Belgian court rules treasury lacked authority to block Russian bank's frozen assets

Belgium's top administrative court, the Council of State, ruled last Friday that the country's treasury department did not possess the necessary legal authority to deny the release of frozen assets belonging to Russian bank BCS. These assets are held at the Brussels-based clearing house Euroclear.

The court's decision, which was first reported on Wednesday by Belgian newspaper De Tijd, does not mandate the release of the assets, leaving uncertainty about whether BCS Bank can recover its securities and funds. However, the ruling's implications extend beyond BCS Bank, as other treasury department decisions made under the same legal mechanism could face challenges unless Belgium updates its legal framework.

BCS Bank's assets were frozen after Russia's National Settlement Depository was sanctioned by the EU in June 2022 following Russia's invasion of Ukraine. The bank requested the release of its assets in July 2024, a request that was refused by the treasury department. BCS Bank subsequently appealed this refusal to the Council of State in October 2024.

The court stated that under EU sanctions rules, Belgium must designate a specific "competent authority" to handle requests for the release of frozen assets. Belgium had granted this power to the finance minister, who then delegated it to the administrator-general of the treasury department. The court found this delegation to be overly broad and insufficiently defined.

Euroclear holds approximately €200 billion ($230.7 billion) of frozen Russian assets, representing the majority of such assets held in Europe. Previously, Belgium opposed a European Commission proposal to use these frozen assets to support a loan for Ukraine, citing concerns about potential lawsuits and damage claims from Russia. This opposition led to the abandonment of that plan, though several EU member states have recently called for the debate to be reopened.