Russian central bank says EU plans to use its assets are illegal

Russia's central bank said on Friday that plans by the European Union to use its assets were illegal and that it reserved the right to employ all available means to protect its interests.

In a separate statement, the central bank said it was suing Brussels-based financial institution Euroclear – which holds many of the assets – in a Moscow court over what it said were damaging actions, affecting its ability to dispose of its funds and securities.

"Mechanisms of direct or indirect use of the assets of the Bank of Russia, as well as any other forms of unauthorized use of the assets of the Bank of Russia, are illegal and contrary to international law, including violating the principles of sovereign immunity of assets," the bank said.

Euroclear, the Belgian government and the European Commission did not immediately respond to requests to comment.

The central bank referred to a Commission press release, published on December 3, which outlined two solutions to support Ukraine's financing needs in 2026 and 2027.

Under one of those solutions, the Commission would be able to borrow cash balances from EU financial institutions holding frozen assets of the Russian central bank to issue a reparations loan for Ukraine.

Russian officials have repeatedly said such action would be met with "the harshest reaction".

Friday plan to abandon six-monthly vote 

European Union governments want to agree on Friday to freeze Russian central bank assets immobilised in Europe for as long as necessary, replacing the need for a vote to renew the freeze every six months, EU diplomats said.

The European Commission has proposed using a provision of the EU treaty, Article 122, to keep the assets frozen indefinitely. The Commission favours a "reparations loan" using the immobilized assets for a loan to keep Ukraine financed in 2026 and 2027 for its conflict with Russia.

Russia's central bank said implementation of such plans would be challenged in "national courts, judicial authorities of foreign states and international organizations, arbitral tribunals and other international judicial instances, followed by the enforcement of judicial decisions in the territories of UN member states."

Orban: Hungary protests 'unlawful' step 

In a Facebook post on Friday, Hungary Prime Minister Viktor Orban said his country protests what he called the EU's "unlawful" step against Russia.

"Brussels will step over the Rubicon today, with a written voting starting which will cause irreparable damage to the Union," Orban said. "Hungary protests the decision and will do its best to restore a lawful situation."

Agreeing to freeze the assets indefinitely would eliminate the power of any EU country to veto an extension in the biannual votes. Hungary and Slovakia have previously vetoed EU action against Russia.