Ukrainian mechanism of reparations: why the "German" formula would not work

Every morning a Ukrainian person begins a day by studying the frontline news and developments, searching for the information about the settlements occupied and liberated by Ukrainian soldiers. Everyone is asking when Ukraine wins, as well as when and how the retribution occur, reparations be paid, and the aggressors punished.

War always brings destruction, and each time requires a new approach to repair the damage. We all have the example of the World Wars unleashed by Germany twice in the 20th century. At the end of the First World War, Germany admitted its defeat and signed the Treaty of Versailles, according to which it undertook to pay reparations in the amount of 269 billion gold marks – the equivalent of approximately 100 thousand tons of gold. It took the country almost 90 years to make payments. The last tranche of 70 million euros was paid on October 3, the day of the 20th anniversary of the unification of Germany. United Germany took a twenty-year loan of 239.4 million marks.

Of course, payments were not made for all 90 years. In the 1920s, this amount (269 billion gold marks) was reduced twice and amounted to 112 million, and then Hitler, who came to power, stopped the payments. They were renewed under the London Treaty of 1953. At the same time, part of the sum was temporarily allowed not to be paid: according to the terms of the agreement, these payments were to be resumed only when and if Germany was united.

As a result of the Second World War, Germany capitulated, i.e. was also recognized, as in the First World War, as the loser.

The main difference between the reparation payments by Germany between the First World War and the Second World War is that, after the First World War the amount of payments was agreed (the number was determined), and after the Second World War, the winning countries divided the sectors from which they could export assets without hindrance. According to the results of the Potsdam Conference (1945), it was decided: the claims of the USSR will be satisfied by withdrawing from the eastern zone of Germany and at the expense of German assets located in Bulgaria, Finland, Hungary, Romania and Eastern Austria; the claims of the USA, Great Britain and other countries entitled to reparations were satisfied from the western zones of occupation. Taking reparations from the GDR was stopped by the USSR on January 1, 1954, and for the Western camp with the introduction of the "Marshall Plan". According to estimates of already united Germany, assets worth 15.8 billion dollars were exported from the Soviet occupation zone and the GDR, which is equivalent to approximately 14,041 tons of gold, but these data have not yet been confirmed.

Germany's reparations payments for the First and Second World Wars can be called classic forms of reparations payments: the losing party was recognized as having signed the capitulation, then paid either in money (after the First World War) or in goods, production, and technology (after the Second World War).

Why are classic forms of reparations not suitable in our case, and what formula can be relevant?

While the war is not over, and we do not understand how long it will last, what final documents will be signed, we can act in accordance with international law. There is an aggressor who attacked a sovereign state, brings destruction, so he must accept full responsibility for what he has done. On the part of Ukraine, it is a national liberation war, on the part of the Russian Federation, it is a special military operation, i.e. status regardless of war. But everything can change very quickly and everything depends on the actions of the Armed Forces at the frontline. Further, the Russian Federation is a state with nuclear weapons, with which it is trying to threaten the whole world. Also, albeit illegally, the Russian Federation takes a seat in the UN Security Council (an organization created to stop wars). Legal instruments, thanks to which it is possible to demand compensation for aggression against an independent state, no matter what. And the consent of the Russian Federation is also absent. But, such tools can be created, not only that, they have already been created and can work even during the ongoing war.

That is why a special working group was created in Ukraine almost an hour ago, which, together with representatives of partner countries, is engaged in the development of an effective mechanism for paying reparations. And such a mechanism has been developed, it is the International Compensation Mechanism. It was legitimized by the UN General Assembly on November 14, 2022. Then the majority of votes supported the draft resolution, which proposes to create a mechanism for compensation for damage to Ukraine as a result of Russian aggression. It also became the basis of the seventh point of the "Peace Formula" of President Zelensky – "Justice".

The Ukrainian reparations mechanism is a global tool that assumes that all damage will be recorded in the Register, then the Special Commission will award payment, and the payment itself will come from the fund, which will be filled at the cost of the arrested and then confiscated assets of the Russian Federation abroad. And this is the last point, but it is very difficult to implement, since the very creation and operation of the Damage Register has already been approved by spoken in Reykjavík on May 17, 2023. However, the development of a legal agreement, the basis for the transfer of seized assets of the Russian Federation in favor of the fund, is still under discussion. The main obstacle is overcoming sovereign immunity. But when this point will soon be agreed upon, the countries that have frozen Russian assets will be able to accept international contractual obligations and transfer assets to the fund. For this, they already have the support of the world community - a resolution of the General Assembly. And the Register was created, and this is already half the work done. Its existence indicates that there is no turning back.

What is the uniqueness of the Ukrainian reparations mechanism and what distinguishes it from similar ones implemented earlier in world history? If you take the experience of two world wars of the 20th century, reparations were received by the state as a whole, separately, the person who suffered from the war is not. Only as a result of the Second World War were reparations for the Holocaust appointed. In 1952, the Luxembourg Treaty on Reparations was signed between the Federal Republic of Germany and Israel on payments to the victims of the Holocaust.

Our mechanism implies compensation not only to the state of Ukraine, to businesses, but also to all private individuals, applicants who applied to the Register. Everyone who lost property, health because of the war, experienced sexual violence, was subjected to torture will be awarded compensation. Victims of war, people affected by war will be the main recipients of compensation.

Today, the international compensation mechanism is the most realistic tool for compensation in a situation, I repeat, when the Russian Federation does not recognize its aggression, which means that it does not plan to pay any compensation. But the fact of aggression has been confirmed by the entire international community, which means that it will not be possible to "get out of it". And there is something to pay for, a large amount of assets of the Russian Federation are frozen abroad. Yes, such a compensation option, as offered and already implemented by Ukraine, is unique in its kind. It is difficult to compare it with the experience of reparations, the way Germany, which lost twice, did it, but the enemy is not simple either - with nuclear weapons and a seat in the UN Security Council. But Ukraine is supported by almost the whole world in the fight against the aggressor on all possible battlefields. And it is precisely on the global decision of the partner countries regarding the frozen assets of the Russian Federation that we count on 100% of the work of the International Compensation Mechanism.