Vasyl Selifonov

As is well-known, on 24 February 2022, the Russian Federation launched a full-scale military invasion into Ukraine. Since then, the war has been ongoing for over one-and-a-half years, and daily, due to it, people in Ukraine die, infrastructure is destroyed, along with residences, manufacturing units, offices, and so on.

What if you had property, a business, investments, or business projects in Ukraine that were destroyed, suffered damage, or incurred losses due to the war? Here, we’re not talking about a regular legal violation, but a state act of military aggression. Nevertheless, the issue of compensation remains relevant.

In Ukraine, the topic of war-induced damages compensation has been raised for quite some time, and several avenues theoretically exist for seeking it. Among them are:

• filing a lawsuit in a Ukrainian national court to recover damages from the Russian Federation;
• lodging a complaint with the European Court of Human Rights (this option is no longer available due to Russia’s complete withdrawal from the Council of Europe); and
• resorting to international arbitration.

Each of the aforementioned options has its pros and cons. Still, they all essentially run into the norms of international law, which make it incredibly challenging to enforce a court’s decision to recover money from a state.

To address this issue, Ukraine initiated the establishment of the International Compensation Mechanism, consisting of the International Register of Damages (already established, with Ireland as one of its founders); the International Compensation Fund, whose purpose is to accumulate and store seized assets of the Russian Federation; and the International Compensation Commission, which will review claims from victims against the Russian Federation.

The establishment of this mechanism is a practical embodiment of UN General Assembly Resolution A/RES/ES-11/5 of 14 November 2022. This resolution acknowledged the need to create an international compensation mechanism in collaboration with Ukraine.

Thus, a full-cycle mechanism is envisaged, starting from documenting the inflicted damage to making a decision and the actual payout to the claimant.

This mechanism serves as a just and proportional response to the security challenges and the unprecedented scale of harm inflicted by the Russian Federation since the inception of the war. This stance refers to the fact that by the General Assembly Resolution 3314 (XXIX) of December 14, 1974, a definition of the term “aggression” was provided, and it was specifically stated:

The fact that Russia has committed an act of aggression, and in regard to this, the International Court of Justice issued provisional measures, effectively deeming the Russian incursion unlawful and obligating Russia to withdraw its troops, provides a solid basis for the creation of the International Compensation Mechanism.

The principle guiding Ukraine and its global allies is straightforward — the aggressor must be held accountable and must compensate for all the harm inflicted, ranging from destroyed houses and apartments of ordinary citizens, to damages incurred by businesses, and, of course, environmental damages.

Incidentally, the Ukrainian Ministry of Environment has estimated that besides the direct harm to Ukraine’s ecology, the Russian military aggression has set back the world from climate neutrality by over 150 million tons of CO₂ emissions. This is monetarily equivalent to approximately €11.7 billion.

So, how can one utilise the proposed International Compensation Mechanism if you or someone you know has suffered damages? First and foremost, these damages need to be recorded in Ukrainian national registers that document these instances. Data from the national damage registries will be harmonised with the already established International Register of Damages. Thus, it’s essential to document instances of harm now, without waiting for the war’s end or a cessation of hostilities.

Additionally, it should be noted that there are only three basic criteria by which the International Registry of Damages accepts data:

• they were inflicted on 24 February 2022, or later;
• they occurred within the internationally recognized borders of Ukraine, extending to its territorial waters; and/or
• they resulted from the internationally wrongful actions of the Russian Federation in or against Ukraine.

As can be seen, the criteria are quite straightforward, and there is no need to prove that the harm was inflicted specifically by the Russian armed forces and not the defending Ukrainian army. This is because all military actions in Ukraine are due to the aggressive military invasion by the Russian Federation, which bears responsibility for it.

So, who can submit their damage data to the International Registry? Both individuals and legal entities, as well as the state of Ukraine. This means that any individuals or legal entities, regardless of whether they are residents of Ukraine or foreigners, can submit their data to this registry, provided they have suffered losses.

It’s worth mentioning separately that the International Registry of Damages merely records the fact of inflicted harm; it is not a court and does not assess these damages. Thus, apart from documenting the harm, one also needs to evaluate the damage and be prepared for the review of the complaint by the International Compensation Commission. If a decision is made in favour of the applicant, the International Compensation Fund will execute that decision and pay the affected party the appropriate compensation amount.

How long can this entire procedure take? There’s no definitive answer to this question at the moment. However, events on the international legal front are unfolding quite rapidly: in November 2022, the UN General Assembly adopted a resolution on the need to establish an international compensation mechanism; by May 2023, the International Registry of Damages had been instituted; and now the Ukrainian Ministry of Justice is confident that by the end of 2024, all components of the International Compensation Mechanism will be established and operational.

Lastly, it’s important to note that currently, various countries are drafting national laws to support the establishment of the International Compensation Mechanism. For example, the US Senate is considering the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act (REPO for Ukrainians Act) proposed by Senator J. Risch and co-authored by Senator S. Whitehouse. This act supports the establishment of the International Compensation Mechanism to compensate for the damages caused by the Russian Federation’s armed aggression against Ukraine.

Such steps instil confidence that the replenishment of the International Compensation Fund with seized money and assets from the Russian Federation will be sufficient to meet the demands of the affected parties.

• Vasyl Selifonov is a Ukrainian lawyer now living in Ireland. He previously advised the Ukrainian government on claims against Russia over environmental harms caused by the invasion.