Ukraine’s foreign minister: Russia must pay for the damage it’s done

Dmytro Kuleba is Ukraine’s foreign minister.

Russia must pay for the enormous damage it’s done to Ukraine with its unprovoked and entirely unjustified aggression. And as we mark the second anniversary of Russia’s full-scale invasion, there’s money available to help compensate for some of the physical destruction it’s caused and aid Ukraine’s defense.

As it stands, there are over $300 billion in Russian central bank assets frozen in various Western jurisdictions. There’s also other “immobilized” Russian money out there from sanctioned Russian oligarchs. And Ukrainian President Volodymyr Zelenskyy rightly persists in insisting on the confiscation of these assets to aid Ukraine’s recovery and defense.

Such a step would be just.

And yet, some in the West have thrown up obstacles to this, engaging in radical formalism to argue that confiscation would violate rule of law. But this smacks of hypocrisy.

Certain Western bankers and institutions have assisted Russian oligarchs in laundering and depositing their dirty money for decades, and I don’t recall any of them quibbling about rule of law when it came to that ill-gotten cash.

Moreover, law enforcement and justice officials should be examining the bank accounts held outside of Russia by President Vladimir Putin’s proxies more closely — including those of cellist and businessman Sergei Roldugin.

Needless to say, Russia isn’t just waging war on Ukraine, it’s attempting to undermine the West’s rules-based order — including rule of law. And raising thin legal objections in a bid to stop the confiscation of the assets of an enemy that wants to smash this order runs counter to the instinct of survival.

Confiscation would not only be fair, it would be legitimate — this has already been established by numerous legal scholars and jurists. According to international law, an aggressor state has an obligation to make reparations for acts of armed aggression. The U.N. Articles on the Responsibility of States for Internationally Wrongful Acts allow for such countermeasures.

Still, some skeptics wrongly argue that confiscation would risk destabilizing the Western financial system and international finance, undermining reserve currencies by throwing the safety of foreign investments in doubt. Interestingly, this argument is also being promulgated by the Kremlin at every opportunity. Only recently, Russia’s Central Bank governor argued the confiscation of Russian assets by Western governments would send a negative signal.

However, reputable experts have already dismissed these fears. And we’re actively working with our partners, as a collective decision by the G7 and EU countries would also further minimize any such risks.

But there’s another point to emphasize as well: By confiscating Russian assets, other countries might think twice before they mount any similar acts of aggression.

The EU’s already setting a trend by finalizing necessary legislation on the confiscation of the assets of Russian oligarchs | Olivier Hoslet/EFE via EPA

We welcome the actions that have so far been taken to start making Russia pay. For example, in 2022, Canada became the first country to enact legislation allowing for the transfer of assets. Last year, Belgium took the initiative to begin using tax revenues from Russian assets to assist Ukraine. And the EU’s recent adoption of a law to set aside windfall profits made on frozen Russian central bank assets is the bloc’s first real step toward using Russian assets to finance Ukraine’s reconstruction.

These are all welcome developments, and we applaud these governments for making them. But they’re just the beginning — and more needs to be done.

We realize that the comprehensive use of taxes, profits and assets can only be enabled by a series of national and collective steps rather than a single collective leap — countries all have their own legal nuances. But bearing all this in mind, it’s still viable to already start confiscating the “immobilized” assets in full this year.

Furthermore, confiscating the assets of Russian oligarchs is another important dimension to all of this, and the EU’s already setting a trend by finalizing necessary legislation on this.

Of course, some of our allies are concerned that the decision to seize the Russian central bank’s assets could set a precedent for other countries to seek reparations for past wars. But these fears are unfounded. The legal mechanism for confiscating Russian assets can be tailored to the specific case of its aggression against Ukraine, and thus developing existing international law would have no retroactive effect.

Rather, it would serve as a strong deterrent, forcing other potential aggressors to consider the financial consequences of attacking other nations.

The overall price tag for Ukraine’s recovery has now reached $486 billion, according to the most recent report from the World Bank. It estimates direct damages from the war at almost $152 billion. And Russian money can cover a large portion of these enormous recovery and defense costs.

Current Russian assets in the U.K. ($23 billion), Luxembourg ($6.8 billion) and Switzerland ($8.7 billion) would be enough to meet Ukraine’s needs for rebuilding its transport infrastructure. This includes 16 damaged or destroyed civilian airports, at least 344 bridges and over 25,000 kilometers of highway.

Meanwhile, frozen assets in Germany ($6.5 billion), Austria ($1.8 billion), Ireland ($2 billion) and Poland ($1.13 billion) would be sufficient to help restore over 3,500 damaged or destroyed educational facilities — including 1,700 schools, more than 1,000 kindergartens and 586 universities.

And that’s not all. Russian assets in France ($1.48 billion) would be enough to build a new hydroelectric power plant to replace Ukraine’s Kakhovka plant, which Russia destroyed last summer. And the profits from Russian assets held in Belgium’s Euroclear depository for 2022 and the first half of 2023 alone total $2.56 billion. That money could rebuild 1,223 health care facilities, including 384 hospitals and 352 outpatient centers damaged or destroyed by Russia.

All of this can happen as soon as the political will is there — and the time for that it is now. It will be worth it.