Euroclear is a Belgian financial services company specializing in the settlement, custody and servicing of securities transactions.

What is Euroclear?

Euroclear serves a variety of financial institutions, including banks, insurance companies, pension funds and other asset managers. It provides a wide range of services, such as transaction settlement, securities lending, corporate event management and other services.

Euroclear's objectives:

Euroclear performs a number of key functions in the financial industry, ensuring the functioning of international securities markets, such as:

• Settlement of transactions and execution of securities transactions, such as stocks, bonds and derivatives. The company acts as a central counterparty, reducing the risk of default by one of the parties.
• Providing custody and management services for securities, including processing of actions such as dividend payments, stock splits.
• Providing collateral management services, optimizing the use of assets as collateral in various transactions, including derivative financial instruments and repo transactions.
• Securities lending solutions that enable market participants to borrow and lend securities to provide liquidity or manage risk.
• Assisting clients in optimizing tax liabilities related to holding and trading securities, ensuring the correct application of tax rates and the refund of overpaid taxes.
• By linking different national markets, Euroclear facilitates cross-border transactions, allowing investors to easily access foreign markets and expand their investment portfolios.

How does Euroclear affect us?

Euroclear, one of the world's largest clearing and settlement systems, has taken measures to limit or completely block transactions with Russian assets in accordance with the sanctions imposed on Russia. These measures include:

• Suspension of all operations with securities:Euroclear has suspended operations with securities issued by Russian issuers, limiting access to international capital markets.
• Freezing of assets:Assets of Russian companies and individuals were frozen in the Euroclear system, which means a ban on any transactions with these assets.
• Restrictions have been imposed on dividends and other payments:Restrictions have been introduced on the transfer of dividends, interest and other forms of investment income in the Euroclear system.

Blocking process:

On June 3, 2022, the National Settlement Depository of Russia (NSD) was added to the list of individuals, legal entities, organizations and bodies subject to the restrictive measures set out in Council Regulation (EU) 2022/878 of 3 June 2022. "On the implementation of Regulation (EU) No 269/2014 concerning restrictive measures concerning the Russian Federation". Thus, all assets of foreign securities belonging to Russian investors and stored or recorded in Euroclear depositories were blocked.

What will be needed to unblock the translation?

On 6 October 2022, in the context of the eighth sanctions package, the Council of the European Union amended Article 6 of Regulation (EU) No 269/2014, integrating the fifth paragraph. This innovation opens the possibility of unblocking assets placed or deposited in the NSD. Therefore, in order to obtain a special license from the Belgian Ministry of Finance, giving the right to release frozen funds, a number of criteria must be met:

Unlocking is only possible for purposessalespositions (cash or securities) located in frozen NSD accounts in a Belgian financial institution.

A written commitment from a European broker (guarantor) must be provided.

The guarantor must undertake to provide a posteriori reporting (upon completion) on the completed transaction for the sale of assets, which will include the following information:

1. Positions subject to sale;
2. Full verification of applicants and their beneficial owners;
3. Payment orders and due diligence of individuals and legal entities receiving income from the sale of relevant items;
4. A statement (approved by the guarantor) on the positions actually sold and the beneficiaries of the proceeds from the sale;
5. Evidence that the proceeds of the sale were deposited in an unauthorized entity;

Thus, to summarize the above, it is necessary:

• Residence permit or citizenship of a state that is part of the European Union (this is not a requirement, but it significantly increases your chances).
• Account in a European bank.
• Agreement with an investment broker who has access to the Euroclear storage facility.
• A letter of guarantee from a broker agreeing to accept blocked assets for subsequent sale.
• Proof of ownership of blocked positions
• Sign up for a consultationand get qualified assistance for a professional solution.
• A fair amount of patience, because the process is not quick.