REPORT: The Kremlin threatens any state that touches frozen Russian assets in Europe

Moscow redefines its economic red lines

On June 24, 2026, as Europe was discussing new ways to use the $300 billion in frozen Russian assets to fund aid to Ukraine, the Kremlin issued an unusually blunt statement: Russia "will go after any state that touches its assets." This was not an impassioned declaration from a second-tier official. It was a deliberate warning, phrased in legal language, backed by court proceedings in European tribunals, and amplified by Foreign Minister Sergei Lavrov.

For Lavrov, funds transferred to Ukraine are "stolen money." For the Russian Central Bank, which filed a complaint before a Luxembourg court against the EU, the immobilization of its assets constitutes a violation of bilateral investment conventions. For the European governments seeking to mobilize these resources to rebuild Ukraine or fund its army, this is the biggest potential disruption to their strategy: not a military attack, but a war of legal procedures waged in the courts of their own capitals.

The context: $300 billion, four years of debate, a decision long overdue

Since the asset freeze decided in February 2022, the European Union — and particularly Belgium, which hosts Euroclear, the custodian of approximately €210 billion of these assets — has been searching for a legally sound formula to use these resources. The initial decision to use only the interest generated by those assets (€3 billion per year) was supplemented by discussions on the possibility of seizing the capital itself.

Russia's June 24, 2026 threats come precisely as those discussions are reaching a critical phase. The G7 had already provided Ukraine with a $50 billion loan backed by the interest from frozen assets. Political pressure to go further — to seize the capital itself — is considerable, but the legal obstacles are real. And Moscow, through its legal threats, is trying to make those obstacles even more daunting.

There is something almost absurd in the fact that Russia, which violates international law in Ukraine every single day, invokes international law to protect its assets in European banks. But absurdity can win in courts — and that is exactly Moscow's wager.

Euroclear and the geography of immobilized Russian assets

Euroclear, the central securities depository based in Brussels, sits at the heart of the mechanism. Approximately €210 billion in Russian Central Bank assets have been immobilized there since the sanctions of February 2022. The remaining portion of the $300 billion total is distributed among other custodians and jurisdictions: Clearstream in Luxembourg, institutions in France, Germany, Switzerland, and other G7 countries.

These assets are not banknotes in a safe. They are primarily government bonds and financial securities that the Russian Central Bank held in those custodians as part of its ordinary management of foreign exchange reserves. Their immobilization did not erase their nominal value — it simply blocked Russia from accessing them. And since 2022, these assets have been generating considerable interest, which accumulates in the accounts of those custodians.

The Russian legal argument: bilateral investment treaties

Russia's legal strategy relies on bilateral investment treaties (BITs) concluded before the invasion. The Russian Central Bank argues that its assets, as investments in European economies, enjoy protections provided by these treaties — including against expropriation without compensation and against discriminatory treatment.

This argument is technically complex and contested. Most lawyers specializing in international law take the view that a state may invoke emergency and national security measures to derogate from BIT protections — and that sanctions linked to a military invasion constitute precisely such measures. But these questions have not yet been definitively settled by competent international arbitration tribunals. And it is this legal grey zone that Moscow is trying to exploit.

Russia uses international law as a weapon because it knows that democracies respect procedures, even when they are being weaponized. That is the structural limitation of the rule of law when facing a bad-faith actor. But this limitation is no justification for shutting down the courts.

A judicial precedent to watch

The Russian Central Bank filed a complaint before a Luxembourg court against the European Union and Clearstream, the securities depository operating from Luxembourg, contesting the freeze of its assets. This proceeding, made public in late June 2026, constitutes an escalation in Russia's legal strategy and potentially creates an important precedent.

If a European court — even in an initial procedural ruling — were to grant the Russian Central Bank any form of temporary access to its assets, or were to recognize the admissibility of its complaint on the merits, the political and financial implications would be considerable. EU member states are watching this proceeding with understandable anxiety. The European Union itself has legal services tracking the case and preparing defense arguments.

The EU's defense arguments

The European Union's position rests on several legal pillars: the sanctions regulation adopted in 2022 is consistent with primary European law, including the articles of the Treaty on the Functioning of the EU (TFEU) authorizing restrictive measures; the assets are "frozen" and not "seized," which legally avoids the characterization of expropriation; and the measures are proportionate to the gravity of the Russian military aggression, which constitutes a violation of jus cogens international law.

These arguments are solid, but not invincible. The case law of the Court of Justice of the EU (CJEU) on individual sanctions has already led to the annulment of certain measures for insufficient reasoning. Russia hopes to find a similar crack in the collective sanctions regime. European lawyers are working strenuously to reinforce these arguments before courts can rule.

What Russia understands very well is that in a rule-of-law state, even a loser can slow down the adversary through procedures. Four years of legal proceedings is four years during which the assets are not being used to rebuild Kharkiv.

A deliberate narrative framing

Sergei Lavrov publicly declared on June 24, 2026 that funds from Russian assets transferred to Ukraine constitute "stolen money." This framing is not incidental. It aims to reposition the narrative: it is no longer the victims of Russian aggression receiving aid financed by their aggressor, but Russia presenting itself as the victim of a theft orchestrated by the West.

This rhetoric is targeted at several audiences simultaneously. For the Global South — countries that distrust Western sanctions as instruments of economic domination — it reinforces the image of a Russia persecuted by the great powers. For less convinced allies within the EU, it feeds doubts about the legality of using the assets. And for the Russian public, it sustains the narrative of a defensive war against a predatory West.

The Western counter-narrative and its weaknesses

The Western counter-narrative — these assets are the price of illegal aggression, not theft — is correct on substance but less effective in its delivery. The problem is that it remains largely confined to Western diplomatic and journalistic spheres, without breaking through in the spaces where the Russian narrative circulates freely: non-aligned press, non-Western social media, diplomatic forums where Russia maintains its influence.

Western communication on frozen Russian assets suffers from a deficit of simplicity. Russia's argument — "your money was stolen" — is simple and memorable. The Western argument — "your assets are immobilized under legal restrictive measures adopted in response to a violation of jus cogens international law constituting a crime of aggression" — is precise but indigestible. That is not a reason to abandon it. It is a reason to reframe it.

Lavrov is a master of framing. "Stolen money" lands better in a tweet than "legal restrictive measures." The West needs to learn to speak simply without lying. That is not impossible — it simply requires an effort that many have not yet made.

A legally robust instrument — but insufficient

In June 2024, the G7 had adopted an approach deemed legally robust: granting Ukraine a $50 billion loan repayable from the future interest generated by frozen Russian assets. This structure legally avoided seizing the capital itself while mobilizing substantial resources. By mid-2026, this loan was being disbursed in tranches allocated to Ukrainian defense and reconstruction.

But $50 billion represents a fraction of Ukraine's needs. The World Bank's estimates of reconstruction costs run into hundreds of billions of dollars. Political pressure to go further — to reach for the capital itself — is understandable. And it is precisely that pressure that Russia's June 24, 2026 threats are trying to counter.

The persistent obstacles to seizing the capital

Several EU member states — notably Germany and some southern European countries — remain deeply reluctant to seize the capital of Russian assets rather than simply using the interest. Their concerns are both legal (risk of unfavorable jurisprudence) and economic (fear that other states may hesitate to entrust their reserves to European custodians if those custodians can be seized without compensation).

These concerns are not without foundation. Confidence in international financial custodians is a public good that takes decades to build and can be quickly eroded by decisions perceived as arbitrary. The lawyers advising European governments are navigating between the political imperative of supporting Ukraine and the institutional risk of undermining the credibility of the European financial system.

The dilemma is real: seizing Russian assets gives Ukraine more resources now, but may weaken the international financial system over the long term. That is not a question that resolves itself through slogans. It demands serious legal thinking — which Russia has not earned, but which the West must undertake regardless.

A multi-forum legal harassment strategy

The Russian Central Bank is not limiting itself to the Luxembourg court. It is conducting a legal harassment strategy across multiple forums simultaneously, relying on international law firms that still agree to represent the Russian state. Proceedings are underway or planned before international arbitration tribunals, in jurisdictions that have not adhered to the Western sanctions regime.

Euroclear, for its part, has built up considerable accounting provisions to manage these legal risks. The costs of these legal defenses are real and not negligible — and they mechanically reduce the amount of interest available for Ukraine support mechanisms. This is another concrete effect of Russia's strategy: even without winning the cases, imposing costs on the adversary.

Risks for private custodians

Private custodians like Euroclear and Clearstream find themselves in a delicate position: they must comply with European sanctions regulations, but they are also private entities exposed to substantial legal risks. Their shareholders — who include banks and financial institutions — are concerned about the exposure of these entities to potentially long and costly legal proceedings.

This tension between the regulatory obligations imposed by governments and the financial risks that those governments create for private entities is unresolved. The solution — recommended by several experts — would be for governments to explicitly guarantee custodians immunity against Russian legal proceedings, or to compensate these entities for the costs of their defense. Such commitments have been slow to materialize, and the hesitation creates additional uncertainty.

Asking Euroclear to bear the political burden of the war in Ukraine without guaranteeing it full legal cover is leaving a private company exposed to the consequences of a political choice. That is neither fair nor sustainable.

The statements and the reality of national positions

Officially, European leaders have responded to Russian threats with firmness. The President of the European Commission and several G7 Finance Ministers reaffirmed that the assets would remain frozen until the conflict is settled and the damage to Ukraine repaired. These statements are important — they signal to Moscow that intimidation is not working.

But the reality of national positions is more nuanced. Some member states are actively pushing for capital seizure; others are quietly braking. Belgium, politically sensitive to the issue because of Euroclear, is seeking to minimize risks to its national financial infrastructure. Germany is balancing its support for Ukraine against concerns about legal certainty. And the central European countries, Ukraine's most ardent supporters, are not the ones bearing the direct financial weight of any potential legal proceedings.

The role of the EU Council rotating presidency

Coordination among member states on the Russian assets question is complicated by the fact that it involves multiple decision-making levels — the EU Council, the Commission, national governments — with overlapping competences and diverging interests. The Council's rotating presidency, which changes every six months, also introduces discontinuity in the follow-through on such complex dossiers.

Poland, holding the Council presidency in the first half of 2025, had pushed actively on this issue. Its successors have maintained the pressure but with different shades of priority. The result is a European position that is coherent in its broad principles but slow in its practical implementation — which indirectly favors Russia's strategy of legal procrastination.

Europe is good at adopting principles and slow at executing them. Russia has learned to exploit that interval. This is not a sweeping critique of the EU — complex democracies work this way. It is a problem that urgently needs to be corrected on this specific dossier.

Frozen assets that were used to pay damages

There are precedents for using frozen assets to compensate the victims of an aggressor state. Iranian assets frozen in the United States since 1979 have been the subject of multiple American court rulings, some of which granted compensation to victims of Iran-sponsored terrorism. Libyan assets frozen after UN sanctions were partially used to fund damage settlement procedures for the Lockerbie and UTA bombings.

These precedents all have in common that they required a specific legal framework — often ad hoc national legislation — to enable seizure or compensation. They were all also legally contested, sometimes for decades. Ukraine and its partners draw on these precedents to argue that seizing Russian assets is legally possible. Russia cites them to show that the process will be long and chaotic.

Differences from the Russian case

The Russian case has significant differences from these precedents. Iran and Libya were regional powers with assets frozen primarily in the United States, a single jurisdiction. Russian assets are distributed across 30 to 40 different jurisdictions, which considerably complicates any coordinated legal proceedings. Moreover, the amount at stake — $300 billion — is unprecedented in the history of international sanctions.

This difference in scale changes the nature of the problem. A uniform and coordinated legal decision across 30 to 40 jurisdictions simultaneously has never been achieved. It is an institutional challenge of unprecedented complexity — and that is precisely why Russia is betting on the division and slowness of its Western adversaries.

$300 billion, 30 jurisdictions, an ongoing war — and Moscow's lawyers making obstructions in each one. This is not a chess match. It is a legal war of attrition, and the West must wage it with as much determination as the military war.

Ukraine's post-war financial needs

Estimates of Ukraine's reconstruction costs vary by methodology and scenario, but they converge on considerable figures. The World Bank and the Ukrainian government estimated medium- and long-term reconstruction needs at more than $500 billion in 2024 — a figure that has worsened with every additional month of missile strikes on Ukrainian infrastructure.

The $300 billion in frozen Russian assets represents approximately 60% of estimated needs. That is the main reason why their use is politically imperative for Ukraine's partners: without those resources, reconstruction cannot be funded except through massive and sustained transfers from the national budgets of EU and G7 member states — a political commitment that is difficult to sustain over the long term.

Interest already mobilized — and its limits

The interest generated by frozen Russian assets amounts to approximately €3 billion per year for the portion held at Euroclear alone. This interest has begun to be used through the G7 loan mechanism to fund Ukrainian defense and reconstruction. But €3 billion per year, against needs of $500 billion, is a drop in the ocean.

Even totaling all current Western aid flows — the $150 billion in total aid since 2022 according to the Kiel Institute's Ukraine Support Tracker — Ukraine remains far short of the resources needed for reconstruction. Mobilizing the capital of Russian assets is not one option among others: it is the financial precondition for a lasting peace.

$500 billion in needs, €3 billion in interest per year — the math is merciless. Either Europe finds a legal framework for using the Russian capital, or it commits to financing the reconstruction from its own budget for a hundred years. I know which of those options is more realistic.

Who holds the key to unfreezing?

Potential peace negotiations between Russia and Ukraine — whose outlines remain unclear in June 2026 — will inevitably include the question of frozen assets. For Moscow, the unfreezing of these assets is an existential economic issue: without these resources, Russia's post-sanctions economic reconstruction will be considerably slowed. For the West, these assets represent the main remaining economic leverage once a hypothetical ceasefire is concluded.

That is why Russia's June 24, 2026 threats must be read on two levels. At the immediate level, they aim to deter Europeans from going further in mobilizing the assets. At the strategic level, they are staking out positions for future negotiations: Moscow is signaling that the unfreezing of its assets will be a condition of any peace deal, and that it is prepared to use all available legal proceedings to maximize its negotiating position.

The Lavrov effect on European capitals

Lavrov's declarations about "stolen money" circulate in European capitals and fuel domestic political debates in countries where public opinion is less solidly pro-Ukrainian than in 2022. In Hungary, Austria, and among certain opposition parties in Germany and France, these declarations are being used as an argument against seizing Russian assets.

This is not the majority of European public opinion. But it is a sufficiently influential minority to complicate political decisions. And Russia, which can no longer win militarily on the ground, is betting on this diffuse influence to slow Western action on the assets — buying time to prepare its legal arguments and consolidate its negotiating position.

Lavrov has understood that information travels faster than political decisions. He is speaking to the few percentage points of European public opinion that waver — and in a democracy, a few percentage points can bring down a government. That is his strategy. It needs to be named clearly.

The proposal for a UN General Assembly resolution

Among the paths explored by Western lawyers and diplomats is the possibility of a United Nations General Assembly resolution explicitly recognizing the right of states to use the assets of an aggressor state to compensate the victims of its aggression. Such a resolution would not be binding — unlike Security Council decisions, which are blocked by the Russian veto — but it would provide considerable political and jurisprudential backing to states wishing to go further.

This path runs into the reality of voting balances at the UN. Several countries of the Global South are reluctant to support a principle that might one day be applied to their own assets in countries that disapprove of their conduct. The coalition needed to secure a qualified majority in the General Assembly exists — Ukraine has demonstrated this on other resolutions — but it requires sustained diplomatic effort that not all partners are willing to make.

The national legislative framework: the American path

The United States adopted in 2024 the REPO Act (Rebuilding Economic Prosperity and Opportunity for Ukrainians Act), authorizing the president to seize sovereign Russian assets held in American financial institutions. Russian assets in the United States represent only a fraction of the total — approximately $5 billion — but American legislation could serve as a model for similar legislation in Europe.

The problem is that Russian assets are held primarily in Europe, and European states — bound by EU law — cannot act unilaterally as the United States can. An effective European response requires either an ad hoc EU regulation or a directive adopted by qualified majority in the Council. Both options are politically complex in the current context.

The Americans passed the REPO Act. Europeans are still debating. This gap is not trivial — it says something about the different capacity of the two political systems to act quickly in an unprecedented situation. This is not an easy criticism to make: the EU is a complex construction. But it is a delay that Ukraine is paying for in concrete terms.

The precedent of accelerated de-dollarization

One of the most serious concerns raised by financial experts is that seizing Russian assets — especially if done unilaterally and without a clear legal framework — could accelerate trends toward de-dollarization and "de-euroization" in emerging economies. If Gulf, Southeast Asian, or Latin American countries conclude that their reserves are not safe in Western financial institutions in the event of a political conflict, they will diversify their reserves toward other currencies and other custodians.

This concern is real, but needs to be put in perspective. Global South economies have no realistic short-term alternative to the security of Western financial institutions: the renminbi is not freely convertible, Chinese financial markets are not as transparent, and alternative financial institutions like the BRICS New Development Bank have neither the size nor the reliability of Euroclear or the SWIFT system. The threat of de-dollarization is real over the long term, but not imminent.

The credibility of the sanctions system as an international public good

Beyond the immediate risks, the question of frozen Russian assets touches on something more fundamental: the credibility of the international sanctions system as a deterrence tool. If states that violate international law know that their assets in Western financial institutions can be used to repair the damage they have caused, the threat of sanctions becomes more deterrent. If, on the contrary, they know that prolonged legal proceedings can indefinitely preserve their assets, the sanctions tool loses effectiveness.

This consideration extends beyond the Ukrainian case. It concerns the capacity of the international community — or the Western bloc in particular — to build credible non-military deterrence tools against state aggression. How the question of Russian assets is resolved will set a precedent for generations to come.

The decisions taken on Russian assets in 2026 will be cited in international law courses in 2050. That is not a reason to act hastily — it is a reason to act with both rigor and courage.

Beijing observes, calculates, and stays clear

China, the world's second-largest economy and Russia's main trading partner, is watching the legal battle over Russian assets with obvious interest. It does not take a public position in favor of Moscow on this specific issue — the People's Bank of China itself holds considerable reserves in Western financial institutions, and it has no wish to create a precedent that would legitimize their potential seizure.

This ambiguous position of Beijing — supporting Russia diplomatically while avoiding association with its legal arguments on frozen assets — reveals the sophistication of China's calculation. China prefers to maintain a position of plausible neutrality on international financial questions, while supporting Moscow on political matters. It is a coherent strategy — and a dangerous one for the liberal international order.

BRICS as a platform for the counter-narrative

BRICS meetings have been used by Russia to spread its narrative on frozen assets among emerging economies. Arguments about the "weaponization of the dollar" and the euro, about the use of financial instruments as geopolitical weapons, find a receptive audience in countries that have themselves been the target of Western sanctions in the past.

Russia is seeking to build a coalition of countries that — even without supporting its military aggression — might support the idea that sovereign assets should not be used to fund military operations. This is an instrumentally coherent position for any country wary of Western financial power. And that is precisely why the West must ensure that the legal framework it builds for using Russian assets is beyond reproach — not to satisfy Moscow, but to maintain the credibility of its institutions with the rest of the world.

China does not want its assets to be frozen one day by a displeased West. That is its real motivation in this dossier. Understanding that motivation means understanding the financial geopolitics of the century ahead.

Zelensky and the assets: a consistent position since 2022

For Zelensky and the Ukrainian government, the question of Russian assets is one of elementary justice: the aggressor must pay for the damage it has caused. This position has been consistent since 2022 and rests on well-established precedents in international law — notably the principle of state responsibility and the right to reparations for victims of a crime of aggression.

Ukraine has systematically encouraged its partners to go further on this issue, by providing detailed estimates of the damage sustained, by supporting the process of the International Claims Commission envisaged in the framework of the Special Tribunal for the Crime of Aggression, and by signaling to its allies that Russian legal threats should not deter action.

The solidarity of the closest partners

The countries closest to Ukraine — Poland, the Baltic states, Finland, Sweden, the United Kingdom — are actively supporting the seizure of Russian assets and working to build the necessary legal framework. These countries, which viscerally understand what it means to live in Russia's neighborhood, are not discouraged by Lavrov's threats.

It is this coalition's responsibility to maintain pressure on the more hesitant partners — Germany, France, southern European countries — and to build a European consensus strong enough to withstand Russian legal proceedings. That is not an easy task. But it is the only one that allows Ukraine to emerge from this war with the resources needed for reconstruction.

The Baltic states know what it means. Poland knows what it means. Their impatience with the hesitations of some Western partners is legitimate — and their determination is the best antidote to Moscow's intimidation.

The real red line is in Brussels, not Moscow

Russia's June 24, 2026 threats are real, but they are not irresistible. Russia cannot forcibly recover its assets from European financial institutions. It can only try to freeze them indefinitely through legal proceedings, hoping that the political and legal fatigue of Western partners will eventually produce a negotiation that lets it recover them in exchange for a ceasefire.

The real red line is therefore not in Moscow. It is in Brussels, Berlin, Paris, and Washington. If Western governments maintain their unity, legal rigor, and political determination, the $300 billion in Russian assets can finance Ukrainian reconstruction. If threats, war fatigue, or domestic political calculations take over, it is the victims of Russian aggression who will pay the price of Western hesitation.

What history will remember

In a hundred years, the historians who study this period will examine the question of frozen Russian assets as one of the major tests of the solidity of international law in a world of great powers. Will the West be able to find the legal framework to honor its implicit promise to Ukraine — the aggressor will pay —, or will it yield to the pressure of a Russia that continues to bet on the division and procrastination of its adversaries?

The answer to that question does not lie in Lavrov's declarations. It lies in the decisions that will be taken in the coming months, in the carpeted offices of European finance ministries, in the deliberation rooms of the CJEU, and in the discreet negotiations of the international lawyers searching for a path between justice and prudence. Ukraine is waiting. International law is waiting. History, for its part, is taking note.

By Maxime Marquette, columnist

Editorial stance

I am not a journalist but a columnist and analyst. My expertise lies in observing and analysing the geopolitical, economic and strategic dynamics that shape our world. My work is to take political strategies apart, to understand global economic movements, to put the decisions of international actors in context and to offer analytical perspectives on the changes that are redefining our societies.

I do not claim the cold objectivity of traditional journalism, which stops at reporting facts. I claim analytical clarity, rigorous interpretation and a deep understanding of the complex issues that concern us all. My role is to give meaning to the facts, to place them in their historical and strategic context, and to offer a critical reading of events.

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Nature of the analysis

The analyses, interpretations and perspectives in the analytical sections of this article are a critical, contextual synthesis based on the information available, the trends observed and the expert comments cited in the sources consulted.

My role is to interpret these facts, to set them in the context of today's geopolitical and economic dynamics, and to give them a coherent meaning within the larger story of the changes shaping our time. These analyses reflect expertise built through continuous observation of international affairs and an understanding of the strategic mechanisms that drive global actors.

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