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Tuesday, June 11, 2024 | Back issues
Courthouse News Service Courthouse News Service

Ukraine pushes forward with war compensation mechanism, despite lack of funding

The estimated price tag for the damage caused to Ukraine by Russia’s full-scale invasion is $1 trillion.

KYIV, Ukraine (CN) — Markiyan Kliuchkovskyi isn’t sure where the money will come from, but that isn’t slowing his progress toward setting up a register of war damages in Ukraine. 

“Every time when there are serious international conflicts, the issue of compensation is raised,” the executive director of the Council of Europe’s register of damages told journalists at a villa outside of Kyiv, during a series of talks on justice for Ukraine. 

Last May, the CoE — a post-World War II human rights organization — announced at its first summit in two decades it would establish a register of damages where Ukrainians can log the destruction they have experienced. 

The register opened its doors in January in The Hague and, in April, began accepting its first claims

Since then, Kliuchkovskyi told Courthouse News, his agency has received 3,500 submissions. When the register is fully up and running, he expects it to sort through some 6 million claims. “This is just the first stage,” Kliuchkovskyi said, speaking through an interpreter. 

It is unclear where the money will come from to reimburse those requests. 

Unsurprisingly, Ukraine wants Moscow to pony up. Mykola Yurlov, who works on the register at Ukraine’s Ministry of Justice, said it seems unlikely.

“We don’t see any possibility that Russia will voluntarily pay,” Yurlov told Courthouse News. Instead the country is looking to use frozen Russian assets to fill the register’s coffers. 

Funding for such mechanisms has historically been tricky. 

A commission created following the 1998 to 2000 Eritrean–Ethiopian War recognized $335 billion in damages on both sides of the conflict, but fell apart after failing to receive funding.

The United Nations Security Council set up a commission for damages in Kuwait after Iraq invaded in 1990. That fund did pay out $52 billion for some 1.5 billion requests, but Iraq was forced to hand over proceeds from a 5% tax on oil sales to reimburse the claims. 

The United States did use some frozen Iranian state assets to fund claims submitted to the Iran–United States Claims Tribunal. That body, created in the wake of the 1979 Iran hostage crisis, has paid out around $3.5 billion in damages to both sides, with much of the money coming from seized assets or paid as part of negotiation to release those assets. 

Estimates vary but between the G7 and European Union, countries have frozen some $300 billion in assets from the Central Bank of Russia. An estimated further $60 billion from private individuals has also been frozen as part of post-invasion sanctions. According to Yurlov, around $191 billion is in Belgium alone. 

Worries over retaliation and the stability of the euro, however, have kept governments from turning that money over to Ukraine. Germany and France in particular have expressed reservations about this idea. 

“There is no way yet to secure funding,” Chiara Giorgetti, a professor at Richmond Law School and the vice chair of the register, told Courthouse News in an interview. 

Last month, however, Ukraine won a small victory. Brussels announced it would hand over the profits from those frozen assets — the interest earned on money in a bank account, for example — to a special fund for Ukraine. The estimated 3 billion euros ($3.2 billion) per year will reimburse EU member states for weapons and ammunition they send to Ukraine, but might in the future help Ukrainians rebuild their homes and lives. 

Speaking to journalists during a briefing in December, Kremlin spokesman Dmitry Peskov said no country who seized Russian assets would be “left in peace” and threatened to confiscate assets in retaliation. 

Despite the uncertainty over funding, the register of damages is continuing to accept and study more claims. The agency’s April opening only allowed people to submit claims for property damage. Those claims are the most straightforward, according to Giorgetti, as people usually have documentation to prove ownership. 

Ultimately the register will expand to include claims about death, injuries and even the psychological toll the war has taken. The Ukrainian government and privately owned businesses will also be able to apply for compensation. The organization is aiming to open those categories by the end of the year. 

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