear the word 'transfer,' I feel compelled to respond: we cannot simply 'transfer' the assets and forget about the liabilities! This would create a huge imbalance and lead to Euroclear's bankruptcy," Urbain said, commenting on the revival in the EU of the idea of using the Russian assets held at Euroclear for the benefit of Ukraine and one of the proposals—to transfer these assets to the EU or another organization.
"There is no magic solution for now," Urbain said when asked whether the proposals in circulation offered additional guarantees for Euroclear, as had been demanded a year ago.
According to her, "even if all the assets and liabilities were transferred, there is currently no evidence that this solution is completely sound from a legal standpoint. If the central bank of russia does not accept the transfer, it will return to Euroclear demanding repayment of the debt. Therefore, after the assets are transferred, we must have sufficient protection to cover its repayment claim."
"Some of the scenarios considered last year already involved guarantees from EU member states, which entails their (financial) obligations and, consequently, the possibility that they may one day have to face claims for repayment of the debt," she said.
"It should also be remembered that, in addition to this, there is a lawsuit; the central bank of russia has initiated proceedings against Euroclear. This is another sword of Damocles hanging over them. These factors cannot be ignored when discussing such solutions," Urbain stressed.
Additional information
The countries of the European Union, Reuters notes, froze approximately €210 billion in assets of Russia's central bank after the invasion of Ukraine by the russian federation in February 2022. Euroclear holds approximately €185 billion of these assets, which constitutes more than 80% of its balance sheet.
Some European countries want the Russian assets to be allocated to Ukraine. Belgium opposes this plan. Euroclear shareholders agreed to transfer the interest earned on the assets, nearly €8 billion to date, to the European Commission for Ukraine.