Right when the Russian-Ukrainian war broke out, many countries seized Russian assets and funds belonging to some pro-Putin oligarchs. There has been an ongoing debate in European and global states on how to transfer these funds to Ukraine, against the "peaceful" principle of respecting private and especially state property.
For example, Switzerland, which has been collecting money from around the world for centuries, turning a blind eye to its origin, is unwilling to abandon this principle. However, EU countries are more determined: at the very least, Russia's assets should be confiscated and transferred to Kyiv.
The question is who will receive these funds remained open amidst these discussions.
The state only?
But ordinary Ukrainians suffer from the Russian soldiers, bombs, and missiles! On May 17, this issue was responded to at the Council of Europe summit for the first time. It turns out that the Ukrainian Ministry of Justice and Western partners have been working for almost a year on a special mechanism for the future distribution of Russian funds among millions of Ukrainians whom the war has harmed. This agreement evolved into an international treaty at the meeting of leaders from all over Europe in Reykjavik, establishing the Register of Damage caused by the aggression of the Russian Federation against Ukraine.
A copy of the document is available for "European Pravda." It creates not only a "register of Russia's criminal actions" but also a list and amounts of compensations that Russia must pay to Ukraine as a state, ordinary Ukrainians, and Ukrainian enterprises that have suffered destruction.
It may seem at first glance like counting your chickens before they hatch, and discussions about their distribution may appear premature since there are no funds available in the accounts. However, that is not the case. The Register of losses and financial claims against Russia needs to be launched as soon as possible.
The document is a highly unusual international agreement. Even Ukrainian Prime Minister Denys Shmyhal and Minister of Justice Denys Maliuska flew to Reykjavik to sign it.
Currently, 43 states have either signed or pledged to sign it, and the European Union has supported it as the 44th signatory. It is expected that this list will grow significantly.
Such a broad range of signatories is necessary to affirm that the forced seizure and distribution of Russian funds are not just Ukraine's demand but the position of the global community. This will help with legal decisions on confiscation.
This agreement is proclaimed at the Council of Europe summit for a reason. Firstly, it adds political weight to it. The level of participation is unprecedented, especially for the Council of Europe, which is usually given little attention in the West. 38 of the 46 member states of the Council of Europe are represented in Reykjavik at the President or Prime Minister level.
The second reason the document was signed at the Council of Europe summit is that it has been formulated precisely. It is not a typical multilateral treaty with dozens of signatures; rather, it is a "Council of Europe agreement" created supposedly within the framework of the organisation. This approach was employed to bypass mandatory ratification in these countries and thereby expedite its implementation.
The world has agreed with Ukraine's arguments that the preparation for the post-war distribution of Russian billions cannot wait. Currently, there are 40 Council of Europe member states and additional signatories such as the United States, Canada, Japan, and the EU as an organisation. However, the Council of Europe has 46 members, meaning there are six more.
According to Ukrainska Pravda, the list of those
not currently on board includes Azerbaijan, Armenia, Bosnia and Herzegovina, Hungary, Serbia, and Türkiye.
The Ministry of Justice points out that even this outcome is a fantastic success. "Just two days ago, we realised that we would have more than 40 signatures. Our optimistic hopes were for 35 countries on May 15," said Iryna Mudra, Deputy Minister and negotiator on Russian compensations, in an interview with Ukraiinska Pravda.
Who will receive compensation?
The agreement signed in Reykjavik determines who will receive compensation for the damages caused by the war. The main idea is that Russia is not only bombing Ukraine as a state but also destroying state property. The thousands of casualties and injuries, millions of people whose homes and property have been destroyed or damaged by Russian missiles or artillery, the vast number of businesses destroyed, millions of tons of stolen grain, and more need to be compensated for.
The idea behind the Register is to have a list and amounts of these compensations ready at the moment of Ukraine's victory and the end of the war.
The groundbreaking nature of the agreement lies in all signatories agreeing that the amounts of Russian payments will be determined without Russia's participation. The opinion of the Russian government is no longer of interest to the civilised world.
The Register will be maintained, and the amounts of payments will be calculated by an international structure, not Ukraine. This is intended to instill confidence in the international community that these calculations will be perceived as fair. The future Russian government will either agree to them and pay voluntarily or face systematic confiscation of its assets.
Russia is expected to compensate the relatives of those who lost their lives, individuals who suffered injuries, and those who lost property.
The agreement includes three criteria. One of them limits the scope: this mechanism includes the assessment of the damage caused by Russia's actions across the entire territory of Ukraine, including Crimea and Donbas.
The second one limits the timeframe: damages and harm caused before February 24, 2022. The first eight years of Crimea occupation and the war in Donbas will not fall under this mechanism.
At the UN level, the international community failed to "break through" the recognition that Russia is waging an aggressive war against Ukraine until 2022. However, this does not deprive Ukraine and Ukrainians of the opportunity to hold Russia accountable for its actions since 2014 through other mechanisms such as arbitration or decisions by the European Court of Human Rights (ECtHR).
The third criterion pertains to the basis for financial claims against Russia. The agreement states that claims will be submitted to the Register "bearing in mind that such claims shall be made concerning damage, loss or injury that was caused by the Russian Federation's internationally wrongful acts in or against Ukraine."
These formulations could be clearer. That's why there is a question: Does each person have to prove that a Russian missile damaged their house or car? The Ministry of Justice assures that this won't be a problem. The methodology needs to be formally outlined in the agreement and will be determined by the specialised international body responsible for maintaining the Register. However, the founding states have already reached a consensus: it will be sufficient to establish that the war destroyed or harmed the property.
For example, despite the fact that the Antonivsky Bridge in Kherson was deliberately destroyed by Ukrainian artillery, Russia should be held responsible for its restoration because, without Russia, there would not have been a war and these destructions.
How will it work?
The Register will be entirely digital, without any paper submissions or the need to send documents to The Hague.
The government expects that this year, ideally in November, the electronic database with applicant identification will be operational. Individuals will be able to report their losses directly related to Russian aggression through this database.
Determining the amount of compensation will be the most challenging issue.
The signed agreement intentionally leaves unanswered questions on payment processes and funding sources.
These matters will be addressed in the subsequent stage within the "compensation mechanism."
Moreover, only after calculating the losses of Ukrainians and considering the seized Russian assets will the correlation between these figures become evident. Likely, the losses will significantly exceed the available funds. One of the best ideas to rectify this situation is to legally obligate Russia to contribute to the compensation fund for many years following its defeat in the war, such as by allocating a portion of its oil revenues.
Therefore, there are still numerous issues to be resolved. Tackling them will be challenging. Nevertheless, the decision made in Reykjavik is genuinely historic. We should be aware of it.
"The creation of the International Register of Damages is a real step for Ukraine towards justice and holding Russia accountable for aggression through reparations to Ukraine and its citizens," explained Iryna Mudra.
Written by Sergiy Sydorenko,
Editor, "European Pravda", from Reykjavik