Belgian Court Faults Treasury's Authority Over Frozen Russian Bank Assets

Belgium's highest administrative court has ruled that the country's treasury department did not hold the proper legal authority to turn down a request to release frozen assets belonging to Russian bank BCS, which are held at the Brussels-based clearing house Euroclear.

The Council of State stopped short of ordering the assets to be released, and it remains unclear whether the decision gives BCS Bank a path to recover the securities and funds.

The ruling, issued last Friday and first reported on Wednesday, applies specifically to BCS Bank. However, other decisions taken by the treasury department under the same mechanism could face similar challenges unless Belgium revises its legal framework.

A spokesperson for the Belgian Finance Ministry said the department was reviewing the ruling and its possible consequences. Neither Euroclear nor BCS Bank responded immediately to requests for comment.

BCS Bank held securities and funds at Euroclear through Russia's National Settlement Depository, which was placed under European Union sanctions in June 2022 following Russia's full-scale invasion of Ukraine. That move led to the freezing of the bank's assets at Euroclear.

In July 2024, BCS Bank asked Belgium to release its assets. The treasury department refused, and the bank appealed the decision to the Council of State in October 2024.

Friday's ruling held that under EU sanctions rules, Belgium must designate a "competent authority" to decide on requests to release frozen assets. Belgium assigned that power to the finance minister, who delegated it to the administrator-general of the ministry's treasury department. The court found that this delegation was too broad and insufficiently defined.

Most of the roughly €200 billion ($230.7 billion) in frozen Russian assets held in Europe is kept at Euroclear. The European Commission proposed last year using the assets to back a loan for Ukraine, but Belgium opposed the plan, arguing it did not offer sufficient guarantees that the country would not be left alone to handle potential lawsuits and damage claims from Russia. The proposal was subsequently dropped.

Several EU member states have recently called for the bloc to reopen the debate.