European Union leaders are grappling with a pivotal legal question as they deliberate a plan to use billions in frozen Russian state assets to support Ukraine. The core issue is whether the bold proposal to seize these funds is legally robust. Even if approved, experts suggest Russia would face a severely constrained battlefield in the courts to fight it.
The EU's Plan and Belgium's Key Concerns
The 27-nation bloc is poised to decide on using tens of billions of euros in frozen Russian Central Bank assets, held largely in the Belgium-based financial clearinghouse Euroclear, to underwrite a loan for Ukraine's military and financial needs over the next two years. However, a major stumbling block has emerged. Belgium has demanded ironclad guarantees that it will be shielded from any form of retaliation—legal, financial, or otherwise—before it agrees to the plan.
Belgian Prime Minister Bart de Wever emphasised on Thursday, 18 December 2025, that any EU proposal must account for the "financial risks arising from the bilateral investment treaty" between Belgium and Russia, signed in 1989 to encourage economic ties. This treaty has become a focal point for liability concerns.
Russia's Limited Avenues for Legal Recourse
Russia has already begun testing the legal waters. Last week, its Central Bank filed a complaint at Moscow's Arbitration Court against Euroclear, seeking to recover assets frozen since the full-scale invasion of Ukraine began on 24 February 2022. The lawsuit claims the "illegal blocking and use" of its assets. However, a victory in a Russian court would be largely symbolic. For over a decade, the EU has banned the enforcement of Russian court judgments related to these frozen assets.
According to lawyer Patrick Heinemann, who co-authored a legal risk analysis on the topic, the arbitration options in the 1989 treaty are limited and designed for disputes between private investors and the state, not for state-to-state conflicts like this one.
Other theoretical options are fraught with peril for Moscow. Russia could attempt to sue in domestic courts worldwide where its assets are held, but this would require it to waive its sovereign state immunity, opening itself to a host of other unrelated lawsuits. Any defendant state would also have to waive its own immunity for the case to proceed. A direct case against Euroclear in a Belgian court would leave Russia vulnerable to a countersuit, with any judgment likely unenforceable in Belgium.
International Courts Offer Little Solace for Moscow
As a non-member, Russia could attempt to contest an EU decision at the bloc's top court, the Court of Justice of the European Union in Luxembourg. While rare, non-member states have tried this route before; Moscow itself previously challenged EU sanctions packages, only to have its complaint ruled inadmissible. Similarly, Venezuela's case against EU sanctions was unsuccessful, with judges affirming Brussels's wide latitude on foreign security policy.
The door to the European Court of Human Rights was closed when Russia was expelled following its 2022 invasion. The United Nations' International Court of Justice (ICJ) in The Hague is also an unlikely arena. Mike Becker, an international law expert at Trinity College Dublin, notes that no treaty clearly gives the ICJ jurisdiction over such a case. A recent legal white paper by firm Covington & Burling concurred, highlighting that Russia does not accept the court's compulsory jurisdiction.
The converging legal opinions paint a clear picture: while politically explosive, the EU's plan to fund Ukraine with frozen Russian assets is being constructed within a legal fortress that leaves the Kremlin with remarkably few keys to unlock.
