Espreso. Global
OPINION

How to drive Russia from sanctions to reparations

16 August, 2023 Wednesday
21:24

Currently, the civilized world has imposed numerous sanctions on Russia and Belarus to stop the largest military conflict in Europe. Leading countries have also agreed that Russia must be held politically, legally, and economically accountable. But how to make the aggressor pay?

Each of the components of responsibility deserves a separate discussion, so I will now focus only on the economic responsibility of the aggressor. I will then talk about reparations, i.e. compensation for the damage caused by the aggressor country to the victim country. Taking into account international experience and current political and economic realities, experts today talk about several mechanisms for paying reparations. 

They include, firstly, the classic option, when a post-war peace agreement seals the unconditional obligation of the Russian Federation to compensate Ukraine for the damage caused. Additionally, the agreement must outline a well-defined international procedure to compel Russia into making reparations to Ukraine and punishment for possible refusal to pay reparations after the signing of a peace agreement. This proposed mechanism hinges on a situation where Ukraine achieves an unquestionable military victory. This is the only scenario that is possible in terms of historical justice. At the same time, reparations will be paid only after such an agreement is concluded. 

The second option is the seizure of assets by a decision of the UN Security Council. But today this option is impossible, because Russia has a veto in the Security Council. Therefore, the UN Charter must first be amended in terms of the rules and procedures of the Security Council, which is a very difficult and lengthy process.  It should be noted that both politicians and experts have been talking about the need to reform the UN for a relatively long time. Moreover, the issue of adequate representation of countries in the Security Council and its (the Council's) functionality is being discussed most actively today. Thus, this option looks theoretically possible, but practically unlikely in the short term.  

The third option is the decision of the International Court of Justice. But here, too, we have a number of problems in terms of enforcement of court decisions. As in the previous cases, the implementation of this option requires time and cooperation of all stakeholders. 

“Ukraine already needs funds to finance the ongoing reconstruction. Therefore, Ukraine and its partners are considering the practical possibilities of transferring frozen assets (primarily state-owned) for the needs of Ukrainian recovery. It is worth noting that this scheme (the fourth option for compensation) is now explicitly mentioned in the relevant policy documents.  The undoubted advantage of this option is that Ukraine's allies have direct actual control over the relevant funds.”

In my opinion, this option is purely political and makes it possible to start implementing the principle of the aggressor country's responsibility as soon as possible. In fact, this will be practical evidence of the inevitability of the aggressor's economic punishment. I believe that the beginning of the transfer of assets to Ukraine will strengthen the political position of Ukraine and our allies with respect to Russia and will influence the positions of other international players - countries and institutions.

The implementation of this option requires resolving a number of issues that are already on the agenda today. What are we talking about? First, the European Commission has spoken in favor of a kind of "inventory" of frozen assets, as this information is accumulated at the national level and is not always available in an aggregated form. Secondly, while it is relatively easy to freeze an asset, the confiscation of frozen funds and their subsequent transfer to Ukraine requires a legally clear and flawless procedure. To do this, it is necessary to amend the national legislation of many countries. Thirdly, the issues of confiscation and transfer of funds to Ukraine need to be regulated at the international level.

“Given the obvious difficulties of implementing this option, the EU came up with the idea of transferring not assets but income from their investment in various financial instruments to Ukraine. In the EU's view, such a scheme is more legally secure, as the assets remain "in place." The European Commission estimates that such a scheme could generate about EUR 3 billion annually.”

At the same time, there are other proposals for the use of frozen funds. For example, it is proposed to consolidate Russian money in a special so-called escrow account. This fund can be used by Ukraine as collateral for the issuance of government bonds. 

Well, the conclusion is simple. Russia must bear real responsibility for its aggression against Ukraine and compensate for the losses caused by the aggression. Not only Ukraine needs it, but also the international community as a form of vaccination against future aggressions.

Source

About the author. Ihor Burakovskyi, Chairman of the Board of the Institute for Economic Research and Policy Consulting.

The editorials staff do not always share the opinions expressed by the blog authors.


 
Tags:
Read also:
  • News
2024, Sunday
3 March
14:46
Exclusive
Why Russia is doubling down on Avdiivka direction: Analysis by military expert Popovych
14:15
Exclusive
Map of fighting in Bakhmut sector
Defending Chasiv Yar: Ukrainian Armed Forces take measures to thwart Russian capture
13:45
Russia claims it repelled drone attack, downing 38 drones over Crimea
13:17
Russia risks losing aircraft to advance in Avdiivka – ISW report
12:47
Ukraine braces for new Kremlin disinformation campaign against Zelenskyy - Bloomberg
12:18
Updated
Russian drone attack on Odesa kills 10, including three children
11:56
Interview
Chances that Biden administration will agree with Macron's statements are zero — Ambassador Bolton
11:26
Russia loses aircraft, 35 artillery systems, and 1,160 soldiers in one day – General Staff
10:56
Russian troops attack Myrnohrad with missiles at night, killing civilians
2024, Saturday
2 March
20:30
Aircraft carrier for drones to be built in Black Sea by Portugal’s request
20:11
Exclusive
Putin breaks golden rule of intelligence: expert on publication of Bundeswehr talks about Taurus strike on Crimea bridge
19:55
Exclusive
Crimea bridge is primary strategic target to be destroyed - British Colonel Grant
19:39
Ukraine shoots down another Russian Su-34 fighter jet
19:24
Ukrainian army targets 336 Russian soldiers and 258 UAVs in Tavria sector
19:06
Russia signals readiness to hand over bodies of POWs from IL-76: Ukrainian military intelligence responds
18:26
"Better give Ukraine weapons than send troops" - Polish Defense Minister
17:58
Exclusive
Kremlin played it safe with its main opponent - Feygin on Navalny's murder
17:30
Exclusive
Putin perceives West as very weak — British Colonel Grant
16:56
Bedbugs in Paris: Russian agents spread panic, link it to Ukrainian refugees
16:29
Exclusive
Russia sends battalion for assaults every day - Ukrainian military on fighting in Kreminna sector
16:00
Substation supplying three defense plants explodes in Yekaterinburg, Russia
15:47
Updated
Russian drones attack Kharkiv and Odesa, killing at least 5, including child
15:35
Russia announces test of Yars ballistic missile to scare West, force it to cut Ukraine aid - ISW
15:02
Exclusive
Operation on Tendra Spit, where Ukrainian spec ops soldiers died, had no strategic or tactical value - Major General Kryvonos
14:33
Review
Map of fighting in Bakhmut sector
NATO in Ukraine. Repulsing attacks in Zaporizhzhia region, situation in Avdiivka. Weekly military results 
13:55
Review
Ukraine’s demographic apocalypse: millions of refugees, war losses and how to address population challenges
13:23
"A lot depends on commander": Syrskyi explains why some AFU brigades fail to hold line
12:55
Argentina donates two Russian-built military helicopters to Ukraine
12:30
Updated
Russian army loses 14 tanks, 47 artillery systems, 960 troops per day - Ukraine's General Staff
12:00
Russian night attack: air defense forces destroy 14 of 17 Russian Shahed drones
11:35
"Ukraine needs to boost its air shield": Zelenskyy reacts to Russia's night attack
10:40
Explosion in St. Petersburg: Russian media claim UAV hit building
2024, Friday
1 March
21:55
Review
Victorious news on 737th day of war: destroyed Russian equipment near Synkivka, explosions in Crimea
21:40
OPINION
Putin is too old to build regime 2.0
21:20
Ukrainian soldiers target elite Russian assault group in Avdiivka sector
20:58
Russian army tries to break through Ukraine's defense 25 times in Novopavlivka sector
20:36
Exclusive
France destroys Putin's 'red lines' - analyst of National Institute for Strategic Studies
20:12
Ukraine's army shoots down 228 UAVs in February, including 116 Lancets
19:42
Netherlands announces new military aid package for Ukraine: what it includes
19:20
Exclusive
Navalny's murder might motivate resistance, radicalise protests in Russia — sociologist Eidman
More news