Proposal would shift frozen Russian assets from Euroclear and Clearstream to a new EU custodian
A proposal presented in Brussels by political commentator Hugo Dixon and co-authors would transfer frozen Russian Central Bank accounts from national depositaries — including Euroclear in Belgium and Clearstream in Luxembourg — onto the balance sheet of a special EU instrument acting as custodian. The mechanism, modelled on the post-Saddam transfer of Iraqi Central Bank accounts, is designed to shield depositaries and Belgium from Russian lawsuits while creating legal and financial groundwork for eventually using the assets in Ukraine's interests. Ukrainian Finance Minister Serhiy Marchenko has publicly backed revisiting the use of frozen Russian assets, citing an acute wartime budget deficit.
Key points
- Proposal presented at an EPC event in Brussels by political commentator Hugo Dixon, with co-authors Lee Buchheit and Daleep Singh.
- Frozen Central Bank of Russia accounts would move from Euroclear (Belgium), Clearstream (Luxembourg) and other EU institutions onto a special EU instrument acting as custodian; Russia's formal ownership would be preserved at this stage.
- The EU would provide full legal and financial protection to depositaries and to Belgium against possible Russian countermeasures or confiscations.
- Because obligations to Russia would pass directly to the EU, Euroclear would no longer need emergency liquidity lines or special state guarantees, removing a source of previous disagreement among member states.
- The proposal draws on the precedent of transferring Central Bank of Iraq accounts after the fall of Saddam Hussein's regime.
- If approved, the scheme would be open to other countries holding significant Russian assets, including the United Kingdom, Canada and Japan; the initiative has the support of several EU member states and some MEPs, though the Belgian government has not yet responded.
- On 15 May a Moscow arbitration court upheld a Central Bank of Russia claim against Euroclear for about 18.17 trillion roubles (around $250 billion at current rates), a ruling Euroclear says it does not recognise.
Why it matters
The proposal offers a new legal route to put frozen Russian sovereign assets to work for Ukraine without immediate confiscation — an approach the European Council previously rejected. It is framed as a way to shield Euroclear, Clearstream and Belgium from the Russian lawsuits and countermeasures that intensified after the Moscow arbitration court's ruling against Euroclear. Ukrainian Finance Minister Serhiy Marchenko has publicly backed revisiting the use of frozen assets, citing an acute wartime budget deficit.
What happened
A proposal to move frozen Russian Central Bank assets from national depositaries onto the balance sheet of a special EU custodian instrument was presented in Brussels by political commentator Hugo Dixon, with co-authors Lee Buchheit and Daleep Singh. Under the mechanism, all frozen Central Bank of Russia accounts held at Euroclear in Belgium, Clearstream in Luxembourg and other EU institutions would be transferred, together with the obligations attached to them, onto a new EU instrument that would act as custodian. Russia's formal ownership rights would be preserved at this stage. The EU would provide full legal and financial protection to depositaries and to Belgium against possible Russian countermeasures or confiscations. Dixon described the proposal as new and distinct from schemes rejected by the European Council the previous year, and said it was intended only as a first stage: the funds would not be transferred to Ukraine immediately, but the mechanism would create the legal and financial groundwork for a next step. Dixon added that the initiative already has the support of several EU member states and some members of the European Parliament, and that if approved at EU level it would remain open to other countries holding significant Russian assets, including the United Kingdom, Canada and Japan.
How Ukrainian sources describe it
The Ukrainian-language coverage centres the proposal on Ukraine's interest. It foregrounds Ukrainian Finance Minister Serhiy Marchenko's call for using frozen Russian assets because of the wartime budget deficit, frames the proposal as a way to outmanoeuvre Putin and unlock financing for Ukraine, and presents the May Moscow court ruling against Euroclear as evidence that the new EU-level mechanism is urgently needed. All three supplied articles are Ukrainian and reproduce the same set of claims attributed to Dixon without independent sourcing beyond Ukrinform.
Where reporting differs
Dixon says the initiative already has the support of several EU member states and a number of members of the European Parliament, but when asked by Ukrinform whether the authors had received feedback from the Belgian government he answered that no such response had yet been received — a tension between the claim of wider political backing and the absence of a response from the country hosting Euroclear.
Background
On 15 May a Moscow arbitration court ruled in closed session in favour of a Central Bank of Russia claim against Euroclear for about 18.17 trillion roubles (roughly $250 billion at current rates, about $230 billion at the time of filing), covering frozen funds, the value of sanctioned securities and lost profits; the claim amount represents about half the size of the Russian federal budget. Euroclear has said it does not recognise the jurisdiction of the Moscow court. Dixon's proposal draws on the precedent of the transfer of Central Bank of Iraq accounts after the fall of Saddam Hussein's regime. Earlier EU proposals required individual guarantees from member states, which the new scheme is presented as removing. Ukraine says it faces a $27 billion deficit this year and that next year's could be larger, though that figure has not yet been confirmed by the IMF or other international donors; the New York Times reports European officials were surprised by the size of the deficit and are questioning the effectiveness of the funds and the justification of Ukraine's needs.