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Russia's settlement depository demands EU sanctions be recognised as unlawful

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This content was produced in Russia where the law restricts coverage of Russian military operations in Ukraine

MOSCOW, Sept 26 (Reuters) - Russia's National Settlement Depository has demanded that the European Union recognise sanctions imposed on it as illegal and pay for any legal costs incurred, a filing on the EU's Official Journal dated on Monday showed.

Owned by Moscow Exchange, the NSD, Russia's domestic paying agent, is equivalent to the Euroclear and Clearstream clearing houses, and plays an important role in the country's financial system as a key intermediary with international markets.

The EU imposed sanctions on the NSD, which Russia planned to use to service the country's Eurobonds, in early June as part of a panoply of measures against Moscow after it sent tens of thousands of troops into Ukraine.

The NSD filed a lawsuit at the European Court of Justice in Luxembourg on Aug. 12, but gave no further details.

According to Monday's filings, the NSD says the ECJ should annul sanctions imposed over Ukraine and order the Council of the European Union - which groups the bloc's 27 member governments - to pay costs.

Moscow Exchange, Russia's largest bourse, declined to comment on Monday.

The EU sanctions on the NSD, as well as other Western measures aimed at restricting Russia's access to global financial infrastructure, have blocked many Russian investors' access to securities held in jurisdictions outside Russia.

The NSD said that sanctions had been imposed based on "unsubstantiated" facts and that the Council had "failed to meet the required standard of proof", making the sanctions unlawful.

Russian Eurobond issuers have started issuing securities to replace those stuck abroad due to sanctions imposed on Moscow for what it calls a "special military operation" in Ukraine.

Energy giant Gazprom said on Monday it had exchanged $750 million worth of Eurobonds for new bonds.

President Vladimir Putin signed a law in July that gives companies until the end of 2022 to issue the bonds in a simplified procedure on the local market. (Reporting by Elena Fabrichnaya and Alexander Marrow, editing by Mark Heinrich)