Rebuilding Ukraine: A New Model for Reparations

This week alone, Russia’s war against Ukraine has come to new and horrific depths.

Russia has launched missile attacks on civilian and commercial buildings in the Ukrainian capital Kyiv and Dnipro, and across the country. It seems that Russia appears to be shifting from a conflict largely fought on the battlefield to a new war, one of the tactics of ‘terror bombing’.

If Russian military analysts can be believed, this will lead to a new style of fighting, one characterised by ‘total war’ with an economic dimension. Punishment, in other words, for Ukrainian successes.

The questions this new spate of attacks raise are profound. How can Ukraine be compensated for what Russian bombs and missiles have done to its major cities and its economy? How can Ukrainian society be rebuilt? Where can the funds come from?

This is a question that international policymakers have considered since the beginning of Russia’s invasion.

This is a time of high inflation. Around the world, national debts are rising and budgets are tightening. Funding the reconstruction of Ukraine from domestic budgets is likely to be unpopular and politically unpalatable, even among Ukraine’s most determined allies.

Similarly, the possibility of seeking reparations from Russia using traditional models seems remote.  Russia remains on the UN Security Council, and will plainly veto any attempts by the global community to make it pay for the damage it has caused to Ukraine.

Global leaders and policymakers have sought a solution, and in response, I and the New Lines Institute have convened legal and policy scholars to produce an answer. The result, a new Multilateral Action Plan on Reparations represent a new model of reparations. It is an effective, ground-breaking system to designed to compensate Ukraine for the damage caused by Russia’s invasion.

We launched the report yesterday in Westminster, and the day before in Brussels. We are encouraged by the reception.

In thirteen legal conclusions, the report spells out an international legal process to identify, collect, and distribute sanctioned Russian money, for the benefit of Ukraine.

Our legal analysis envisages the creation of a new fund and compensation commission modelled on that of the United Nations Compensation Commission (UNCC) which was created by the UN to compensate Kuwait in the face of Iraq’s invasion in 1990. A new reparations deal could be established by international agreement between willing parties.

There are precedents : in the aftermath of the Second World War, multiple countries working together took action to define and collect a pool of assets of the defeated Nazi state.

The agreement allowed for the seizure of German assets in those countries which had signed the treaty, and provided for negotiation with those that did not to set up joint efforts to locate and seize Nazi assets internationally for use in reparations payments. This could be done again.

The democratic world has immense financial muscle and legal power. An agreement of this kind would hardly be beyond countries which have already done so much to sanction Russia and help Ukraine.

Signatories of this agreement would commit to seize Russian assets within their jurisdiction, in accordance with their national and constitutional requirements, and afterwards place them into the fund, for subsequent distribution by the new compensation commission.

Many allies of Ukraine have already sanctioned, frozen and seized many billions of dollars of Russian state assets. This money – already sitting idle under the control of foreign governments – can be put to use rebuilding and compensating Ukraine for Russian aggression.

This capital will be vitally important in the rebuilding of Ukrainian infrastructure and the restarting of its economy. It will also be essential in paying for the cost of assisting the people and society of Ukraine in recovering their mental health and social stability, both of which have been adversely affected by the war.

Ukrainians and the Ukrainian state could petition a commission for reconstruction and reparation funds. Once evidence of necessity was produced, the commission could draw on funds gathered by these methods and disburse the money.

There is a lot of Russian capital, including central bank assets and frozen oligarch capital.

But other sources of reparations are also possible. One option compatible with the UNCC precedent, would be to place a charge on Russian oil and gas revenues which would be paid into the Ukrainian fund.

A further source of capital that can be seized are a broader range of Russian assets held in the West. Under Vladimir Putin, Russia has developed into a fully ‘criminal gang state’ where the courtiers and leading supporters of the Kremlin leadership have been permitted to plunder the state. This plundering has now continued for over 20 years. Assets ripe for seizure in the order what our report assesses to be in the ‘low trillions’ of dollars.

Similarly, a state as corrupt and looted as Russia’s has been for the twenty years of Vladimir Putin’s rule presents other opportunities for freezing and seizure.

Much of this is common knowledge and the subject of extensive reporting. The late author Karen Dawisha in her book Putin’s Kleptocracy noted that in Russia, every year, hundreds of billions of dollars are paid to affiliates of the regime in bribery money alone. A creative treaty regime could render those assets available for seizing and use in the fund.

The authors intend this model to assist Ukraine as it rebuilds a shattered country, economy and society in response to Russian aggression.

Future wars will resemble Russia’s war in Ukraine more than they resemble the Second World War or Saddam Hussein’s invasion of Kuwait. International law, and international governance, will have to adapt in order to prevent states which launch aggressive wars from escaping punishment and the duty to compensate the victims.

We believe the New Lines model will be a tool to help keep future peace as well as one that can aid in Ukraine’s reconstruction.

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