The Russian Embassy in Colombo issued a strongly worded press release on October 20 warning that any attempt by the European Union to redirect frozen Russian sovereign assets held in Europe would be treated by Moscow as theft and will trigger reciprocal measures.
The Embassy’s statement refers to an initiative disclosed by the European Commission on September 26, 2025 — described by Brussels as a “Front-loading Russian Reparations to Ukraine Initiative” — that would make use of funds that have accumulated in the Belgian depository Euroclear as Russian bonds matured but could not be transacted because of EU restrictions first introduced in February 2022. The Commission estimates the Euroclear-held portion of Russia’s sovereign assets at roughly €176–€185 billion.
According to the Embassy, the EC proposal envisages a Tailored Debt Contract with Euroclear at zero interest, allowing the EU to use the proceeds to finance a Limited Recourse Loan to Ukraine that Kiev would only be obliged to repay if and when reparations were awarded by Russia. The release portrays the plan as an attempt to invent pseudo-legal mechanisms to make frozen Russian assets available to Kyiv.
The Russian statement notes significant division inside the EU over the plan, singling out Belgium and Luxembourg — where major Russian state assets are held — as principal opponents. It cites Belgian Prime Minister Bart De Wever’s public doubts about any transfer of funds from Euroclear and his demand for formal intra-EU guarantees regarding legal, financial and reputational risks. The Embassy also mentions Austria’s insistence that its neutral status be respected, a cautious stance from European Central Bank President Christine Lagarde calling for thorough legal and risk review, and opposition from Hungary and Slovakia.
The Embassy warns in unequivocal terms that Moscow will regard any unauthorized transactions with frozen Russian holdings as “grand theft and robbery” and says such actions would be “legally null and void under international and contract law.” The press release pledges reciprocal measures “in accordance with the principle of reciprocity” and warns that Russia has “a wide range of countermeasures and capabilities to compensate for the resulting damages.”
Beyond legal retaliation, the Embassy argues the move would damage the EU’s reputation as a safe haven for financial assets, undermine confidence in the euro and the EU financial sector, trigger capital flight from Western markets, and create fresh macroeconomic problems — risks the statement frames as potentially leading to broader deterioration of the Western economy.
The release also asserts that diverting the frozen funds will not save Ukraine, which Moscow describes as “de-facto bankrupt” and unable to pay debts or obtain reparations from Russia. As a result, the Embassy insists, the EU would ultimately bear full responsibility — including criminal liability, in Russia’s view — for any loans it provides to Kyiv using those assets.
The Russian Embassy concluded by reiterating its warning that any confiscation or unauthorized use of Russia’s sovereign assets will be met with measures that “are going to hurt,” and by placing responsibility for the consequences squarely on the European Union.
