Europe earns hundreds of millions on the frozen assets of Russia: how to return them

Previously, the European Commission “lost” 300 billion euros

The frozen assets of Russian business do not lie dead weight on foreign accounts. The owners of depositories, where the foreign exchange capital of our state is stored, have found a way to make money on the financial resources of domestic businessmen who fall into the category of “toxic”. In particular, the Belgian authorities admitted that they received an income of 625 million euros on the arrested property of entrepreneurs from Russia. It is impossible to recover the “dividends” received by the West, at least as long as Western sanctions pressure is in place, experts believe.

The fact that the Russian financial assets frozen in Belgium made it possible for Brussels to receive a “windfall” in the amount of 625 million euros was admitted by the treasury of this European country. Additional funds were “discovered” during the regular procedure of budgetary control of local regulators. Specific data was disclosed by the international depositary Euroclear registered in Belgium. It was this business center, to their sorrow, that many domestic businessmen used to conduct trade operations with their foreign partners. Numerous Western sanctions packages on Russian export industries have excluded our businessmen, who previously used the services of this international settlement base, from the list of clients.

The money accumulated by the Russians in the accounts could hang in the air, but the Belgian financiers decided to put them into action: since payments on coupons and maturing bonds lead to an increase in the volume of financial resources, it was decided to use them to replenish the income of the depository itself. As a result, at the end of last year, Euroclear received more than 625 million euros of interest from the savings of Russian savings (and 820 million without paying taxes).

This amount is comparable to the annual net profit of a large Russian banking organization or a commodity company. In total, Belgium has restricted access to more than 250 billion euros of Russian assets and leads Europe in this indicator. “We have frozen 192 billion euros of transactions and 59 billion euros of assets,” said Alexandre de Geest, general manager of the country’s treasury administration.

Legal claims cannot be made against Euroclear. Experts say. “The depository operates within the legal framework and can use the money on the balance sheet to generate income,” explains Artem Tuzov, Director of the Corporate Finance Department at IC IVA Partners. — It has always been a big revenue item for Euroclear. Now the accumulated and earned funds are credited to the accounts, but they are not transferred to the holders, which allows the depository to sharply increase its income. Theoretically, Russian clients have the opportunity to receive blocked funds sooner or later, however, the income from the placement of these funds will remain in Euroclear.”

The Europeans, it seems, have already found a way to skim “financial cream” from the money inaccessible to the Russians. Frozen funds serve as excellent support for the budget of European countries. In particular, according to The Brussels Times, Belgium needs to cut its spending by 12 billion euros over three years in order to reduce the budget deficit below the EU level to 3% of GDP. “The projected hole in the budget of this state in 2023 exceeds 27 billion euros. Apparently, the frozen assets of the Russians will become a “cash cow” for Brussels,” warns investment strategist at Arikacapital Sergei Suverov. According to experts, out of more than a thousand applications filed by our compatriots in European courts for the right to dispose of their assets, only a third have been considered today. For how many of them gave a positive answer – it is not known for sure. The procedure lasts for more than a year, so it can be assumed that the process of discussing the remaining cases will drag on for many months. During the time when Russian assets are physically in the hands of European legal authorities, the budgets of the states that have imposed sanctions on our country will be able to earn a lot of money and significantly replenish their financial “stash”.

According to experts, in the current conditions, Russia does not have either financial or legislative mechanisms to influence the West regarding the use of frozen assets. “European countries dispose of the assets belonging to our country at their own discretion, although this is contrary to world standards,” says Vladislav Antonov, financial analyst at BitRiver. — The European Commission admits that it still does not know the exact location of Russia’s frozen assets of 300 billion euros. However, Western “amnesia” has its beneficiaries. They also manage the finances received in their own hands. Interest on such assets can be received by both institutional investors and specific countries. The trace of these funds (that is, to understand which companies or state budgets will receive dividends) is almost impossible to detect. In addition, it is unlikely that any of the Western law firms will sign up for such an investigation in the foreseeable future.”

Meanwhile, Moscow has also taken retaliatory steps to freeze the assets of foreign investors, limiting access to the disposal of their property in our country. “Those who want to leave Russia can sell their property at a discount of 50% of the market value,” notes Tuzov. “Given the situation with sanctions, prices for foreign capital in our country have decreased. Foreigners are selling Russian assets at a discount of 70-80% – this is a response to the illegal actions of the sanctioners.