Valerie Urbain has warned against the EU using the funds as collateral for a massive Ukraine loan

Belgian clearinghouse Euroclear could sue the EU if the bloc tries to confiscate the Russian sovereign funds held there, CEO Valerie Urbain told Le Monde in an interview published on Saturday.

The depository, which carries roughly $46 trillion in securities for global financial institutions in any given year, currently holds around $200 billion of the $300 billion in Russian Central Bank assets frozen in the West after the escalation of the Ukraine conflict in 2022.

Anything resembling confiscation would be illegal, and Euroclear is prepared to sue the EU if the bloc tries to force its hand on the matter, Urbain said.

"There are laws. Depending on the legal framework, we will decide what we can and want to do," she added.

Legal action is "not out of the question," Urbain said when asked to elaborate.

European Commission President Ursula von der Leyen has been pushing to use frozen Russian assets to back a €140 billion ($160 billion) loan to Ukraine, an initiative that Belgium has opposed, insisting on guarantees that the legal and financial risks will be shared across the EU.

The bloc's decision to reclassify interest gained from the immobilized funds as "windfall profits" not belonging to Moscow - and to use them to fund Kiev - has already stretched legal definitions.

However, Ukraine's Western backers can no longer afford to keep funding it without seizing Russia's sovereign funds, according to recent publications in theEconomistandFinancial Times.

Kiev has also struggled to secure a new loan from the International Monetary Fund, which has been further complicated by the massivecorruption scandalrecently uncovered in Ukraine.

According to the country's KSE institute, Kiev's collapsing budget faces a $53 billion a year shortfall - one that Western sponsors are expected to cover.

Moscow has long stated that it will view any attempts to confiscate its Central Bank assets as a "theft" that would fundamentally undermine third countries' trust in Western financial institutions.

(RT.com)