Bank of Russia v. EU: > $200B Other

On 12 December 2025, the EU adopted Council Regulation 2025/2600 under Article 122 TFEU, immobilising roughly EUR 210 billion of Bank of Russia reserves indefinitely until Russia ends the war and pays reparations, decoupling the freeze from six-month sanctions renewals and paving the way for a reparations loan to Ukraine. The Bank of Russia lodged an annulment action at the General Court on 3 March 2026 alleging breach of property rights, state immunity, lack of judicial protection and a wrong legal basis. It filed a second claim in May 2026.

LATEST DEVELOPMENT · SEP 9, 2026

The Bank of Russia filed a second General Court claim on 25 May 2026. On 9 September 2026, the EU court dismissed Hungary’s separate challenge to the Ukraine aid mechanism funded by the immobilised assets.

BACKGROUND

In December 2025, the Council of the European Union adopted Regulation (EU) 2025/2600 under Article 122 TFEU, moving away from the prior system in which the freeze on roughly EUR 210 billion of Bank of Russia reserves had to be renewed by unanimous vote every six months. The new regulation immobilises the assets indefinitely, conditioning any release on Russia ending its invasion of Ukraine and paying reparations, and clears the way for the EU to draw on cash balances generated by the frozen reserves to fund a loan package for Ukraine.

The Bank of Russia responded by lodging an action for annulment at the General Court of the European Union in Luxembourg, submitted around 27 February 2026 and publicly announced on 3 March 2026. It argues the regulation violates its property rights, disregards sovereign immunity, denies it effective judicial protection, and rests on the wrong legal basis under the EU treaties. The bank filed a second, related action on 25 May 2026 targeting the follow-on regulation that lets the EU channel proceeds from the immobilised assets into a roughly EUR 90 billion loan for Ukraine.

The dispute sits alongside a parallel and separate proceeding the Bank of Russia brought against Euroclear at the Moscow City Arbitration Court in December 2025, seeking recovery of the blocked funds and damages under Russian law, a case Russian courts have used to press Euroclear directly. Hungary separately challenged the EU mechanism funding Ukraine aid from the immobilised assets, a case the General Court dismissed on 9 September 2026, though that ruling does not resolve the Bank of Russia’s own annulment actions, which remain pending.

No hearing date or judgment has been reported as of September 2026. The outcome will determine whether the EU can keep the reserves immobilised indefinitely outside the sanctions-renewal cycle and whether the reparations loan structure built on those assets can proceed, with implications for how central banks worldwide view the safety of holding reserves in euros.

TIMELINE

SEP 9, 2026JUDGMENT

General Court dismisses Hungary’s separate challenge to Ukraine aid mechanism

In a related but distinct case, the General Court dismissed Hungary’s challenge to the EU mechanism funding Ukraine aid from the immobilised Russian assets. The Bank of Russia’s own annulment actions remain pending.

Central Bank of Russia challenges EU over frozen assets in court, raising questions about institutional trust
MAY 25, 2026FILING

Bank of Russia files second General Court claim over reparations loan mechanism

The Bank of Russia lodged a second action at the General Court challenging the regulation enabling the EU to fund a roughly EUR 90 billion (about $105B) loan package to Ukraine using proceeds from the immobilised assets.

Russia's Central Bank plans to challenge use of assets to support Ukraine in EU Court Central Bank of Russia challenges EU over frozen assets in court, raising questions about institutional trust
APR 1, 2026OTHER

EU delivers first tranche of windfall profits from immobilised assets to Ukraine

The EU transferred about EUR 1.4 billion in revenue generated from the immobilised Bank of Russia assets to support Ukraine, part of the mechanism the Bank of Russia’s suits target.

EU to deliver €1.4 billion in revenue from immobilised Russian assets to be used for support to Ukraine
MAR 3, 2026FILING

Bank of Russia publicly announces General Court lawsuit

The Bank of Russia announced its General Court challenge to the indefinite freeze, arguing it breaches property rights and immunity and denies judicial protection.

Russia's Central Bank Sues EU in Luxembourg Over Frozen Assets Russia sues in EU court to unblock frozen assets
FEB 27, 2026FILING

Bank of Russia lodges first annulment claim at the General Court

The Bank of Russia submitted a claim to the General Court of the EU in Luxembourg challenging Regulation 2025/2600 under Article 263 TFEU.

Bank of Russia challenges European Union Council Regulation of 12 December 2025 before the court of the EU in Luxembourg
JAN 2026HEARING

Closed-door preliminary hearing in Moscow arbitration case against Euroclear

The Moscow Arbitration Court held a preliminary closed-door hearing in the Bank of Russia’s parallel claim against Euroclear, reported to involve roughly $232B in claimed assets and lost returns.

Russia Sues the EU to Free $230 Billion
DEC 12, 2025FILING

Bank of Russia sues Euroclear in Moscow Arbitration Court

On the same day as the EU regulation, the Bank of Russia filed suit against Euroclear at the Moscow City Arbitration Court alleging unlawful blocking of its assets and seeking damages.

Immobilised Russian assets and war reparations: assessing the emerging legal conflict
DEC 12, 2025OTHER

EU Council adopts Regulation 2025/2600 immobilising Bank of Russia assets

The Council adopted a regulation under Article 122 TFEU prohibiting transfer of Bank of Russia assets back to Russia, decoupling the freeze from the six-month sanctions renewal cycle.

Council decides to prohibit transfers of immobilised Central Bank of Russia assets back to Russia

EXPERIMENTAL AI FORECAST

HOW IT IS MADE →

Predicted outcome: Respondent win
Model-assigned probability: about 73%
Timeframe: late 2027 to mid-2028
Model confidence: medium

The most likely end is dismissal of both Bank of Russia annulment actions on the merits by the General Court, roughly 73 percent, with judgment probably between late 2027 and mid-2028 and a further appeal to the Court of Justice running into 2029. The driving factor is the EU courts’ near-uniform record of upholding Russia-related restrictive measures, including rejection of property-rights and proportionality arguments, combined with the General Court’s 9 September 2026 dismissal of Hungary’s challenge to the very funding mechanism built on these reserves, which signals judicial comfort with the Article 122 architecture. Sovereign immunity arguments have little traction in Article 263 proceedings, where the question is legality under EU law rather than customary immunity before a national court, and the existence of the action itself undercuts the effective-judicial-protection ground. There is no settlement channel here in any ordinary sense, since the Council cannot bargain over the regulation with a claimant it treats as an instrument of the sanctioned state, and the EUR 1.4 billion tranche already transferred in April 2026 shows the EU is moving ahead rather than hedging. The leading alternative, at perhaps 15 percent combined, is a materially mixed result in which the Court accepts that Article 122 was the wrong legal basis or that the indefinite decoupling from renewal votes lacks adequate procedural safeguards, annulling part of the scheme while allowing time for re-adoption on a different basis. A smaller residual path is withdrawal or mootness if a war settlement converts the roughly EUR 210 billion into a negotiated reparations arrangement, which would extinguish the Luxembourg cases without a ruling. The parallel Moscow proceeding against Euroclear will likely produce a large Russian judgment that is unenforceable in the EU and functions as leverage rather than recovery.

EU courts almost never annul Russia-related restrictive measures · Hungary’s parallel challenge already dismissed, validating the funding mechanism · No negotiated settlement channel between Council and Bank of Russia · Sovereign immunity weak ground in Article 263 annulment review · Legal-basis challenge to Article 122 is the only real risk

Generated automatically by claude-opus-5 on Sep 15, 2026 from this case’s record on this site, and published without editorial review. The probability is the model’s judgment, not a measured frequency; there is no established validation record for these forecasts. Not legal or investment advice. How the forecasts are made →