Euroclear suspended the unlocking of Russian assets due to US sanctions

Belgian depository Euroclear has suspended all asset services involving the National Settlement Depository (NSD) following its inclusion on the new US sanctions list on June 12. RBC writes about this with reference to the depositary’s letter to clients.

“We are currently analyzing the impact on Euroclear Bank. Until further notice, asset management processes involving NSD, directly or indirectly, have been suspended. “We are also analyzing the impact of the new sanctions on internal free settlements of local Russian securities,” Euroclear said.

Stopping the maintenance of assets with the participation of NSD means suspending the execution of licenses received by the Russians to unlock assets. Upon unlocking, assets frozen since spring 2022 were due to be transferred to NSD, but is now under sanctions. The European Union provided for the unlocking of assets through licenses from European regulators.

There are assets blocked in the accounts of 5 million Russians, the Central Bank of the Russian Federation reported in 2022. At that time, foreign shares owned by individuals were blocked for 320 billion rubles. After the start of the SVO, the Euroclear organization, which also offers settlements with securities, stopped the automatic processing of all transactions with Russians.

In May, the Moscow Arbitration Court accepted the lawsuit of businesswoman Elida Khasanova against the European depository Euroclear for the recovery of 17.8 thousand dollars, including 16.9 thousand dollars for the cost of the redeemed bonds and 902 dollars for the coupon income. For the first time, the claim was satisfied in its entirety and not in part.

Previously, a private investor sued the depositary for $10.1 thousand, although lawsuits were filed for $582.4 thousand.

Investors have filed lawsuits against Euroclear and other depositories that have frozen Russian assets since autumn 2022. At the end of March 2024, Euroclear Bank’s balance sheet amounted to €199 billion, of which €159 billion were Russian assets subject to sanctions, according to the company report.