A private investor managed to unlock assets frozen in Euroclear

The Belgian Ministry of Finance began to review refusals to unlock assets in Euroclear – this was achieved by a private investor with an EU residence permit and accounts in Switzerland. The complaint was considered less than a month. But a large number of applications submitted can significantly lengthen the review time, experts warn.

Partner of the multi-family office ITSWM Igor Kuznets told Kommersant about the first example of the Belgian Ministry of Finance reviewing the refusal to unlock assets in Euroclear. According to him, in early January, a private investor, who had securities worth $10 million in two brokerage accounts, applied for the release of assets and the dividends and coupons due on them. The investor himself has an EU residence permit and asked for the transfer of papers and funds to accounts in a Swiss bank.

However, based on the results of consideration of the submitted documents in April, it was possible to obtain a license only for unlocking coupons and dividends. With respect to the securities of one broker, a refusal was issued, and no decision was made on the second. According to Mr. Kuznets, a complaint was filed with the Belgian Ministry of Finance with a request to review the decision, as well as with the Belgian State Council as part of an appeal against the decision of the state body.

As a result, the applicant was issued licenses to unlock securities on the account of one of the brokers, taking into account their retention in the EU or Switzerland, as well as to transfer coupons and dividends. The response to the complaint was received within less than a month.

To unlock assets in Euroclear, an investor needs to apply to the Belgian Ministry of Finance with a package of documents confirming the registration of assets in the European depository through NSD, as well as the acquisition of the relevant instruments before the inclusion of NSD in the sanctions list, the level of income that allows the acquisition of such assets, notes a partner in the practice of commercial disputes MEF Legal Rimma Malinskaya. You also need to specify an account in a neutral jurisdiction to which you plan to transfer assets.

With Clearstream, the situation is more complicated. “At the moment, general conditions for obtaining individual licenses have not been adopted in Luxembourg,” said Ms. Malinska.

The key to a positive decision will be the presence of a significant evidence base on the unauthorized status of the entire current and proposed chain of ownership of securities, emphasizes Evgenia Bitsenko, investment manager at Tomashevskaya & Partners.

She notes that the revised decisions are more detailed and meaningful, clarifying the position of the regulator.

Lawyers interviewed by Kommersant also called it an advantage to have a European residence permit and active open accounts in European banks for an investor. Previously, several cases of asset release were reported in relation to citizens with a residence permit in Europe and at least one without a residence permit (see “Kommersant” dated June 28).

The deadlines for filing applications for unblocking assets depend on the grounds for filing an application chosen by the applicant and on the status of the applicant himself, says Yakov Prisyazhnyuk, head of the practice of resolving economic disputes at the De Jure Law Office. In particular, strict deadlines were set for credit institutions and brokers and for a special reason for releasing assets frozen in NSD’s accounts. However, in the case of private investors, according to lawyers, no specific deadlines for filing an application have been set.

Despite the encouraging precedent with the Belgian Ministry of Finance, experts say, investors should not count on a quick solution to the issue. A large number of submitted applications, Dmitry Lesnov, head of the Finam client service development department, warns, may increase the time for their consideration.

Ksenia Kulikova, Ekaterina Volkova