By Gleb Bryanski and Elena Fabrichnaya
MOSCOW, Dec 11 (Reuters) – The European Commission has proposed an unprecedented use of about 210 billion euros of frozen Russian sovereign assets to finance Ukraine.
Russia, which does not hold significant sovereign assets of any EU nation except for diplomatic real estate, has said such a move would be an act of theft and warned of “the harshest reaction”. Outlined below are potential things Russia could do in response to any EU decision:
SEIZING FROZEN FOREIGN PRIVATE FUNDS
According to former President Dmitry Medvedev, Russia has about $300 billion of frozen foreign assets in so-called “C-type” accounts created in March 2022 in response to Western sanctions over the war in Ukraine.
There is no official data on the total amount held in these accounts.
The depositary “C-type” accounts hold Russian securities owned by investors from countries Russia considers “unfriendly”, including stock in Russian companies as well as corporate and sovereign bonds.
Ordinary “C-type” accounts accumulate cash and proceeds from these securities, such as dividends and coupon payments.
Russia’s Sberbank estimated that 25% of its 787 billion roubles ($9.9 billion) dividend on shares owned by foreigners for 2024 was paid into “C-type” accounts.
Some Russian officials and business leaders have warned that Russian action in this area could provoke another round of seizures, with EU countries targeting the private property of Russian citizens in Europe.
SEIZING EU INVESTORS’ PHYSICAL ASSETS
EU private investors still hold significant assets in Russia, the most prominent examples being local Russian banks owned by Austria’s Raiffeisen and Italy’s UniCredit.
Such assets often generate substantial profits in roubles from local operations, which the owners cannot repatriate.
Raiffeisen, for example, reported 83.9 billion roubles ($1 billion) in net profit from its Russian unit in the first half of 2025. The unit, which operates as a Russian bank, is free to manage the funds as it wishes.
Local subsidiaries of international businesses often choose to hold proceeds from their operations in deposits at the central bank, earning interest close to the key rate, currently 16.5%.
There is no general estimate of the total value of physical assets still held in Russia by EU investors. The central bank estimated the total value of foreign direct investment from the EU at $364 billion at the start of 2022.
Since then, many EU companies have left Russia or had their assets seized by the government and handed over to new owners. Russian lawyers told Reuters that seizing physical assets is far more complex than targeting assets in “C-type” accounts.
50 YEARS OF LITIGATION
The CEO of Russia’s second-largest bank VTB, Andrei Kostin, said in an interview with Reuters that Moscow could unleash half a century of litigation if the EU proceeds with its plans.
He said Russia could sue the EU, Belgium and Brussels-based financial institution Euroclear over the assets in Russian and international courts and also suggested a lawsuit in the United Nations’ court.
Russian lawyers told Reuters that such lawsuits could be complemented by multiple legal actions from private individuals against European states and entities.
($1 = 79.2500 roubles)
(Writing by Gleb Bryanski; Editing by Alex Richardson)
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