EU to reallocate frozen Russian cash to Western investors whose assets were seized by Moscow

Euroclear, one of the Eurozone's securities depositories, plans to seize and redistribute an approx. €3 billion of Russia's funds, which are frozen at the Belgian clearing firm.

It will allocate them as compensation to Western investors that have been affected by the seizure of their assets in Russia in recent months, according to an exclusive report by Reuters.

According to multiple sources that have spoken to the publication, this move is a retaliatory measure by the EU in response to Moscow's actions to confiscate billions from Western investors and marks a new level of economic confrontation by Europe.

Previously, the West has facilitated loans and payments to Ukraine using the interest from frozen Russian assets, a move that Russian President Vladimir Putin has condemned as theft. The European Union modified its sanctions framework last year to enable the disbursement of funds to Western investors in such circumstances.

The €3 billion is part of a total pool of 10 billion euros owned by Russian individuals and organisations that were sanctioned by the EU following Russia's military actions in Ukraine. However, according to the article, the payments to Western investors will not affect the over €200 billion of Russian central bank reserves currently frozen in the EU. It will diminish the stockpile of Russian wealth, which includes cash, shares, and bonds, mostly held at Euroclear, giving the EU leverage over Moscow.

By Nazrin Sadigova