* This content was produced in Russia where the law restricts coverage of Russian military operations in Ukraine
MOSCOW, Aug 11 (Reuters) - Russian law firm Rybalkin, Gortsunyan, Dyakin & Partners (RGD) plans to appeal to Euroclear clearing house to help unfreeze funds of investors in foreign securities that were tied up by Western sanctions against Russia, a RGD partner said.
Following Russia's move to dispatch thousands of troops to Ukraine on Feb. 24, the European Union barred Euroclear from serving Russian customers as the West severed ties with the country's financial system.
In May, Russia restricted trading in foreign shares that have been blocked by Belgium-based Euroclear, citing the need to protect investors and effectively freezing a part of foreign securities held by investors in Russia.
Ilya Rybalkin, a founding partner of RGD, said the law firm developed an institutional solution for the return of funds and securities of foreign issuers blocked by Euroclear to Russian and other investors.
"We would like to see an agreement on the implementation of a common asset unlocking scheme this year," Rybalkin said in an interview cleared for publication on Thursday.
RGD intends to apply to Euroclear and the relevant European authorities in September for a general licence that allows transactions in blocked securities, having collected clients' claims for around $500 million, Rybalkin said.
"We want to create a universal platform, to find an institutional solution that is accessible to a wide range of investors ... After three months of intensive work, we believe that our position is now developed."
Frozen funds' assessments vary. Euroclear said last month https://www.euroclear.com/newsandinsights/en/press/2022/2022-mr-13-euroclear-delivers-a-strong-performance-for-h1-2022.html its bank's balance sheet increased by 72 billion euro ($74.2 billion) year-on-year in the first half of 2022 thanks to blocked coupon payments and redemptions accumulated because of sanctions.
RGD has a dozen major investors among its clients, including Russian business owners and top managers along with Western investment companies, Rybalkin said. The firm is constantly in talks on new clients, while also preparing presentations for leading Russian banks that service wealthy customers.
"There is a particular trend when citizenship or nationality in today's world become an argument for not fulfilling certain obligations. Our clients, individuals and companies are not sanctioned," Rybalkin said, stopping short of revealing their names.
The asset freeze affects not only wealthy investors but more than five million people who bought foreign shares in a retail investment boom during the height of the COVID-19 pandemic, according to central bank data.
Moscow Exchange, Russia's largest bourse, has said it planned to legally challenge EU sanctions on the NSD, Russia's equivalent to Euroclear, and would seek to protect the interests of Russian investors.
Euroclear did not immediately reply to a Reuters request for comment.
Sanctions against NSD led to what the United States claims is Russia's default on its international bonds for the first time in more than a century. But the Kremlin blamed the situation on the West without admitting the default.
Rybalkin said it was wise to avoid a protracted legal process with Europe, adding that the basis for a constructive discussion with Euroclear was in place.
"If we realise that Euroclear or the regulator are not prepared to move in a constructive direction, then perhaps legal proceedings will be initiated."
($1 = 0.9708 euros) (Reporting by Reuters; editing by Grant McCool)