How realistic are Russian reparation payments to Ukraine?

There does not yet seem to be an end in sight to the war in Ukraine. But the international community is already discussing how Russia might be forced to pay for the damage caused by its army. On November 14, a UN General Assembly resolution calling on Moscow to pay reparations received 94 votes in favor. Fourteen states voted against the resolution, and 73 abstained.

In September, Ukrainian Prime Minister Denys Shmyhal estimated the direct physical damage as a result of the war so far at $326 billion (€318 billion). He told a meeting in Brussels that World Bank experts had verified the sum, which was likely to have increased by the end of the war. Russia has already rejected the resolution. Russian Ambassador to the UN Vasily Nebenzya said that the document was "legally null and void."

Reparation payments in history

Reparations are effectively compensation payments made by a state for damage it has caused with its criminal actions. International institutions or a post-war peace treaty determine the sums and the nature of the payments, explained international law expert Paul Gragl of the University of Graz in Austria.

One of the best-known cases of reparations concerned the German Reich after its defeat in World War I in 1918. The Treaty of Versailles required the payment of more than 200 billion gold marks over decades. The last transfer was made by the Federal Republic of Germany, the legal successor to the German Reich, in 2010. Germany also had to pay reparations to the Allies after World War II.

Other examples include Iraq's reparations for the occupation of Kuwait in 1990-1991, based on UN Security Council resolutions. They are considered a precedent, as noted by the Ukrainian permanent representative to the UN General Assembly, said Paula Rhein-Fisсher, a research associate at Cologne University's Academy for the Protection of European Human Rights (IORR).

How Russia could be forced to pay

UN General Assembly resolutions are not legally binding. It's more a case of political weight because the resolutions reflect the opinion of the international community, Gragl argued — "a political intention aimed at not letting it be forgotten that Russia is obliged, as the aggressor, to make up for these damages."

Paula Rhein-Fischer also spoke of a political signal. Russia was unlikely to be persuaded to pay reparations by existing international mechanisms, she said. "At the United Nations International Court of Justice [whose decisions are legally binding (Editor's note)] there is a jurisdictional problem. It has jurisdiction only if both states have agreed to become parties to the case. The court is already hearing Ukraine's case against Russia for violation of the Genocide Convention, but compensation will be limited in this case.”

A legally binding decision on reparations could, therefore, be made by the International Criminal Court in The Hague (ICC). "It is entrusted with convicting individuals of genocide, crimes against humanity, war crimes and the crime of aggression, although the ICC cannot prosecute the crime of aggression committed by Russian decision-makers. This is because in this case prosecution of this crime would require a UN Security Council resolution, which Russia, as a permanent member of the Security Council, would veto. Therefore, the establishment of a special tribunal is under discussion," said Rhein-Fischer.

In theory, the European Court of Human Rights (ECHR) could obligate Russia to pay reparations, she continued. However, since Russia left the Council of Europe it is no longer subject to ECHR rulings and has not been a party to the European Convention of Human Rights since September 2022. Thus, the court could only require Russia to compensate Ukraine for the destruction caused from February to September 2022.

Past experience has shown Russia is not likely to implement a ECHR ruling, Rhein-Fischer said, adding that it was "highly disputed" whether the European Convention on Human Rights is even applicable to ongoing conflicts. "For the time being, it seems unlikely that the Russian Federation will pay reparations in the near future." 

Frozen Russian assets as compensation?

Discussions are underway as to whether Russian funds frozen as part of the sanctions imposed on Moscow could be used to pay reparations. For the most part, this would apply to foreign assets of sanctioned Russian companies, the property of private individuals, and foreign exchange reserves of the Russian Central Bank.

"There is a legal difference between freezing assets and confiscating assets," said Gragl, pointing out that freezing is only temporary. Seizing Russian assets as reparations needs a legal basis, explained Rhein-Fischer. There is no international arbitration commission yet, however, and a decision on seizure by national courts involves major legal complications.

The UN resolution approved on November 14 provides for the establishment of a new international mechanism that could help. Ukraine's Deputy Justice Minister Iryna Mudra said it could enable numerous states to move from "discussions to action."

Immunity protects state assets for sovereign purposes — which arguably includes Russia's foreign exchange reserves — from seizure under international law, Rhein-Fischer pointed out. However, the General Assembly resolution might provide the opportunity to include a provision in treaties between Ukraine and third parties that would strip Russia of this immunity.

Third parties, peace treaty

"In my opinion, that point raises legal questions, because contracts cannot be concluded to the detriment of third parties," said Paula Rhein-Fischer. In this case, Russia would be the third party not involved in the contract. "Another question is whether this practice could lead to changes in already existing rules of customary international law."

From a legal point of view, according to the expert, it would be less problematic to lift sanctions against Russia in return for the country's agreement to reparations payments. A peace treaty between parties, where Russia agrees to compensate the damage it has caused would be ideal. "Unfortunately, that is unlikely in the current situation."

This article was originally written in Russian.