Russian occupation of Ukraine has committed numerous war crimes in Ukraine. Also, Russian missile strikes against Ukraine’s civilian energy infrastructure have confirmed Russia’s terrorist actions. Because every crime deserves its own punishment, Russia and its oligarchs have to pay compensation to Ukraine for its losses and cover costs associated with rebuilding the country.
The reparations debate gained a new boost with the announcement by Germany that it is willing to use frozen Russian assets for Ukraine. Although Chancellor Olaf Scholz supports Ukraine’s request for war reparations, his government has not yet made a formal position regarding Russia’s confiscation of assets. Berlin could resolve these issues and give impetus to the European Union’s debate. It may also put pressure on the U.S. government to seize Russian assets.
It concerns first and foremost the Russian Central Bank’s reserves, which were frozen prior to Russia’s genocide in Ukraine. In response to Ukraine’s aggression, many countries around the globe have frozen Russian assets. The Central Bank of Russia assets were the only ones that were blocked. They have been frozen for hundreds of billions of dollars and euros. Asset freezing was a temporary act of support before Russia’s war on Ukraine. However, the Russian terror in Ukraine made many reconsider their decision and move further.
There are currently no EU laws that allow foreign governments to dispose of frozen money. There are precedents around the world. After the Taliban took power, the U.S. stopped Afghanistan from receiving its funds. The administration of President Biden decided this year to use some of the frozen funds for the benefit of Afghan residents. They created a fund and opened a Swiss bank account. This fund will be able make payments for Afghanistan’s critical imports and pay international financial institutions for Afghanistan’s debts.
The Ukrainian government has offered its own compensation plan at the expense Russian assets. This specifically allows for asset confiscation. Ukraine’s authorities are certain that Russia will compensate Ukraine for its unprovoked genocide and destruction of Ukrainian infrastructure. These reparations could be derived from the foreign currency and gold reserves of Russia’s Central Bank, but also other assets. Different assets have different security mechanisms and blocks. An international treaty should be signed to formalize the decision regarding reparations. This would reduce legal complexity and protect states against future lawsuits from Russia.
It is difficult to estimate the damage done to Ukraine by Russia Federation because the Ukrainian authorities don’t have access to territories that were most affected by Russian aggression or are still under occupation. Mariupol, Donbas’ occupied territories and others are just a few examples. It is therefore difficult to provide a precise figure of the damage. However, we are talking about at least hundreds of billions of US dollars. The damage caused to Ukraine is estimated at EUR600 billion according to the head of European Commission. Volodymyr Zelenskyy of Ukraine claims that rebuilding Ukraine will require more than a trillion dollars. The Russian terror persists and the ultimate damage will be even greater. Russia must be held responsible for the destruction it has caused and for the reconstruction following the war. The United States and the European Union should work together to find a legal mechanism to allow assets to be taken as soon as possible, or used as collateral to help finance reconstruction of Ukraine in the right amount and timeframe.
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