War Reparations For Ukraine: How To Ensure Them

  • 17.11.2022

Ivan Horodyskyy, Ph.D.

Director of the Dnistrianskyi Center

The process of paying reparations of the damages inflicted by the Russian aggression to Ukraine will become the most large-scale one after World War II. It will definitely exceed the reparations paid by Iraq after the Gulf War of 1991 several times.

In one of the latest reports, the Ukrainian government assessed only direct property damages as amounting to $350 bln., which is equal to 1.6 of Ukraine’s GDP, while before that the Prime-Minister of Ukraine had assessed these damages as amounting to $1 trln. Obviously, the profit lost, moral damages, environmental damages, etc. are subject to additional assessment.

Due to this, two important questions arise: first, “What mechanisms should be applied to ensure reparations?” and they are widely discussed, including the possibility of establishing of the international claims commission. Buy the second one, to which will be paid in the second part of this paper is “How to enforce the reparations orders and ensure the real payments of the damages”.

Though compensation of the consequences of the illegal acts have been acknowledged to be one of the general principles of international law in the PCIJ 1928 Chorzów Factory Case decision, there are no universal approaches to the war reparations. The formats that have been applicable over the recent decades – United Nations Compensation Commission, Eritrea-Ethiopia Claims Commission etc. have been applied ad hoc, and though they constitute important precedents, but they cannot be used in the same form in case of aggression against Ukraine.

That is why now there is a choice between the limited range of available means, or establishment of a new mechanism. Existing international forums, i.a. the International Court of Justice and the European Court of Human Rights are facing a number of challenges regarding the possible Ukrainian reparation cases, mainly the goodwill of Russia to recognize the admissibility of the of the claims, the duration of the review, and the enforcement of decisions.

For example, in the latest, most known decision on reparations in the case of Armed Activities on the Territory of the Congo Case (Democratic Republic of the Congo v. Uganda), the claim was filed in 1999, while the reparations decision was passed by the Court only in February 2022. Also, the ICJ`s approach of awarding reparations presupposes that this issue is transferred for the consideration of the parties, and only if they do not reach any agreement, the Court may award reparations. But even in this case, if the amount of reparations is determined and awarded by the Court, its approaches are incapable of fully embracing the whole amount of damages.

For example, in its court practice related to the loss or stealing of natural resources, the Court refuses to grant any compensation in case of “minor size”, demanding very clear facts to confirm the inflicted damages which are often difficult or impossible to get. And in case of lost profit, macroeconomic damages, or social damage, it is not too prone to award compensation in principle, since it is difficult to prove the causality relationship or because social and economic shock is not subject to reimbursement as such.

Besides the choice of forum, one of the major challenges of the ensuring of war reparations for Ukraine is the availability of the sources for payment of reparations. It is highly unlikely that Russia will agree to voluntarily enforce any decision on reparations. Therefore, it is worth looking for alternative sources to ensure compensation. These could be the assets of the Russian Central Bank and private persons, frozen as for now. However, now their seizure depends on the decisions of the states holding these assets, which mainly are the G7 and European Union countries and Switzerland. Their cautious approach, in particular, related to the issue of jurisdiction immunities, is clear, since the consequences of such confrontation may be more than noticeable in terms of political and economic stability in the world.

The amount of the compensation also depends on the question of sources. And recent practice shows that not 100% sums of the claims will be compensated. For example, in case of the Iraq`s reparations for its invasion and occupation of  Kuwait only around 15% of the total amount of the claims was awarded (52 bln. of 352 bln.), and in the ICJ`s Armed Activities on the Territory of the Congo Case decision of February 2022 in only 3% (325 mln. of 11 bln.) was awarded. And this numbers much depend on the availability of sources.

Finally, the problem of reparations is dependent on the political process. Obviously, the search of peaceful completion of the war will start sooner or later, and I am no talking about the recent Elon Musk`s tweet. And in this case the issue of reparations may rise not just in the form of “how to arrange it”, but also “whether we have to arrange it”. Unfortunately, realpolitik may appear to be much more pragmatic than good intentions and fair requirements. That is why final decisions on and the format of reparations will appear no sooner than it becomes clear how the conflict ends in the political dimension.

For the reparations of war damages for Ukraine to become reality, we need to, first of all, understand how to ensure payment of reparations. That could be both through the seizure of the frozen Russian assets, and through introduction of special customs duties for energy carriers, or through other formats. Without understanding of the sources of reparations, related discussions are nothing more than theory.

Secondly, the mechanisms of ensuring reparations and enforcing decisions on this matter should be reconsidered. International norms should be updated, for further responsibility and commitments to be not just of formal nature, but to ensure the understanding of how they should be implemented in the legal and political dimensions.

And, third, Russia`s duty to reimburse damages should be perceived as a global problem, and not just the problem of Ukraine. Russian Federation`s actions in energy, politics, and military fields in relation to Ukraine, the European Union, Georgia, Syria, and others during the last decades, cannot be left unpunished and not reimbursed. And RF’s duty to pay reparations for its violations of the Putin’s regime exists in relation to all the affected parties.

Certainly, Ukraine must get full reparations for all war damages. But the, recognition of its global nature may become the lever that will make the process quicker and simpler. That will give additional arguments to the G-7 and the EU countries in substantiating the steps related to seizing use of the frozen Russian assets.

Reparations payment to Ukraine and its further reconstruction constitute a critical objective for the whole democratic world: it should be shown that the sacrifice in the name of freedom and justice was not in vain. For the whole world this situation is not just one more unity test, but a chance to prove that democracy is not just an effective political regime, but that it can provide solutions to the most serious challenges.

Ukrainians are fighting to the rules-based society, but it cannot be left helpless in case of as gross violations of those rules as only can be imagined.