By John O’Donnell
BRUSSELS (Reuters) -Euroclear plans to seize and redistribute about 3 billion euros ($3.4 billion) of Russia’s funds that are frozen at the Belgian clearing firm after Moscow grabbed investor cash in Russia, according to documents seen by Reuters and people familiar with the matter.
The money will be used to compensate Western investors after Moscow seized cash held in Russia in recent months, three people said, escalating attempts by both sides to recoup billions in funds affected by the war in Ukraine.
Euroclear will redistribute 3 billion from a pool of 10 billion euros in cash belonging to Russian entities and individuals hit by European Union sanctions following Moscow’s 2022 invasion of Ukraine, two of the people said.
The move, reported in detail here for the first time, marks a new level of reprisal by Europe. The European Union changed its sanctions regime late last year, allowing a disbursement to Western investors in such circumstances.
In the past, the West has engineered loans and payments to Ukraine from the interest on frozen Russian assets, which Russian President Vladimir Putin has denounced as theft.
The planned Belgian payout was triggered by Russian government orders to confiscate billions from Western investors last year. Euroclear has been under pressure from international investors to release money. Reuters could not determine which of them would benefit from payout.
Euroclear in March gained clearance from Belgium, its principal legal authority, to make the payout, according to the people who spoke to Reuters.
Euroclear has notified clients of the upcoming payments in an April 1 briefing document, reviewed by Reuters.
“We received authorisation from our competent authority, to unfreeze the compensation amounts and make these available to our participants,” the document said.
Reuters could not establish the identity of the Russian owners whose assets will be seized.
Belgium’s government declined to comment, while Russia’s finance ministry did not respond to a request for comment.
Euroclear has emphasised that it implements sanctions but the company does not take decisions about the shape of sanctions or their lifting.
The payments to Western investors won’t dip into the more than 200 billion euros of Russian central bank reserves that have been frozen in the EU, the two people said.
It will, however, reduce the stockpile of Russian wealth, that includes cash, shares and bonds, held almost entirely at Euroclear that gave the bloc leverage over Moscow. Some hoped frozen Russian assets could be used to rebuild Ukraine.
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