In December 2025, the European Union took steps under Article 122 of the Treaty on the Functioning of the European Union (TFEU) to keep approximately EUR 210 billion in Russian central bank assets – held primarily at Euroclear – immobilised on an indefinite basis. Simultaneously, EU leaders agreed EUR 90 billion in budget-backed lending to Ukraine, while the broader "reparations loan" concept remains a proposal and is legally contested. For international creditors with claims against Russian counterparties, these developments have significant but distinct implications: sovereign immunity means private enforcement against immobilised central bank reserves is not available, and companies must pursue separate routes to recover unpaid debts or enforce judgments inside Russia.
What Changed in December 2025 and Why It Matters
The EU's use of Article 122 TFEU – a provision ordinarily reserved for emergency economic measures – to anchor the immobilisation of Russian sovereign assets marks a shift from temporary restrictions to an open-ended legal framework. The approximately EUR 185 billion held at Euroclear in Belgium forms the core of these frozen reserves. The legal basis chosen is significant because it bypasses the ordinary legislative procedure, making a rapid reversal less likely but also attracting legal challenges from multiple directions.
The EUR 90 billion lending package agreed by EU leaders is backed by the EU budget and is distinct from the reparations-loan concept, which would securitise the frozen assets themselves as collateral for loans to Ukraine. That concept remains a proposal: it has not been enacted into binding law and faces unresolved questions of international law, including state immunity doctrine and the Vienna Convention on Diplomatic Relations as it applies to central bank property.
The Bank of Russia has responded by initiating proceedings against Euroclear before courts in Moscow and by filing a claim before the EU General Court. Both tracks are ongoing. The outcome of those proceedings may affect the legal architecture around the immobilised assets, but neither track currently opens a path for private creditors to access those reserves.
For background on the Moscow litigation and the parallel EU General Court proceedings, see our dedicated analysis: Bank of Russia v. Euroclear – Where Frozen Asset Litigation Stands.
Who Is Affected: A Practical Map for International Companies
The policy developments described above affect different categories of creditor in different ways. Understanding which category applies to your situation is the starting point for any legal strategy.
- Creditors with unpaid invoices or commercial debt owed by Russian private entities: The immobilisation of central bank assets does not directly affect your position. Debt collection against a Russian private company – including obtaining a payment order or enforcing a judgment before an Arbitrazh court – follows Russian procedural rules under the APC RF (Arbitrazh Procedural Code). Separately, asset freezing measures and currency controls introduced by Russia since 2022 continue to affect the practical enforceability of awards and judgments.
- Creditors with arbitral awards or foreign court judgments against Russian state entities: Enforcement inside Russia against state property remains subject to Russian sovereign immunity law, which has been applied restrictively by Russian courts. Enforcement outside Russia against Russian state property – including central bank reserves – faces the same state immunity doctrine that prevents private creditors from reaching immobilised assets at Euroclear or elsewhere.
- Holders of Russian sovereign bonds or instruments affected by Russia's debt restructuring measures: The reparations-loan proposal, if enacted, could affect the legal status of immobilised assets used as collateral. This remains speculative at present, and holders should monitor developments closely rather than assume any particular outcome.
- Companies subject to EU or UK sanctions with Russian counterparties: The regulatory framework around frozen assets, late payment interest accrual, and the ability to receive payments from Russia continues to evolve. Russian Government Commission approval is required for certain outbound payments from Russia to "unfriendly state" creditors; that requirement remains in force.
If you are uncertain which category applies to your exposure, our team can assist with an initial mapping. Please write to info@ferrazwhitmore.com or visit our contacts page.
State Immunity and the Limits of Private Enforcement
A recurring question from international creditors is whether the immobilisation of Russian central bank assets could somehow be used to satisfy private claims. The answer, under current law, is no. State immunity – and specifically the immunity of central bank assets from measures of constraint – is recognised in both customary international law and in the domestic law of most EU member states. The immobilisation of assets under EU restrictive measures is a public-law tool directed at a sovereign state; it does not convert those assets into a fund available to private litigants.
This distinction is reinforced by the way EU restrictive measures work in practice. Assets are immobilised, meaning they cannot be moved or transferred, but they are not confiscated and they are not placed under the administration of a court or insolvency officer for the benefit of creditors. Any reparations-loan mechanism that might eventually use these assets would operate at the interstate level, with proceeds directed to Ukraine through an agreed intergovernmental framework – not distributed to private creditors pursuing unpaid invoices or enforcement of judgment against Russian entities.
Late payment interest continues to accrue on unpaid commercial debts as a matter of contract or applicable law, but the ability to collect that interest depends on enforceability against available assets, which remains the central practical challenge for creditors with Russian counterparties.
Immediate Actions for International Companies: Five Steps
Given the current environment, international companies with Russian exposure should consider the following steps as a matter of priority.
- Audit your Russian receivables and contractual claims. Identify which claims are owed by private entities, which by state or state-affiliated entities, and which involve instruments or assets potentially connected to the frozen reserves. The legal strategy differs materially across these categories.
- Review your enforcement options inside Russia. For claims against private Russian counterparties, Arbitrazh court proceedings under the APC RF remain available, including the expedited payment order procedure for undisputed debts below certain thresholds. However, the enforceability of any judgment obtained will depend on the debtor's available assets in Russia and the restrictions on outbound transfers.
- Check Russian Government Commission requirements before taking any step. Any transaction involving a creditor from a state designated as "unfriendly" by Russia – which includes all EU member states – may require prior approval from the Government Commission. Acting without that approval can render a transaction void under Russian law.
- Monitor the EU legislative process on the reparations-loan concept. The proposal is not yet law. If it advances, it could alter the legal landscape for asset immobilisation, create precedents relevant to state immunity litigation, and potentially affect the timing and mechanics of any eventual asset resolution. Ferraz & Whitmore will issue updated alerts as material developments occur.
- Preserve your legal position on sanctions compliance. If you are receiving payments from Russia, or have ceased receiving them due to sanctions, document the factual basis carefully. Compliance with EU sanctions law, including asset freezing provisions, is a precondition for any future recovery strategy involving EU-side enforcement or arbitration.
Our debt recovery practice in Russia covers the full range of collection and enforcement options available to foreign creditors, from pre-litigation demand through to Arbitrazh court proceedings and post-judgment enforcement. We can assess the realistic prospects for your specific claim and advise on sequencing.
Interaction with EU Sanctions and Trade Controls
The immobilisation framework and the reparations-loan proposal do not exist in isolation. They interact with the broader package of EU restrictive measures against Russia, which includes sectoral sanctions, asset freezing against designated individuals and entities, and restrictions on financial transactions. For companies navigating this environment, it is important to distinguish between different legal regimes that can produce similar practical effects – an unpaid invoice may be the result of a Russian counterparty's financial difficulty, a contractual dispute, Russian currency controls, or a sanctions compliance concern on either side, and each requires a different legal response.
The question of where to pursue a claim – in Russian courts, in arbitration, or through enforcement proceedings in a third country – depends on contractual choice-of-law and forum clauses, the nature of the debtor's assets, and the interaction of Russian and EU regulatory frameworks. In some cases, initiating Arbitrazh court proceedings inside Russia remains the most direct route to recovering a commercial debt; in others, the sanctions environment makes that route complex or temporarily unavailable.
For an overview of how sanctions and trade controls interact with your Russian commercial relationships, our sanctions and trade practice for Russia provides a starting point. We recommend a combined assessment for any situation where both debt recovery and regulatory compliance are in play.
What to Watch Next
The legal and political situation around Russian assets is evolving. The following developments are worth tracking in the coming months:
- Progress – or absence of progress – in the EU legislative process on using frozen Russian assets as collateral for Ukraine financing. Any formal proposal adopted under an ordinary legislative procedure would require European Parliament involvement and would be open to legal challenge.
- Rulings from the EU General Court on the Bank of Russia's challenge to Euroclear's actions. These proceedings could clarify the legal basis and limits of asset immobilisation under EU law, with potential implications for private creditors and for the reparations-loan concept.
- Developments in Russian court proceedings relating to Euroclear and other foreign financial intermediaries, which may affect the enforceability of Russian judgments against those entities in third-country jurisdictions.
- Any changes to the Russian Government Commission approval regime for payments to foreign creditors from "unfriendly" states, including modifications to the scope of transactions requiring approval or the conditions under which approval is granted or withheld.
- Evolving guidance from EU member state competent authorities on the treatment of accrued interest, dividends, and other returns on immobilised assets – an area where national implementation varies and continues to develop.
Ferraz & Whitmore monitors these developments continuously. If you have questions about how the current situation affects your exposure to Russian counterparties, or if you wish to discuss the options available for debt collection, enforcement of judgment, or regulatory compliance in this environment, please contact our team at info@ferrazwhitmore.com or through our contacts page. We can arrange a confidential discussion tailored to your specific circumstances.
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.