**Court Rules Belgium Had No Right to Withhold Russian Bank’s Assets**
Belgium's highest administrative court, the Council of State, has ruled against the Belgian government's decision to withhold the frozen assets of Russia's BCS Bank. The court determined that the government failed to establish a clear and lawful procedure for handling requests related to the release of these assets, delegating authority to an agency that lacked the legal power to process such requests.
The assets in question were frozen as part of the European Union's sanctions imposed on Russia following the escalation of the conflict in Ukraine in February 2022. In response to the invasion, Western nations, including EU member states, froze approximately $300 billion in Russian sovereign assets, with a significant portion held at Euroclear, a Brussels-based depository. BCS Bank's funds were frozen because they were deposited with Euroclear through Russia's National Settlement Depository (NSD), which was specifically targeted by the sanctions.
In January 2023, BCS Bank submitted a request to the Belgian Treasury for the release of its frozen funds. However, the Treasury rejected the request in July 2024, stating that the bank had not sufficiently demonstrated the termination of its relationship with the NSD. The Treasury also expressed concerns that transferring the funds to an Armenian bank would hinder Belgian authorities' ability to monitor their use.
Following the rejection, BCS Bank filed a complaint with the Council of State, which led to the recent ruling. The court found that the Belgian Ministry of Finance had improperly delegated its authority to the Office of the Administrator General of the Treasury. The ruling criticized the ministry for granting the agency “excessively broad and unclear” powers, which created a legal vacuum and violated fundamental rights as outlined in the Belgian constitution.
While the court's ruling does not automatically result in the release of BCS Bank's assets, it opens the door for the bank to seek a review of its case. The decision also sets a precedent for other entities whose requests for asset release have been denied under similar circumstances.
Additionally, the Council of State dismissed the Belgian government's argument that BCS Bank had forfeited its right to appeal due to being added to the US sanctions list in 2024 and the EU sanctions list in May 2026. The court emphasized that the Belgian government cannot assume that US sanctions will remain in effect indefinitely.
The precise number of Russian companies impacted by the EU asset freeze remains unclear, as the Belgian clearing house does not disclose its client lists due to EU data privacy regulations. Likewise, Russian authorities have not publicly released information on the matter.
This ruling comes on the heels of a decision by the Court of Justice of the European Union (CJEU) in early September, which stated that the political nature of Russia's regime cannot serve as the sole justification for freezing assets belonging to companies linked to Russian entities. The CJEU emphasized that authorities must first establish an "objective and sufficiently solid basis" to prove that a company is controlled by a sanctioned individual.
The case that prompted this ruling involved Lithuania's 2022 decision to freeze the funds of Inter Rao Lietuva, an electricity supplier not on the EU sanctions list but controlled by a Russian state-owned power company.
As the legal landscape surrounding asset freezes continues to evolve, the implications of the Council of State's ruling may resonate beyond BCS Bank, potentially affecting other Russian entities seeking the release of their assets in Belgium and across the EU.