The Russian Central Bank has challenged the indefinite immobilisation of its sovereign assets, which the European Union has agreed to release only when the war in Ukraine ends and reparations are paid.
The Russian Central Bank has filed a lawsuit against the European Union for the indefinite immobilisation of its sovereign assets, which the bloc approved last year in a bid to strengthen its leverage in ongoing talks to end the war in Ukraine and prevent Moscow from tapping into the funds for its own profit.
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The assets are worth about €210 billion across the bloc. The majority, €185 billion, is held at Euroclear, a Brussels-based depository already sued by Moscow.
The legal action was submitted to the EU's General Court in Luxembourg on 27 February, but it was announced on Tuesday morning in a short press release.
The bank alleges that the long-term immobilisation "violates the basic and inalienable rights to access justice, inviolability of property, and the principle of sovereign immunity of States and their central banks, guaranteed by international treaties and European Union law, which contradicts the fundamentals of the rule of law and cannot be regarded as compatible with the principle of supremacy of law", the statement said.
The regulation that is being challenged was agreed by member states in December amid intense negotiations to provide Ukraine with €90 billion in fresh assistance.
The long-term immobilisation was implemented under Article 122 of the EU Treaties. The provision has been used in past economic emergencies, including the COVID-19 pandemic and the energy crisis, and requires a qualified majority.
In a novel interpretation, the European Commission argued that the shockwaves unleashed by Russia's war have caused a "serious economic impact" for the EU as a whole, triggering "serious supply disruptions, higher uncertainty, increased risk premia, lower investment and consumer spending", in addition to countless hybrid attacks in the form of drone incursions, sabotage and disinformation campaigns.
Under the ban, the €210 billion will be released only after Russia meets three conditions: it ceases its war of aggression, provides reparations to Ukraine and no longer poses a "serious risk of severe difficulties" to the European economy.
Given that Moscow has categorically ruled out compensating Kyiv, it is unlikely the money will ever be set free.
"We are sending a strong signal to Russia that as long as this brutal war of aggression continues, Russia's costs will continue to rise," Ursula von der Leyen said in December. "This is a powerful message to Ukraine: We want to make sure that our brave neighbour becomes even stronger on the battlefield and at the negotiating table."
The Russian Central Bank claims Brussels "committed serious procedural violations" by using a qualified majority under Article 122 rather than the unanimity that governs foreign policy. Hungary, an opponent to Ukraine aid, voiced similar complaints in December.
The Commission quickly dismissed the lawsuit.
"This claim comes in a context of a growing number of Russian legal challenges concerning our support measures for Ukraine, and therefore, we are, of course, not surprised," a Commission spokesperson said on Tuesday afternoon.
"We are fully confident about the legality of this regulation and its compatibility with EU law and international law."
The regulation currently in place forbids the recognition and execution within the bloc of any claim made "in connection" with the immobilisation of the Russian assets.
This article has been updated with the Commission's reaction.