As of early 2026, approximately EUR 210 billion in Russian central bank assets remain immobilised under EU measures sustained by Article 122 of the Treaty on the Functioning of the European Union, with the bulk – around EUR 185 billion – held at Euroclear in Belgium. The Bank of Russia has initiated legal proceedings against Euroclear both before Russian courts and before the EU General Court, making this one of the most consequential frozen-asset disputes in contemporary international finance. International companies with Russian counterparties, outstanding invoices, or exposure to Russian-held securities need to assess their position carefully in light of rapidly shifting legal parameters.
What Changed and When
The pivotal development came in December 2025, when EU leaders invoked Article 122 TFEU – a provision traditionally reserved for addressing economic emergencies – to maintain the immobilisation of Russian sovereign assets on an indefinite basis rather than through the periodic renewals that had governed earlier sanctions packages. At the same session, EU leaders agreed a budget-backed lending facility of EUR 90 billion directed towards Ukraine, with the long-term ambition of eventually using proceeds from immobilised assets as a funding source. However, the concept of treating frozen assets as reparations-in-kind remains a legal proposal that is actively contested and has not yet acquired a settled legal foundation under international law.
The Bank of Russia responded by bringing claims in the Arbitrazh court system in Moscow, relying on provisions of Russian procedural law – in particular the Arbitrazh Procedural Code of the Russian Federation (APC RF) – that permit Russian courts to assume jurisdiction over foreign entities when their actions are deemed to cause harm within Russia. Parallel proceedings were initiated before the EU General Court in Luxembourg. Both tracks remain active.
Who Is Affected in Russia
The litigation has direct and indirect consequences for a range of market participants:
- Foreign institutional investors holding Russian securities through Euroclear or other international central securities depositories (ICSDs) remain unable to receive coupon payments, redemptions, or dividend distributions ordinarily routed through those custodial chains.
- Russian corporates and financial institutions that issued Eurobonds or other instruments settled via Euroclear face continuing uncertainty over servicing obligations and may encounter cross-default exposure under their financing agreements.
- International companies with unpaid invoices or contractual claims against Russian counterparties cannot simply redirect their debt collection efforts toward immobilised central bank reserves. Asset freezing under EU sanctions regimes and the doctrine of state immunity operate as separate and cumulative barriers.
- Private creditors seeking enforcement of judgment should note that immobilised central bank reserves attract sovereign immunity protections under both customary international law and EU Member State domestic law; these reserves are not available for private attachment regardless of the strength of any underlying claim.
If your company is holding an unpaid invoice or faces disruption to settlement flows connected to Russia-linked instruments, a precise mapping of the contractual and jurisdictional structure is essential before any enforcement step is taken. Ferraz & Whitmore's team can assist in that analysis – please write to info@ferrazwhitmore.com or visit our contacts page.
The Parallel Litigation Fronts
Proceedings in Moscow
Russian federal courts – operating under the APC RF – have in recent years adopted an expansive jurisdictional doctrine in disputes involving foreign entities subject to EU or US sanctions. A payment order or declaratory claim brought by a Russian state entity such as the Bank of Russia before the Arbitrazh court can, under Russian procedural rules, be pursued to judgment and notionally enforced against assets of the respondent located within Russian jurisdiction, including Russian subsidiaries or branch assets of foreign financial groups. Any foreign entity with a Russian legal presence should treat this risk as live rather than theoretical.
Proceedings before the EU General Court
The Bank of Russia's action in Luxembourg challenges the legal basis and proportionality of the immobilisation measures. The EU General Court will need to assess, among other questions, whether Article 122 TFEU provides an adequate legal basis for measures of this scope and duration, and whether the rights of the central bank as a legal person are infringed. Procedural timelines before the EU General Court are measured in years; no expedited outcome should be anticipated. The Supreme Court of Russia has also issued guidance recognising parallel domestic proceedings as a legitimate response to what Russian authorities characterise as unlawful seizure.
The Reparations-Loan Concept
EU leaders agreed in December 2025 to extend EUR 90 billion in budget-backed lending to Ukraine, with a political understanding that profits generated by immobilised Russian assets – rather than the principal itself – would contribute to servicing that facility. The more far-reaching concept of treating the underlying EUR 210 billion as available reparations remains a proposal: it has not been enacted into binding law, it is contested by Russia in multiple fora, and several EU Member States as well as independent legal scholars have raised substantive objections under international law on state immunity and the law of countermeasures. Companies should not factor the reparations concept into near-term commercial planning.
Immediate Action Items for International Companies
Given the pace at which the legal landscape is shifting, the following five steps deserve prompt attention:
- Audit contractual exposure. Identify all agreements with Russian counterparties that reference Euroclear, NSD (Russia's National Settlement Depository), or cross-border settlement chains. Note force majeure, sanctions carve-out, and governing-law clauses.
- Assess late payment interest accrual. Where Russian law governs and a court or arbitral tribunal has already issued an award, determine whether late payment interest is accruing under Article 395 of the Russian Civil Code or under contractual provisions, and model the cumulative exposure.
- Review Government Commission authorisation requirements. Certain transactions involving Russian assets or counterparties require sub-commission approval from the Government Commission on the Control of Foreign Investment. Verify whether any contemplated steps – including set-off, novation, or assignment of claims – require such consent under current Russian law.
- Do not attempt to enforce against frozen sovereign assets. Private enforcement action against immobilised central bank reserves is not available. Misdirected enforcement attempts may create procedural complications and consume resources without result.
- Preserve documentary evidence. Courts in both Russian and EU jurisdictions will examine the factual record in detail. Correspondence, payment confirmations, SWIFT records, and custodial statements should be preserved and organised now, before any limitation period becomes relevant.
For further guidance on debt collection and enforcement in Russia, including the procedural steps available to creditors in the Arbitrazh court system, our team is available to discuss your specific situation.
The Sanctions Dimension
The Bank of Russia v Euroclear litigation is inseparable from the broader EU asset freezing and sanctions-trade framework. EU Regulation 833/2014, as extensively amended, prohibits the making available of funds or economic resources to listed persons and entities, and imposes transaction restrictions across a wide range of financial services. The Article 122 TFEU measure of December 2025 supplements rather than replaces this framework.
For international companies navigating licensing requirements, the Euroclear windfall-profits mechanism, or questions about whether specific transactions with Russian counterparties fall within current restrictions, a detailed sanctions analysis is advisable before any commitment is made. You can find further context in our analysis of sanctions and trade compliance in Russia.
Private Creditors and State Immunity: A Critical Distinction
A point that recurs in client enquiries deserves explicit restatement: the immobilisation of Russian central bank assets does not create a pool of funds available for private debt collection against Russia or Russian entities. State immunity – both in its jurisdictional and enforcement dimensions – continues to apply to central bank reserves as a matter of customary international law and, in most EU Member States, as a matter of domestic statute.
Private creditors holding arbitral awards or court judgments against Russian state entities may pursue enforcement against commercial assets that are not protected by immunity, but identifying and attaching such assets is a fact-specific exercise requiring careful jurisdictional analysis. Our longer-form piece on how private creditors might access frozen Russian assets addresses this question in greater depth.
Outlook
The legal status of immobilised Russian assets is unlikely to be resolved quickly. Proceedings before the EU General Court and in Russian Arbitrazh courts will run in parallel, creating a risk of divergent rulings with no clear mechanism for harmonisation. The Article 122 TFEU basis for indefinite immobilisation will itself be tested in litigation. Meanwhile, the practical consequences – suspended settlement flows, accruing interest, blocked distribution chains – continue to affect companies on both sides of the asset divide.
Regulatory alerts of this kind require action rather than observation. If your organisation has exposure arising from this dispute or the broader sanctions architecture, we encourage you to reach out at info@ferrazwhitmore.com or through our contacts page to discuss how the current situation affects your specific position.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.