In December 2025, the European Union relied on Article 122 of the Treaty on the Functioning of the European Union to keep approximately EUR 210 billion of Russian central bank reserves frozen indefinitely – with roughly EUR 185 billion held at Euroclear in Belgium. This decision has no direct bearing on the enforcement rights of private creditors, because state immunity shields those sovereign reserves from individual claims; however, it does reshape the litigation and strategic landscape for international companies with outstanding Russian-law disputes or unpaid invoices. Understanding the distinction between frozen state assets and recoverable commercial debts is now essential for any foreign business with Russian counterparty exposure.
What Changed in December 2025
Prior to December 2025, the immobilisation of Russian central bank assets rested on a framework that was subject to periodic renewal. EU leaders took the significant step of making the freeze indefinite by invoking Article 122 TFEU – a provision associated with emergency economic measures. At the same time, EU heads of government agreed on a EUR 90 billion package of budget-backed lending to Ukraine. A separate "reparations loan" concept, under which the principal and interest on those loans would ultimately be serviced from the frozen Russian reserves, remained at the proposal stage and was legally contested as of that date.
The Bank of Russia responded by filing claims against Euroclear before the Moscow Arbitrazh courts and before the EU General Court. Those proceedings add a further layer of legal uncertainty around the ultimate disposition of the assets.
If your company holds an unpaid invoice against a Russian counterparty or is considering enforcement of a judgment in Russia, the current sanctions and litigation environment requires careful mapping before any step is taken. We encourage you to write to us at info@ferrazwhitmore.com or visit our contacts page to discuss your specific exposure.
Who Is Affected – and Who Is Not
The immobilisation of sovereign reserves and the rights of private commercial creditors operate in separate legal spheres. The following distinctions are critical:
- State immunity applies to central bank reserves. Private creditors – whether holding an Arbitrazh court judgment, an international arbitration award, or a foreign court order – cannot enforce directly against immobilised central bank assets. This position is consistent with customary international law on sovereign immunity and has not changed as a result of the December 2025 decision.
- Commercial debts remain separately enforceable through the ordinary channels of debt collection: payment order proceedings, civil or Arbitrazh court litigation in Russia, and enforcement of judgment through Russian bailiff services – subject to current procedural and currency-control restrictions.
- Foreign companies with pending claims in Russian courts face a distinct procedural environment. Government Commission approval is required for a range of transactions and disposals involving foreign parties, and this requirement interacts with enforcement timelines in ways that require case-by-case analysis.
- Companies holding EU-law claims relating to Euroclear-held assets sit in a different legal position and should monitor the Bank of Russia proceedings before the EU General Court closely.
The Reparations-Loan Concept: Still a Proposal
Some international creditors have enquired whether the EU's budget-backed lending framework creates a new route to satisfy Russian-related claims. The short answer is: not at this stage. The reparations-loan concept – under which frozen reserves would service EU lending to Ukraine – was, as of December 2025, a contested proposal and had not been converted into an instrument that private creditors could rely upon. The legal basis for redirecting sovereign reserves to satisfy private claims remains unresolved under both EU law and international law.
Companies should not factor an assumed redistribution of these assets into their commercial or litigation strategy at this time. For further context on the broader EU proposal and its current status, see our detailed alert on the EU reparations loan proposal and Russian asset claims.
Immediate Actions for International Companies
Given the developments outlined above, foreign businesses with Russian-law exposure should consider the following steps promptly:
- Audit outstanding receivables. Identify all unpaid invoices, unperformed contracts, or unsatisfied judgments involving Russian counterparties. Assess whether late payment interest is accruing and whether limitation periods under APC RF (the Arbitrazh Procedure Code of the Russian Federation) are approaching.
- Assess enforcement options independently of the frozen reserves. Enforcement of judgment against a Russian commercial counterparty's own assets – movable property, bank accounts, receivables – follows the standard enforcement route through Russian bailiff services or, in some cases, recognition proceedings. This route remains open but is subject to current restrictions and requires local legal support.
- Review Government Commission requirements. Transactions involving "unfriendly state" counterparties require prior authorisation in a number of categories. Any debt-recovery or asset-recovery step in Russia should be mapped against these requirements before action is taken.
- Monitor the Bank of Russia proceedings. The Bank of Russia's claims against Euroclear – both before Moscow courts and before the EU General Court – may produce interim orders or procedural developments that affect the broader asset-freeze architecture. The outcome of those cases is uncertain; companies should not act on assumptions about their resolution.
- Preserve evidence and documentation. Contracts, correspondence, invoices and payment records should be organised and secured now, irrespective of whether enforcement action is immediately planned. This protects your position in any future Arbitrazh court or international arbitration proceedings before the Supreme Court of Russia or an arbitral tribunal.
Practical Implications for Debt Recovery and Asset Freezing
The coexistence of broad asset-freezing measures at the EU level and continuing commercial litigation in Russia creates a complex operating environment. A foreign creditor pursuing debt collection against a Russian company cannot rely on the immobilised central bank assets as leverage or as a fund of last resort. What it can do is pursue the Russian counterparty's own assets through the Arbitrazh court system, seek a payment order where procedurally available, and apply for interim asset-freezing measures (obespechitelnyye mery) at the Russian court level to prevent dissipation of the debtor's assets during proceedings.
Late payment interest under Russian law continues to accrue independently of the sanctions regime, and securing a judgment that captures that interest remains a viable objective. The key variable is the practical enforceability of that judgment given the current restrictions on cross-border transfers and the Government Commission's oversight role.
Our sanctions and trade team works alongside our Russia debt-recovery practice to map these intersecting frameworks for each client situation. For an overview of our Russia-specific services in the area of sanctions and trade compliance, please visit the relevant practice page.
Looking Ahead
The indefinite immobilisation of Russian central bank reserves represents a structural feature of the European economic and legal landscape, not a temporary measure likely to dissolve in the short term. Private creditors should calibrate their strategies accordingly: pursue commercial recovery through available legal channels, do not assume any near-term unlocking of sovereign assets for private benefit, and keep a close watch on the litigation initiated by the Bank of Russia, which could produce legally significant rulings on the scope of EU measures.
International companies holding unresolved claims against Russian entities are encouraged to obtain a structured legal assessment before making decisions on limitation periods, enforcement sequencing, or settlement negotiations. Our Russia practice covers the full chain from Arbitrazh court proceedings to cross-border enforcement, and we are available to advise on the interaction between debt-recovery strategy and the current sanctions framework. Full details of our debt recovery services in Russia are available on our website.
To discuss your company's position in confidence, please contact us at info@ferrazwhitmore.com or use our contacts page.
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.