Ukraine urges West to seize Russian assets to pay for rebuilding

Ukraine called on western allies to confiscate frozen Russians assets and redirect the money to fund the rebuilding of the country as Kyiv prepares to take its case for compensation from Moscow to the United Nations.

It will ask the UN general assembly meeting in September to establish a binding international mechanism to force Russia to pay for the destruction caused by its invasion, Iryna Mudra, a deputy justice minister in Ukraine, told The Times.

Kyiv made its proposal as western leaders gathered in Switzerland to discuss a “Marshall Plan” for Ukraine, similar to the American scheme that funded European reconstruction after the Second World War. Denys Shmyhal, Ukraine’s prime minister, told the Ukraine Recovery Conference in Lugano that Russia’s invasion had caused damage that it would take $750 billion to repair, including more than $100 billion for direct damage to infrastructure and private property.

Only Canada has so far introduced domestic legislation to liquidate Russian assets for Kyiv’s benefit, including luxury yachts and residential property belonging to sanctioned oligarchs.

Liz Truss, the UK foreign secretary, said that she was open to a similar initiative as she announced millions more in British funding for the rebuilding of shattered communities around Kyiv.

Mudra, however, said Ukraine was determined that Russia would ultimately foot the bill. “We are very thankful to our partner states but these should not be the countries that pay,” she told The Times. “Russia has assets and they can be used in order to pay for the reconstruction.”

Historical models of reparations, such as those paid by Germany after the Second World War, would not work in Moscow’s case “because Russia is not willing to discuss it and even if they lose the war they will never recognise they are defeated,” she said. “We also do not know how long this war will last. We don’t have time to waste. We need the money now.”

Legal experts say a gap in international jurisdiction means that neither the International Court of Justice, the International Criminal Court nor the European Court of Human Rights, has the powers to order reparation.

Ukraine will introduce a resolution at September’s UN general assembly session to create a new mechanism for Russian assets to be repurposed and such action enforced.

 “Canada’s example has shown it can be done on a national level,” Mudra said, “but it will be much easier if it is done on a common international treaty. A new model is needed to address Russia’s aggression.”

One of the models that Ukraine is studying is the UN mechanism which forced Iraq to compensate Kuwait after its invasion in 1990.

Washington is also exploring avenues for domestic action, despite opposition from some Republican politicians who fear a legal precedent that would undermine wider private property rights beyond the ill-gotten riches of Russian oligarchs. Sovereign immunity also presents an obstacle to repurposing Russian state funds, including almost $300 billion in central bank reserves that are currently frozen overseas.

In the shattered Kyiv suburb of Irpin, devastated by shelling from Russian-occupied Bucha, there is little debate over who should pay.

 “Russia, of course,” said Elena, 64, who recently returned to Irpin after she was evacuated under shellfire. “It is not just a question of rebuilding, it is punishment. Those who destroyed Irpin must be made to pay.”

Foreign leaders visiting Kyiv beat a path to Irpin’s wrecked bridge, blown to prevent Russian troops reaching the capital. Now a pilgrimage site, it is adorned with a mural taking after Picasso’s Guernica, depicting the bombardment of civilians and their massacre in neighbouring Bucha, crimes now under investigation domestically and by the ICC in preparation for a special tribunal for war crimes in Ukraine.

Many are sceptical that the international efforts to investigate war crimes can be matched by a parallel track on reparations. An international consortium of lawyers is preparing its own mass civil legal action against the Russian state, fearing wider reparations risk becoming snarled in any negotiations to end the conflict.

The effort is being co-ordinated by Jason McCue, a London-based lawyer who successfully sued the 1998 Omagh bombers to compensate families of the victims, despite opposition from those prioritising the Northern Ireland peace process.

“There’s a lot of wishful thinking sort of thing going around in the international community that there’ll be an international reparations commission for Ukraine and all the sanctions on the Russian Federation will just be folded into it,” McCue told The Times. “Well, I haven’t seen that happen anytime in the world before.”

Yuriy Chumak, a Ukrainian Supreme Court judge, said the action was focusing in the first instance on the Russian mercenary Wagner Group which did not enjoy the sovereign immunity afforded the Russian state. Chumak is part of a territorial defence unit, comprised of Ukrainian supreme court justices, working on the class action.

“Our case is that they have carried out acts of terrorism on behalf of the Russian state,” he said. “The crime of Russian aggression needs to be recognised as terrorism for us to act through courts in the UK and US and win compensation for the victims.”

McCue hopes that the strategy could help depoliticise the fraught issue of reparations and put them on a purely legal basis.

“What we’re trying to do is do things outside of politics by doing private actions on a mass scale for the mass number of victims,” he said. “If we don’t do this, people are less likely to get any compensation. We owe it to them to try every avenue.”