11:36 20.04.2024


Persistance brings results: decision on the confiscation of the Russian Federation assets of will be made soon

5 min read
Persistance brings results: decision on the confiscation of the Russian Federation assets of will be made soon

Iryna Mudra, Deputy Head of the President’s Office


From the very beginning of the full-scale invasion of the Russian Federation, Ukraine's political leadership, lawyers, diplomats, economists, parliament members, and public figures have been insisting on the need to confiscate Russian foreign assets. These funds should be used to compensate damages and losses to Ukraine, its citizens, and businesses. The results achieved so far prove that persistency and  joint coordinated actions can be effective, despite the caution and conservative approach of some world leaders.

Gradual changes

If in 2022 international partners did not want to even hear about the confiscation of sovereign assets, now we are getting closer to the implementation of this idea: there is a PACE resolution with a call to use the frozen sovereign assets of Russia for the reconstruction purposes of Ukraine, as well as a draft law in the United States that provides for the possibility of confiscating the assets of the Russian Federation for the benefit of our country.

These changes in the attitude to this issue are truly tectonic. The fact is that the world society for the first time encountered a nuclear aggressor state that does not respect agreements and is not ready to pay reparations of its own free will. And therefore, a decision was needed that would not only help to achieve justice for the Ukrainian people, but would also set the grounds for preventing the repetition of such aggressive attacks in the future, and rebuild the stable international principles of law.

Together with members of the Working Group under the leadership of the head of the President's Office, my team at the Ministry of Justice, specialists from other state agencies and independent experts, we looked for all possible options and developed the concept of a Compensation Mechanism, which will allow us to effectively use the confiscated assets of the Russian Federation and sanctioned persons to compensate for war damages in Ukraine.

However, the implementation of this mechanism requires political will of the leaders of Western European countries, the G7 countries, which are known for their cautious approach to managing escalation. Of course, the first reaction to our proposals was "It's impossible." But our team did not stop: at all meetings and conferences, in Ukraine and abroad, we explained that the unprecedented decision will not destroy the world’s global order, but, on the contrary, will preserve it and prevent future disregard of the international law.

Thanks to the confiscation of Russian assets, not only will Ukraine receive the resources it needs to rebuild, but other countries that are currently watching the war will understand that the rules are relevant to those who follow them. And if you break the rules and laws, you get consequences. This is an essential argument for anyone who thinks that it is possible to occupy any independent country, kill civilians, and still keep money in the banks of civilized countries.

Regulatory framework in the USA

It is clear that such decisions cannot be chaotic, and therefore they need a regulatory framework. The difficulty lies in the fact that different countries not only have different legislation, but in some places fundamentally different views on the issue of confiscation. Because of this, support has come not only in  statements, but in real actions of legislators. First, the bill Rebuilding Economic Prosperity and Opportunity Ukrainians Act (REPO for Ukrainians Act) appeared in the USA, which was supported by the Senate. Unfortunately, due to internal conflicts between the parties, it was never brought up for consideration in the lower house of Congress.

However, now another project has been proposed on its basis - the 21st Century Peace through Strength Act ("Achieving peace in the 21st century through strength"). Content-wise, both proposals are similar and are based on exactly those ideas and proposals that my colleagues and partners developed during the last war years. If the initiative turns into a law, then the US President will be able to make decisions regarding the confiscation of sovereign assets of the Russian Federation and the transfer of these funds to the Compensation Fund of the International Compensation Mechanism. Moreover, the US President will be able to coordinate his actions with European partners, as well as with the G7 countries. This means that in the near future we can expect similar decisions also from the EU and other countries where the assets of the aggressor country are seized.

There are certain problematic points in the document: for example, it gives the President power, but does not oblige him to act. In addition, seized assets will not be able to be used, for example, for military aid to Ukraine. Nevertheless, now even such a draft law gives us a great hope for changes and a significant step forward.

Recommendations of the Council of Europe

The PACE resolution is also important. The document voted for by the Council of Europe reiterates the call to create an effective international mechanism to pay compensation to victims of Russian aggression against Ukraine. I would like to remind you that the Register of Damages is already working and accepting applications for compensation, but we expected a decision specifically regarding confiscations, because the Fund should be filled with those financial resources to provide further payments to Ukrainians. The Council of Europe also calls for the transfer of frozen assets of the Russian Federation for the formation of the Fund. In addition, the resolution calls on countries to update their legislation to provide legal mechanisms for such confiscation even without a conviction, in accordance with the procedures provided for in the recommendations of PACE Resolution 2218 (2018).

Both documents are an important signal for the whole world and, first of all, for Ukrainians: we are not left alone, we are being supported, and most importantly, we know that the truth is on our side and step by step we continue to move towards establishing justice.