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  5. International compensation mechanism for transferring frozen russian assets to Ukraine: possibilities of creation, legal problems and ways to overcome them

“Pravova derzhava”. Issue 35 (2024), pages 426–441.

DOI: 10.33663/0869-2491-2024-35-426-441

Malysheva Nataliia
International compensation mechanism for transferring frozen russian assets to Ukraine: possibilities of creation, legal problems and ways to overcome them

Currently, there is a consensus in the European Union and the G7 countries that russia must pay to compensate the damage and losses it caused to Ukraine through its unprovoked aggressive war. The most promising way to do so is to confi scate the assets of sanctioned russian individuals and legal entities, as well as the frozen reserves of the russian central bank. But such confi scation is not automatic. Certain obstacles, mostly of a legal nature, have to be overcome on this path. The article analyzes the possibilities of creating and implementing a compensation mechanism for the confi scation of relevant assets and their further transfer to Ukraine from the standpoint of current international law and national legal systems of appropriate States. The author examines the legislative steps in this direction taken by particular States that have relevant seized assets, as well as the measures taken by the European Union and other European and international institutions to confi scate relevant assets. Based on the analysis of doctrinal and regulatory sources, and recognizing the extraordinary nature of the situation under consideration, the author makes proposals for taking «proportionate countermeasures» against russia provided for by international law, including confi scation of russian assets. It is pointed out that additional arguments for the application of appropriate measures may serve as the fact that the unjustifi ed aggression was committed by a State — a permanent member of the UN Security Council; this State, using the right of veto, blocks all decisions related to it; the State — a «security guarantor» of Ukraine after the transfer of Ukraine’s nuclear potential to russia; the State, recognized by a number of international organizations and national governments as a sponsor of terrorism, etc. It is important that the legal mechanism being created should be unifi ed for all stakeholders to prevent the fl ow of russian reserves between diff erent fi nancial institutions. For this purpose, it is proposed to make an Agreement between Ukraine, the EU and the G7 countries, which, with reference to international law, should provide all the conditions for the implementation of a unifi ed coordinated confi scation mechanism for all interested parties.

Key words: russia’s aggression against Ukraine; frozen assets of the russian federation; sanctioned russian oligarchs; reserves of the central bank of the russian federation; confi scation; international compensation mechanism; transfer of confi scated russian assets to Ukraine.

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