Since Russia’s full-scale invasion began, Ukraine has endured severe economic losses.
As of February 2024, the World Bank estimated damages at $486 billion, impacting vital infrastructure, housing, and economic stability. Russia’s intensified targeting of Ukraine’s energy facilities during the spring and summer 2024 has further increased this toll that is not yet accounted for in the World Bank’s latest calculations.

On November 14, 2022, the UN General Assembly adopted Resolution ES-11/52, affirming that Russia must be held accountable for violations of international law against Ukraine, including the obligation to make reparations for damages, injuries, and losses inflicted. However, as the war continues, Russian “scorched earth” tactics and deliberate economic destruction only compounds these losses.

To ensure Ukraine’s victory, comprehensive economic actions must be directed at Russia now to pressure it into ceasing aggression and withdrawing from Ukraine, as well as to restrict its capacity to sustain prolonged warfare. Yet, immobilized Russian Central Bank assets worth approximately $300 billion remain untouched, despite the solid justification by the prominent legal experts that the confiscation of these assets would constitute a lawful countermeasure under international law, supporting Ukraine’s right to reparations.

In 2024, Ukraine’s partners did make a number of important steps towards using Russian assets for Ukraine’s self-defense and recovery, yet in practice, they mostly regarded windfall profits only, still short of full confiscation. The US Congress adopted the REPO Act which is still far from the launching of implementation, and G7 countries and EU agreed to issue Ukraine Extraordinary Revenues Acceleration Loans (ERA Loans) worth $50 billion3 that Ukraine should start receiving by the end of 2024.

Meanwhile, the funding of this scale significantly falls behind Ukraine’s actual needs. Some extra arguments against confiscating Russian assets for Ukraine center on doubts about Ukraine’s ability to manage such a large influx of funds and concerns about transparency and accountability, as well as the possible impact on European in general and Belgian in particular financial markets.

This brief presents the solution to address these issues, detailing the need to establish a new institution with the optional title ‘Ukraine Restitution and Reconstruction Bank’ that would serve as a compensation fund within the existing international Compensation Mechanism and be simultaneously tasked with maximizing the profits on confiscated assets in order to ensure the coverage of Ukraine’s pressing needs primarily in defense.

The bank will have the necessary safeguards on board to address the financial stability fears of the European states.

FULL BRIEF IS ATTACHED AND VIA THE LINK. You are welcome to read it.