Russians Attempt to Unfreeze Accounts With 'Clever' Ploy

Written by Henrik Rothen

Jan.17 - 2024 12:38 PM CET

Russians Attempt to Unfreeze Accounts With 'Clever' Ploy.

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Sanctioned Russians are trying to unfreeze their accounts in Belgium based on an old treaty between the former Soviet Union, Belgium, and Luxembourg. This was revealed in the response of the Minister of Finance Vincent Van Peteghem (CD&V) to a parliamentary question from Ecolo MP Samuel Cogolati according to Belgium HLN.

Since the Russian invasion of Ukraine in February 2022, about 200 billion euros in assets of the Russian Central Bank have been frozen in the European Union. Approximately 90 percent of these funds are held at Euroclear, a Brussels-based international institution that custodies securities to settle transactions with these securities. Assets of sanctioned Russian oligarchs are also frozen.

According to MP Wouter De Vriendt (Groen), these outdated agreements “sideline independent national and European courts”. Groen wants to abandon the old 'investment protection treaty'.

This treaty between the former Soviet Union and Belgium and Luxembourg dates back to 1989 and, according to De Vriendt, “prohibits any measure that hinders or makes impossible the management or enjoyment of investments, including financial assets”. Expropriation is also not allowed, except in very specific cases.

From the response of Minister of Finance Vincent Van Peteghem (CD&V) to a parliamentary question from Ecolo MP Samuel Cogolati, it is clear that the Treasury at the FOD Financiën is aware of “Russian requests to release frozen accounts based on” the treaty.

De Vriendt is seeking clarification on this matter. It is unclear, for example, whether it involves accounts of sanctioned Russians at Belgian banks or also the frozen assets of the Russian state at the Belgian financial service provider Euroclear.

“Very Disturbing”

According to Van Peteghem's response, the procedures may be inadmissible because the treaty is intended to protect investors, not to dispute the validity of sanctions.

Nevertheless, Groen finds it “very disturbing” that the treaty is seen by certain Russian entities as a possibility to free up their money. De Vriendt, therefore, advocates abolishing such outdated treaties.

Additionally, according to the Greens, the federal government should take “a more active stance” in arbitration procedures. De Vriendt hopes that the European presidency can be an opportunity “to develop a coordinated strategy against these Russian procedures”.