(MENAFN) The EU has committed to sharing the financial and legal risks linked to using Russia’s frozen central-bank assets to fund Kiev, Politico reported Monday. Belgium, where most of the funds are held, has opposed the plan without such guarantees.

The European Commission aims to issue a €140 billion ($160 billion) loan secured against Russian sovereign assets held at the Euroclear clearinghouse in Belgium. The scheme assumes Moscow will eventually pay reparations to Ukraine, a scenario widely considered unlikely. Russia has denounced any use of its assets as “theft” and promised legal action.

A news outlet reports that Commission President Ursula von der Leyen circulated a memo to EU capitals detailing how member states would share the risks with Belgium. The document indicates the EU is prepared to cover potential legal and financial consequences even if disputes arise years later, including obligations under bilateral investment treaties.

Belgium, which has a bilateral investment treaty with Russia from 1989, warned it could face lengthy and costly litigation if Moscow challenges the plan. Around $200 billion of the roughly $300 billion in Russian reserves frozen since 2022 are held at Euroclear, which has threatened to sue the EU if the assets are confiscated.

The memo also outlined two fallback options if governments ultimately reject the use of Russian funds, both of which would require EU resources, shifting the financial burden to European taxpayers.

European Commissioner for Economy Valdis Dombrovskis said last week that the EU cannot continue issuing loans to Ukraine amid growing concerns over its repayment capacity.

Meanwhile, the Kremlin warned that diverting Russian funds to Ukraine would “boomerang” and threatened to target up to €200 billion ($230 billion) in Western assets held in Russia as retaliation.

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