MOSCOW/ISTANBUL

Russia's central bank on Friday said EU plans to use its frozen assets are illegal, and threatened to challenge the proposal.

"Mechanisms of direct or indirect use of the assets of the Bank of Russia, as well as any other forms of unauthorized use of the assets of the Bank of Russia, are illegal and contrary to international law, including violating the principles of sovereign immunity of assets," the bank said in a statement.

The central bank said use of the assets to issue a reparation loan for Ukraine will be challenged in "national courts, judicial authorities of foreign states and international organizations, arbitral tribunals and other international judicial instances, followed by the enforcement of judicial decisions in the territories of UN member states."

In a separate statement, the central bank said it will file a lawsuit in a Russian court against Euroclear, the Brussels-based financial clearing house holding the frozen assets, for losses incurred due to the freezing of its assets.

"The actions of the Euroclear depository have caused damage to the Bank of Russia due to the inability to manage funds and securities belonging to the Bank of Russia," the readout said.

A lion’s share of about $325 billion worth of Russian assets frozen globally is held in Europe.

The EU proposes making some of it available to Kyiv to cover its financial needs for 2026 and 2027.

Belgium, however, has opposed the EU plans saying it could have legal consequences and also endangers the peace process.

The European Central Bank is also concerned that the proposal could undermine the confidence in the euro in global markets.

EU leaders will decide on whether to use the frozen Russian assets for Ukraine at a summit in Brussels on Dec. 18.