Since Russia’s full-scale invasion of Ukraine in 2022, Western nations have immobilized approximately €260-300 billion in Russian Central Bank reserves. The lion’s share—around €193 billion as of mid-2025—sits in accounts at Euroclear, the Brussels-based international central securities depository (ICSD). While the EU and G7 have already begun tapping the windfall profits from these assets (generating several billion euros annually for Ukraine aid, including a $50 billion G7 loan), outright use of the principal remains politically and legally blocked.
The primary roadblock? Belgium, Euroclear’s home regulator, has repeatedly demanded ironclad, EU-wide legal and financial guarantees before any deeper encroachment. Without “risk mutualization” across all 27 member states, Brussels fears being left holding the bag for potentially catastrophic lawsuits. Euroclear’s CEO, Valérie Urbain, has gone further: in recent interviews, she has not ruled out suing the EU itself if forced into actions that violate international sovereign immunity laws.
But why is Euroclear—and by extension Belgium—so adamant? The answer lies in asymmetric legal warfare and Euroclear’s rapidly expanding footprint in Asia, particularly its deepening ties to Hong Kong and China.
The Hong Kong Pivot: A Double-Edged Sword
In a move that now looks exquisitely timed (or unfortunate, depending on perspective), Euroclear and its sister ICSD Clearstream announced on July 29, 2025, that Bank of China (Hong Kong) Limited (BOCHK) would join their common depository network for Eurobonds—the world’s third-largest debt market, worth over €14 trillion.
Effective August 1, 2025, BOCHK became an official common depository, safekeeper, and lifecycle service provider for new Eurobond issuances. This allows Asian issuers (especially from mainland China) to tap the Eurobond market more efficiently from the start of the Asian trading day, with seamless settlement and custody links back to Brussels.
Euroclear hailed it as a boon for global liquidity and Asia-Pacific integration. BOCHK emphasized its role in “driving financial innovation in Hong Kong” and connecting Chinese investors to international markets.
Yet just months later, this very integration has become a glaring vulnerability in the Russian asset’s saga.
The “China/Hong Kong Lawsuit” Risk: How Russia Could Recover Billions Indirectly
Financial analysts and Euroclear’s own risk assessments have long warned of “mirror” or “counter-seizures.” If the West touches the principal of Russia’s frozen assets, Moscow could:
Sue Euroclear in non-Western jurisdictions where it has operations or correspondent banking ties.
Obtain local court judgments awarding damages equivalent to the seized amount.
Enforce those judgments by freezing or seizing Euroclear’s (or its partners’) assets in that jurisdiction.
Hong Kong is now ground zero for this threat.
Hong Kong courts are independent, English common-law-based, and a premier venue for international finance disputes.
They are not bound by EU sanctions or sovereign immunity defenses in the same way European courts are.
With BOCHK now deeply integrated into Euroclear’s Eurobond infrastructure, Euroclear maintains cash balances, correspondent accounts, and operational exposure in Hong Kong.
Russia (or sanctioned Russian entities) could file suit in Hong Kong, arguing breach of depository duties or unlawful immobilization.
A favorable ruling could lead to immediate attachment of Euroclear-linked assets in Hong Kong—potentially billions—effectively allowing Russia to “recover” value without ever touching the original frozen securities in Belgium.
This is not theoretical. Reuters and other outlets have reported since 2024 that Russia is actively exploring exactly such actions in Hong Kong and Dubai. Over 100 lawsuits from Russian investors are already pending against Euroclear globally, and the Russian Central Bank has signaled readiness for asymmetric retaliation.
The BOCHK tie-up amplifies the exposure: any disruption in Hong Kong could ripple through the €14+ trillion Eurobond market, eroding trust in Euroclear as a “safe” neutral depository.
Broader Implication: The Death of Trust in Western Financial Infrastructure
Euroclear’s leadership has been blunt. Valérie Urbain told Le Monde in November 2025 that full confiscation would be “illegal under international law” and could trigger an exodus of non-Western clients. Asian and Middle Eastern investors—already “scrutinizing” Euroclear heavily—are watching closely. China, holder of trillions in Western securities, has accelerated de-dollarization and built alternatives (e.g., its own CSDS and Hong Kong-based systems) precisely to avoid a “Russian scenario.”
Seizing the principal would signal to Beijing, Riyadh, or New Delhi: Your sovereign assets are fair game in a geopolitical dispute. The result? Accelerated flight from Euroclear/Clearstream toward Chinese or other non-Western depositories, fragmenting global finance and costing Europe trillions in lost custody business over time.
The Current Stalemate
As of November 18, 2025: EU leaders are debating a €140 billion “reparations loan” to Ukraine backed by the Russian principal (without outright seizure).
Belgium continues to veto without pan-EU liability sharing.
Euroclear has ballooned its legal team to ~200 and is retaining billions in sanctions-related profits as a buffer.
Interest/profits continue flowing to Ukraine (€3-5 billion expected in 2025, down due to falling rates), but the €193 billion core remains frozen—and increasingly “safe” from Western hands.
In short, the frozen Russian assets are not going anywhere soon. Euroclear’s bold Asian expansion, meant to future-proof its business, has inadvertently handed Russia a powerful legal cudgel. Until the EU offers Belgium (and Euroclear) bulletproof protection—or until geopolitical winds shift—the principal stays locked. For Ukraine, it’s frustrating. For global financial stability, it may be a bullet dodged.
