Rat u Ukrajini

"never again". Unless it harms out commerical interests.

— Darth Putin (@DarthPutinKGB) May 26, 2022

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Using Russian assets to rebuild Ukraine won’t be easy
Western leaders are scrambling for a legal mechanism that preserves trust and due process


When Volodymyr Zelensky addressed the World Economic Forum via video link this week, he issued a heartfelt appeal to the west: use the assets seized from the Russian central bank and country’s oligarchs to fund the estimated $500bn cost of rebuilding Ukraine. “If the aggressor loses everything, then it deprives him of his motivation to start a war,” he said. “Values must matter when global markets are being destabilised.”

Many western leaders seem to agree. Josep Borrell, the EU’s chief negotiator recently suggested there is “logic” in using Russian foreign exchange reserves to rebuild Ukraine. And Ursula von der Leyen, European Commission president, responded to Zelensky’s appeal in Davos by noting that Russia “should also make its contribution” to reconstruction.


This makes for rousing political rhetoric. However, the dirty secret at this week’s WEF meeting is that these public appeals are causing private angst for many of the Davos corporate and financial elite, from the west and its allies.

This is not because of a lack of sympathy for Ukraine’s plight; nor a failure to recognise that the postwar reconstruction bill will be vast. Instead, the issue is the lack of due process. While most think there is an overwhelming moral case to help Ukraine — and punish Russia’s aggression — freezing assets is quite a different matter from disbursing them. If either is done without a consistent and transparent framework, western governments will either face years of costly lawsuits or end up smashing apart the trust that underpins their political economies. As Zelenksy himself noted, “values” matter now, more than ever — particularly when markets are destabilised.


“We have been told for decades that the west upholds the rule of law, and we invested in the west on that basis,” one leading non-western sovereign wealth investor observes. “Is that being ripped up now? What are we supposed to think?” 

Of course, many western observers — and Ukrainians — might argue this is now a second-order question, given the horrors of Russia’s invasion. But I think that those worrying about due process have a point. So, how should this be resolved? Leaders are scrambling for solutions. von der Leyen told the WEF this week “our lawyers are working intensively on finding possible ways of using frozen assets”. Separately, western lawyers sympathetic to Ukraine are studying existing legislative tools to see whether they can be repurposed to this end.


One idea floating around is to use America’s extensive civil tort laws to enable Ukraine to claim for “damages” from oligarchs’ US assets. A variant of this might be attempted by plaintiffs in France and the Netherlands too, I am told. Another idea is to use arbitration processes linked to some little-known direct investment treaties signed between Russia and the Ukraine in the 1990s, which create a way to impose damages in cases of economic harm.

Separately, the US administration could seek express legislative authority from congress for introduce new legislation enabling Russian currency assets to be seized. Or the US president might use the International Emergency Economic Powers Act of 1977 to redeploy assets in American banks, possibly drawing on precedents established in the 1980s in relation to Iran.

One of the most interesting ideas of all has emanated from Kyiv, which has quietly drafted a memo calling for a new UN commission for “constitutional, legal, transparent and effective” blocking and seizing of assets belonging to those connected with armed aggression. While the current war in Ukraine is being cited as the pilot project, the idea — or hope — is to create a global framework to be used in other conflicts too.

The good news is that this shows Kyiv’s recognition of the need for due process. Some Ukrainian business figures are thinking the same way: Rinat Akhmetov, the Ukrainian billionaire, said this week that he would sue Moscow for “appropriate reimbursement for all costs and lost revenue” from the destruction of his assets in Mariupol, such as the Azovstal steel plant.

The even better news is that Ukraine’s ideas are likely to be welcomed. “The underlying concept of having an international framework covering sanctions could potentially lead to an improvement over the current rather ad hoc imposition of sanctions,” says one western lawyer, who has seen the draft memo.

But the bad news is that Russia’s veto in the security council will make it hard to establish a UN commission. The idea of deploying the 1977 US emergency powers act is legally controversial, and passing any American legislation swiftly is likely to be difficult. Unless the concept of due process and property rights is overturned, Russian assets will probably remain frozen for many years or endless legal battles will ensue.

None of these prospects are remotely appealing. But the latter two are arguably the least bad. Unless, of course, von der Leyen can now find a legal process or, better still, the UN embraces Ukraine’s sensible ideas. Either way, the one certainty is that lawyers will soon be reaping fat fees. Therein lies the reality of kinetic and economic war in the 21st century.

Mór Thököly wrote:Da, naravno, u ovoj fazi glavni ciljevi su Kramatorsk i Slovjansk. Time ce se meriti uspeh ove ofanzive.

rujofil wrote:

Mór Thököly wrote:Da, naravno, u ovoj fazi glavni ciljevi su Kramatorsk i Slovjansk. Time ce se meriti uspeh ove ofanzive.

Pitam se dokle ce da idu s obzirom da kad padnu Kramatorsk i Slavjansk sve je otvoreno do Dnjepraunava.

fikret selimbašić wrote:

rujofil wrote:
Pitam se dokle ce da idu s obzirom da kad padnu Kramatorsk i Slavjansk sve je otvoreno do Dnjepraunava.

Ići će dokle budu mogli.

Filipenko wrote:Zar nije vec ustanovljen konsenzus da ce ici do Pridnjestrovlja?

Cousin Billy wrote:Ići će ponovo do Kijeva, pa dokle stignu. Malo su mi nejasne teorije da će proglasiti pobedu nakon ispunjenja operativnih ciljeva na istoku. Uslov za to je da Ukrajina pristane da ne dira novu granicu, što se ne čini baš realnim. Ovo je totalni rat sa totalnim ciljevima: zbacivanje režima u Kijevu/proterivanje Rusije, u najmanju ruku, na poziciju od pre 24. februara.

fikret selimbašić wrote:

Cousin Billy wrote:Ići će ponovo do Kijeva, pa dokle stignu. Malo su mi nejasne teorije da će proglasiti pobedu nakon ispunjenja operativnih ciljeva na istoku. Uslov za to je da Ukrajina pristane da ne dira novu granicu, što se ne čini baš realnim. Ovo je totalni rat sa totalnim ciljevima: zbacivanje režima u Kijevu/proterivanje Rusije, u najmanju ruku, na poziciju od pre 24. februara.

Ma da, nema političkog rešenja dok se ne prije toga ne desi vojno. Nisam vjerovao da će krenuti u invaziju sve do onog Putinovog igrokaza sa državnim vrhom. Nisam vjerovao jer mi je to djelovalo preveliko da bi se zakotrljalo, a sad kad se zakotrljalo nebo Dunav Jadran je granica.

Ubijeđen sam da će u trenutku kad Ukrajini ozbiljno zagusti, npr. nakon ruskog prelaska Dnjepra, da se u sukob otvoreno uključe i Poljaci, vjerovatno i Slovaci.

fikret selimbašić wrote:Je li još nekome upadljivo da je ovo rat sa (pre)malo vojnika za ovolike ciljeve. Sa obje strane nema ni milion angažovanih, ne bi mi taj broj izgledao mali da je ovo hi tech rat i da se uglavnom vode beskontaktni bojevi. Ima tu modernih raketla svakojakih, rade i one poso ali se glavnina toga rešava po WW2 modelu i sa tehnikom starom u prosjeku ćetrdeset+ godina.

Alright team, news came out today that the US is looking at giving Ukraine MLRS systems. BrOSINT is of course saying this is a game-changer and will turn the tide of battle.

It's going to be a bust like every other "game changer" weapon thus far. Let's look at why. pic.twitter.com/rxCyieuUvT

— Armchair Warlord (@ArmchairW) May 27, 2022

Mór Thököly wrote:

fikret selimbašić wrote:Je li još nekome upadljivo da je ovo rat sa (pre)malo vojnika za ovolike ciljeve. Sa obje strane nema ni milion angažovanih, ne bi mi taj broj izgledao mali da je ovo hi tech rat i da se uglavnom vode beskontaktni bojevi. Ima tu modernih raketla svakojakih, rade i one poso ali se glavnina toga rešava po WW2 modelu i sa tehnikom starom u prosjeku ćetrdeset+ godina.

Nine vise XX vek, jbg.