An attempt by JPMorgan Chase & Co. to convince Belgian authorities to release about $2.4 billion blocked by Russian sanctions collapsed in court last year, according to the verdict obtained by reporters.
The funds owed to JPMorgan, the largest bank in the U.S., remain blocked in Belgium. That's because they are transactions with the Central Bank of the Russian Federation, which the European Union sanctioned in 2022.
The court case, which has not previously been made public, highlights a glaring problem with the sanctions regime imposed by Western countries on Russia following its full-scale invasion of Ukraine.
Much of the 258 billion euros’ worth of blocked transactions and frozen assets (about $270 billion) does not actually belong to Kremlin cronies, or Russian state or corporate entities. Instead, a lot of it belongs to investors who are not sanctioned. Yet the funds remain in limbo.
Because it hosts the E.U.’s largest financial services provider, Euroclear — the company that has blocked transactions and frozen assets — Belgium is at the epicenter of efforts to sort out what funds should remain under sanctions, and which should be released.
To date, Belgium has not seized a single superyacht or monster mansion in connection with sanctions on the Russian regime and its backers. Meanwhile, many entities and individuals have appealed to Belgian authorities to unfreeze their funds or assets.
A flood of requests to release cash and assets, as well as legal challenges, have overwhelmed the country’s Treasury Department and stressed the courts system, Belgium’s De Tijd newspaper has found.
“I estimate that 80 percent or even more of the blocked billions belong to — legally speaking — innocent people who should not actually be affected by the sanctions,” said Roeland Moeyersons, a Belgian lawyer who has represented clients challenging the Treasury Department in court.
Ambiguity about sanctioned Russian funds also complicates plans to funnel them into rebuilding Ukraine, according to reporting by OCCRP, De Tijd, and Netherlands-based Follow The Money.
In response to JPMorgan’s legal challenge, Belgium’s supreme administrative court concluded it no longer had the “need to decide” on the matter, the April 2024 judgement states.
The court essentially had nothing to rule on, because Belgium’s Finance Ministry withdrew its decision to refuse JPMorgan’s request to release its 2.3 billion euros.
The ministry has made the same decision in other legal cases. But withdrawing a decision to refuse to unblock transactions does not mean the funds are released. It’s just that the refusal order is unnecessary due to E.U. sanctions law, which states that blocked transactions can only be released under certain circumstances.
“In very exceptional cases, a release can still take place if such a blocked transaction would jeopardise financial stability in the E.U.,” said Sébastien Guillaume, the Treasury Department’s director of the compliance service. “But that was clearly not the case for a U.S. bank like JPMorgan.”
A search of Belgian court records shows JPMorgan has not pursued the matter further, and the bank declined to comment on the case.
JPMorgan is not the only bank with funds blocked due to Russian sanctions, according to the Belgian Treasury Department.
“European banks also have transactions with the Central Bank of Russia that are still blocked, and those are even higher amounts than JP Morgan,” Guillaume said. “But those European banks don't tell their clients that they have X billion euros in blocked transactions with the Russian central bank.”
Guillaume did not provide the names of the European banks, but he noted that they did not bring challenges in court.
Reconstruction Plans
Ukrainian officials have said repeatedly over the past couple years that funds and assets confiscated under Russian sanctions should be used to rebuild their devastated country. European leaders have endorsed the idea.
In the run-up to a European security meeting in Munich from February 14 to 16, Ukrainian President Volodymyr Zelensky repeated the appeal, reportedly suggesting confiscated cash could be used to build homes for people who lost theirs in the war.
Zelensky had planned to bring the idea forward at the Munich security meeting — until U.S. Vice President JD Vance derailed the agenda by accusing European countries of suppressing free speech, and muzzling far-right parties. Vance then met with the leader of the AfD, which has become a powerful party in Germany despite its Nazi origins.
In the aftermath of Vance’s speech, European leaders convened an emergency meeting to discuss relations with the administration of U.S. President Donald Trump. The expected public discussion of reconstruction in Ukraine — in part by funds confiscated under sanctions — did not happen.
But the situation in Belgium shows how hard that plan could be to put into action.
Of the total 258 billion euros in funds and assets frozen under sanctions, 193 billion euros ($202 billion) consist of transactions that have been blocked by Euroclear because they were connected to Russia’s central bank, according to data provided by Belgium’s Treasury Department.
Euroclear declined to comment.
The remaining 65 billion euros ($68 billion) are not transactions, but assets the Treasury says have mainly been frozen at Euroclear.
Of those assets, 55 billion are securities — a term that covers a variety of investment tools, including stocks and bonds. The securities were frozen because they passed through Russia’s sanctioned National Settlement Depository, the Moscow-based body that handles such investments.
Separately, about 10 billion of the 65 billion euros are frozen because they are held by sanctioned Russian banks.
“The banks whose assets are frozen are themselves sanctioned, but their clients are not,” said Alexandre De Geest, Treasury’s administrator-general.
“So, when people talk about the complete confiscation of all frozen assets, do they realize that it often does not concern the property of the sanctioned bank or financial institution, but of their clients?”
“Such a seizure would be unprecedented in the history of sanctions,” De Geest said.
Legal Challenges
Back in February 2022, when Russia launched its full-scale invasion of Ukraine, Belgium’s Treasury had only two civil servants focused on sanctions. Then came a wave of sanctions applied to Russia, and challenges to those actions.
De Geest said there are now 15 Treasury officials assigned to Russian sanctions — but it’s still not enough to handle all the requests that come in.
“We have a maximum capacity to process 100 files per month, but that is the same as the number of new applications coming in, so the backlog of 800 files remains,” he said.
In the meantime, more than 200 procedures have been launched at Belgium’s supreme administrative court, known as the Council of State, petitioning the Treasury to release frozen assets or blocked transactions.
Of 72 judgements examined by reporters, the court decided 70 times that it had nothing to rule upon. Often, the reason was — as with the JPMorgan case — that Treasury had already withdrawn its refusal order before the case was heard.
Rather than people challenging sanctions imposed on them, most cases were initiated by people who own securities that passed through the National Settlement Depository.
One plaintiff, for example, was a Russian woman living in France who was unable to get the Treasury to release her securities, which were frozen by Euroclear. She argued that the securities were her financial safety net, and she feared they could be seized.
The court documents show that Treasury refused to release her investments, arguing that the woman had not provided sufficient details about her financial situation.
Moeyersons, the lawyer who has represented clients challenging sanctions freezes, said the Treasury Department is ignoring a judgement handed down by the Court of Justice of the European Union.
In a September 2024 judgement, the court dismissed in its entirety a suit brought by the National Settlement Depository, which had argued that it should not be sanctioned.
However, the judgement stated that national authorities have a responsibility to ensure that “interference with the right to property of the customers concerned is in compliance with” E.U. law. It said clients “have legal remedies available to them before the national courts in order to claim infringement of their right to property.”
Moeyersons interprets the judgment as saying the non-sanctioned people “are simply entitled to the release of their frozen resources.”
“We are now reaching a point where the Belgian state is exposing itself to claims for damages because of its deliberately unlawful conduct, and then we are talking about potentially gigantic amounts,” Moeyersons said.
Belgium’s Treasury Department dismissed the accusation, arguing that it is acting in accordance with the verdict from the E.U. Court of Justice. In a statement to reporters, Treasury said its decisions “have not been contested either by the EU General Court or on appeal by the Brussels Court of Appeal.”
Guillaume, Treasury’s compliance director, said the institution last year received 1,214 requests to transfer or release frozen assets. The institution processed 446 requests, and released assets in 186 cases. These were “always for smaller assets of private individuals,” he said.
But blocked transactions are another matter, he added, because they can only be released if the financial stability of the E.U. is at stake. Changing that rule would require a consensus among member states.
“Those transactions will remain blocked for as long as possible, especially after the E.U. member states decided last year to use the profits on that blocked money from the Russian central bank for the reconstruction of Ukraine,” Guillaume said.
“As soon as the door is opened to release certain transactions, there is a great fear that requests for release will flood in en masse,” he said.
