Between a Rock and a Hard Place – Russian-Israeli Citizens’ Assets Frozen

Euroclear, a major European clearing house, has frozen about USD 230 billion in Russian assets, including assets of Israelis with Russian citizenship.

Since the outbreak of the Russia-Ukraine war in February 2022, thousands of sanctions have been imposed on Russia, as a country and on all its citizens. As a result of the sanctions imposed by the European Union, Euroclear froze assets totalling about USD 300 billion. More than five million Russians holding foreign securities, including Israelis of Russian origin, had their assets frozen. 

As a result, Israelis also holding Russian citizenship have found themselves unexpectedly subject to sanctions. The securities they held through banks in Israel or abroad were frozen only because of the Russian citizenship they retained after emigrating to Israel, which is nearly impossible to relinquish. The freeze adversely impacted Israelis holding securities in both Israeli banks and foreign banks, including Swiss banks.

Reuters recently reported that Euroclear is considering confiscating about EUR 3 billion of these funds and distributing them to European investors, in retaliation for Russia’s boycotts of foreign investors. Euroclear does not act at its own discretion, but rather as an executive arm of the European Union, and complies with sanctions and Belgian laws, the country of its incorporation and registration.

Additionally, on July 19, 2025, the 18th European sanctions package was released, adding 22 Russian banks, four Belarusian banks, and two Chinese banks to the sanctions lists, as well as companies and individuals. As it stands now, there is no reason to expect the sanctions will be removed in the foreseeable future.

Recommendations to Owners of Frozen Assets

Currently, there is no widespread solution for the situation or an Israeli government plan for releasing Israelis’ assets held by Euroclear. The concern is that the assets may remain frozen for years or, in the worst-case scenario, be partially confiscated as bargaining chips during political arrangements.

Nevertheless, over the years, specific solutions have been formulated for the release of investors’ assets depending on the circumstances of each particular case. One of the possible solutions is to obtain residency status in a European country or apply to the courts in Belgium for an appropriate judicial ruling.

Some of the criteria examined include proof of severance from Russian residency or citizenship, holding securities through accounts not identified as being associated with Russia, presenting documents attesting to personal investment activities unrelated to the Russian government or economy, opening a lawsuit or regulatory proceeding against the bank supported by judicial authorities, etc.

Thus, we recommend that owners of frozen assets seek experts’ personalized assistance to analyze the circumstances of their case, including the manner of holding, available documents, and possible courses of action vis-à-vis financial institutions.

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Adv. Andrey Yanai is a partner in the Regulation Department.