1. Introduction
1.1. Origin
1. On 24 February 2022, the Russian
Federation initiated the large-scale invasion of Ukraine without provocation,
the largest international invasion since 1941. The Russian Federation’s
illegal war of aggression has caused catastrophic destruction and
suffering to the Ukrainian people and Ukraine, resulting in grave human
and material losses and numerous war crimes against civilians. The
International Criminal Court (ICC) has already issued an arrest
warrant against the Russian President and the Russian Commissioner
for Children’s Rights, in relation to the forced deportation of
Ukrainian children.
2. As the Russian Federation continues to wage war and to commit
war crimes, crimes against humanity and other serious human rights
violations in Ukraine, it is clear that when this conflict is over
Ukraine will require significant assistance to rebuild its civilian
infrastructure. The Russian Federation should be held responsible for
compensating the human and material losses incurred.
3. Since the beginning of the large-scale invasion, the Parliamentary
Assembly has unanimously adopted a host of texts condemning the
aggression, its aspects and consequences. In March 2022, it took
a resolute position in favour of the immediate expulsion of the
Russian Federation from the Council of Europe, which was subsequently
followed up by the Committee of Ministers. In May 2023, as consistently
asked for by the Assembly, the Council of Europe established a Register
of Damage Caused by the Aggression of the Russian Federation Against
Ukraine.
4. The Russian Federation's non-participation in international
dispute settlements, and noncompliance with international judgments
and obligations, present a complex challenge in the pursuit of justice
and reparation for the harm caused by the Russian Federation's actions
in its invasion of Ukraine. Given the Russian Federation's behaviour
in international forums and its use of the Security Council veto,
there might indeed be obstacles to securing a direct implementation
of reparations through traditional legal channels.
5. The motion for a resolution to seize and transfer Russian
State assets to an international compensation mechanism is an attempt
to address this challenge. This approach aims to forcibly require
the Russian Federation to comply with obligations it has undertaken
under international law by redirecting assets to address the damages
caused.
6. This report will further demonstrate the need to establish
an international compensation mechanism under the auspices of the
Council of Europe.
1.2. Purpose
and scope
7. The report will focus on the
following objectives: 1) supporting reconstruction and recovery
of Ukraine; 2) calling for and presenting the measures for the confiscation
of Russian State assets; 3) establishing an international compensation
mechanism under the auspices of the Council of Europe; 4) presenting
a united front against the aggression worldwide.
8. The report is based on the premise that the Russian Federation
must be held accountable for its destruction of Ukraine and that
it can be safely assumed that it will not contribute to the reconstruction
effort voluntarily. In such situations, where a State is unlikely
to voluntarily agree to make full reparations, other States and
intergovernmental organisations may explore alternative mechanisms
to ensure that the injured parties receive the reparations they
are entitled to under international law.
9. Several countries holding Russian sovereign assets have frozen
approximately US$300 billion in Russian State assets. The already
frozen Russian State financial assets must be made available for
the reconstruction of Ukraine. States holding these assets should
co-operate to transfer all the seized Russian State assets to an
international compensation mechanism. In the context of this report,
the term “State asset” means any funds or other property that are
owned by the government of an aggressor State or an affiliated aggressor
State, including by any subdivision, agency, or instrumentality
of that government.
10. The scope of this report is to outline the path for the confiscation
of the Russian State assets and their transfer to an international
compensation mechanism to aid Ukraine’s recovery and reconstruction.
2. General context
11. As laid down in its Statute
(ETS No. 1), the Council of Europe has a core mission focused on
uniting its member States to preserve and uphold shared values while
advancing economic and social progress. Its primary goal is to safeguard
and actualise these common principles, fostering a collective heritage
while aiding in the development of member States.
12. Central to this mission is the adherence to the rule of law
and the further realisation (statute 1.b) of human rights and fundamental
freedoms for all individuals within the jurisdiction of each member
State. This commitment underscores the Council of Europe's significance
in promoting unity, democracy, and the protection of human rights
across Europe. As stated in Article 3 of its Statute, “Every member
of the Council of Europe must accept the principles of the rule
of law and of the enjoyment by all persons within its jurisdiction of
human rights and fundamental freedoms and collaborate sincerely
and effectively in the realisation of the aim of the Council”.
13. According to principles of international law, when a State
is found to be responsible for an internationally wrongful act,
it is obliged to provide full compensation for the harm caused by
that act. However, the forms of reparation – restitution, satisfaction,
or compensation – can vary depending on the circumstances and the nature
of the wrongful act. In cases where restitution (restoring the situation
to what it was before the wrongful act), or satisfaction (acknowledgment
of the breach and its consequences) are not feasible, compensation becomes
the primary means of redress. In the context of the situation involving
the Russian Federation's actions against Ukraine, given that restitution
or satisfaction are impractical, international legal principles
would support the necessity of compensation. This compensation could
encompass damages caused by the wrongful act, such as loss of life,
destruction of property, economic hardships, and other adverse effects
resulting from the breach of international law.
14. Now is the time for Council of Europe member States to move
from sanctions to countermeasures. Under international law, States
possess the authority to enact countermeasures against a State that
has seriously breached international law. These countermeasures
are actions taken with the aim of inducing the breaching State to
comply with its international legal obligations. They can take various
forms, one of which involves the suspension or limitation of certain
customary privileges or obligations that one State usually extends
to another, such as in financial matters. In the case of the Russian
Federation's serious breaches of international law, States may,
under the principle of countermeasures, take actions that affect
the Russian Federation’s financial assets or transactions.
15. Russian sovereign assets should consequently be seized and
transferred to an international compensation mechanism, established
under the auspices of the Council of Europe and open to both its member
and non-member States. These funds would then be used to compensate
Ukraine, its citizens, companies and government, for damages caused
by the Russian Federation’s unlawful acts accompanying its illegal
invasion.
3. Support
for the reconstruction of Ukraine
3.1. The
role of the Council of Europe
16. The Council of Europe is unique
for its distinctive focus on the core dimensions of the rule of
law, pluralistic democracy, and human rights. As a result, the Organisation's
primary objective is to serve as a fundamental pillar of democratic
security and to facilitate successful and effective co-operation
in these areas, not only within Europe but also on a global scale.
17. The Council of Europe plays a crucial role in defending democratic
values, ensuring that the rule of law is upheld, and protecting
and promoting human rights. It accomplishes these goals through
various mechanisms, including conventions, monitoring processes,
and dialogue with member and non-member States. That is the reason
why the international compensation mechanism should be concluded
under the auspices of the Council of Europe and open to both its
member and non-member States.
18. In May 2023, the Council of Europe established a Register
of Damage Caused by the Aggression of the Russian Federation Against
Ukraine. It is obvious that in order to ensure a comprehensive system
of accountability an international compensation mechanism must be
created to adjudicate, in accordance with established judicial norms,
claims presented by Ukraine on behalf of its citizens, entities,
and governmental entities, or directly by individuals and entities.
19. By June 2023, the documented damages to Ukraine's infrastructure
caused by the Russian Federation's aggression reached US$150,5 billion
as reported by the Kyiv School of Economics,
whereas damages to the economy reached
US$265,6 billion. This brought the total of damages to US$416,1
billion by June 2023. Residential buildings account for the largest
share of damages, totalling 37,1% or US$55,9 billion, followed by infrastructure
at 24,3% or US$36.6 billion. Only during the first year of the war,
153 900 houses were completely destroyed.
20. Additionally, the education sector has incurred direct damages
of US$9,7 billion as a result of the war, totalling 3 170 affected
institutions by February 2023. These include approximately 1 500
secondary education centres, 909 preschools, and 528 higher education
establishments.
21. By June 2023, the damage inflicted on Ukraine's energy sector
has grown to an estimated US$8.8 billion. This increase in the assessment
encompasses multiple factors. Firstly, it accounts for the damages
incurred in the nuclear energy sector. Additionally, there have
been updated evaluations regarding the destruction and impairment
of natural gas transportation facilities. These revised calculations
and assessments have contributed to the overall rise in the estimated
cost of damages within Ukraine's energy infrastructure.
22. One year of the Russian Federation’s large-scale invasion
has not only taken many lives, with a significant impact on Ukraine’s
economy and infrastructure, but also severely affected the agricultural
sector. The Rapid Damage and Needs Assessment (RDNA) that was carried
out by the Government of Ukraine, World Bank, United Nations, and
the European Union,
presents the results in detail, while
not covering the damages and losses in irrigation, food industry,
and agricultural logistics, which are closely linked to agriculture.
It estimates US$40.2 billion in damages and losses to the agricultural
sector.
23. As we near the end of the second year of the aggression, these
damages and losses have multiplied, and not just in terms of infrastructure
and resources but also in the humanitarian toll it has taken on
the people involved. The repercussions often extend far beyond the
immediate physical destruction, encompassing social and economic
impacts. According to the United Nations High Commissioner for Refugees
(UNHCR), the war has resulted in a significant number of internally
displaced people with many more Ukrainians having left the country.
The extensive shelling and conflict have driven approximately 5.1
million people from their homes, leading to internal displacement.
Furthermore, over 6.2 million individuals have crossed into neighbouring countries
like Poland, Hungary, Republic of Moldova, and other global destinations.
Among these countries, Poland has been the primary host, welcoming
nearly 60% of refugees fleeing Ukraine.
24. The plight of refugees is particularly concerning, as it creates
a ripple effect across borders, impacting neighbouring countries
and straining resources on a larger scale. The costs associated
with accommodating and supporting refugees are immense and can have
long-term implications for both the displaced individuals and the
nations offering aid. As the conflict continues, the humanitarian
demands have further escalated during the second year and have widened.
It has been estimated that approximately 17.6 million individuals
in Ukraine needed humanitarian assistance in 2023.
25. The Council of Europe's foundational principles, indeed centred
on the rule of law, human rights, and democratic governance, create
a robust framework to address the growing challenges stemming from authoritarian
trends within member States and coming from outside, such as the
Russian Federation's aggression against Ukraine.
26. The Organisation's mechanisms for dialogue, conventions, and
monitoring systems offer crucial tools to engage member States in
discussions and actions aimed at preserving and reinforcing democratic
values. The Council of Europe's emphasis on these principles allows
for constructive engagement, dialogue, and the promotion of mutual
understanding among member states.
27. Moreover, the Council of Europe already employs and has excellent
experience with several monitoring mechanisms to ensure its members
adhere to agreed-upon standards in democracy, human rights, and
the rule of law. These mechanisms will be very instrumental for
the establishment and functioning of the international compensation
mechanism, including: 1) The European Court of Human Rights (the
Court). Although not directly a monitoring body within the Council
of Europe, the Court, established by the European Convention on
Human Rights (ETS No. 5), is a crucial part of its human rights
monitoring system. It hears individual or State applications alleging
violations of the civil and political rights set out in the Convention;
2) The Committee of Ministers, which monitors and oversees the execution
of judgments by the European Court of Human Rights, ensuring member
States comply with the Court’s decisions; 3) The European Commission for
Democracy through Law (Venice Commission), which plays a significant
role in providing legal advice and expertise on constitutional matters,
supporting member States in ensuring their legislation and constitutional frameworks
align with European standards; 4) The European Committee for the
Prevention of Torture and Inhuman or Degrading Treatment or Punishment
(CPT), which carries out visits to places of detention in member
States to prevent torture and inhuman or degrading treatment.
28. In addition, the engagement of the Assembly in critical matters,
particularly those pertaining to peace and stability in Europe and
beyond, reinforces its influential role. To this purpose, the diversity
within the Assembly is a considerable asset, since it encompasses
a wide range of political perspectives, including the opposition.
This pluralist representation enables the Assembly to consider and
advocate for measures like the confiscation of Russian State assets
or the establishment of an international compensation mechanism,
should these measures align with the overarching objectives and
values of the Council of Europe. Given the complexity and significance
of such measures, the diverse viewpoints within the Assembly can
contribute to a more comprehensive, well-rounded discussion. This
diversity can aid in deliberating on the potential ramifications,
ethical considerations, and broader impacts of such actions, thus
enriching the decision-making process. Furthermore, the Assembly’s
oversight capabilities play a pivotal role in monitoring and ensuring accountability.
When proposing or implementing significant decisions, this mechanism
helps maintain transparency and ethical considerations.
3.2. Measures
for the confiscation of Russian State assets
29. Supporting the reconstruction
of Ukraine after all the damages caused by the Russian aggression
is an essential aspect of the Council of Europe's mission. It is
important to note that the reconstruction of Ukraine will be a multifaceted
process that will require broader international co-operation and
negotiations. That is why the Council of Europe should contribute
significantly, within its mandate and complementing efforts by other international
organisations and governments, to achieve a sustainable and peaceful
reconstruction.
30. The Resolution adopted by the United Nations General Assembly
(UNGA) on 14 November 2022 on “Furtherance of remedy and reparation
for aggression against Ukraine”
explicitly invokes the claim for compensation
and recommends for national and international actions, and it can
fulfil specific procedural prerequisites under international law.
Indeed, in the realm of international law, certain procedural steps, including
the notification of claims and an opportunity to comply, are often
considered necessary before implementing countermeasures. By meeting
these procedural requirements, this resolution can be seen as strengthening
the case for full State countermeasures under international law.
31. This resolution's articulation of the claim for compensation
and its call for action can be considered as providing a formal
notice and an opportunity for the Russian Federation to comply.
This process would ensure that the Russian Federation has been formally
notified of the claims against it and has been provided an opportunity
to comply with the demands or obligations set forth in the resolution.
The Russian Federation’s possible failure to comply could potentially
serve as a basis for the justifiable implementation of countermeasures
as a means of inducing compliance with international law. This adherence
to procedural requirements will bolster the legitimacy of any subsequent
actions taken by concerned States or entities, as it demonstrates
a commitment to legality in the pursuit of justice and reparations
for breaches of international law.
32. The distinction between State and private property is a critical
aspect in this context. State property, unlike private property,
does not benefit from the same protections, especially when it comes
to actions taken in response to breaches of international law. This
legal framework underlines the authority to take executive decisions
for such measures, bypassing lengthy court procedures in some cases.
33. This report outlines a proactive approach for individual States
to manage and address frozen Russian State assets within their respective
jurisdictions. The primary focus is on identifying and transferring
these assets – including Russian central bank assets and related
holdings – to an intermediary arrangement such as a central bank
escrow account or trust.
34. The aim is to hold these assets in a temporary arrangement
until an international compensation fund, established in accordance
with international agreements and mechanisms, is ready to receive
and distribute them. An international compensation fund would be
responsible for managing and disbursing the assets in accordance
with international resolutions and agreements, particularly those
outlined in the above-mentioned UNGA resolution.
35. The establishment of an international compensation fund is
not a prerequisite for individual States to initiate the process
of identifying and transferring frozen Russian assets. States are
encouraged to take the initial steps by relocating these assets
to an escrow account within their jurisdictions, preparing for their subsequent
transfer to the international compensation fund once it is established.
This approach would allow for a co-ordinated and progressive handling
of frozen Russian assets, ensuring their secure and organised transfer
in line with international resolutions and agreements, even before
the establishment of a formal international compensation fund. This
method would provide a systematic and controlled means of managing these
assets while awaiting the creation of the international compensation
fund for their ultimate disposition and distribution.
36. The execution of such actions demands compliance with international
legal standards. It is crucial to ensure that the process adheres
to the principles of proportionality and fairness, protecting the
rights of innocent parties while holding the responsible State accountable
for its actions. Potential legal challenges from the Russian State
are to be expected, but the validity of such challenges and their
outcome would be determined by the specifics of international law,
case law, and the evidence presented. The ultimate goal of such
actions is to achieve justice and reparations for the damage caused
by breaches of international law.
3.3. The
compensation mechanism
37. It is crucial for the international
community, working in concert, to address this challenge and ensure
that the victims of the aggression, in this case, Ukraine and its
citizens, receive the reparations they are owed, and that there
is a path towards resolution and justice. As already called by the
Assembly in its Resolution 2516 (2023) “Ensuring a just peace in
Ukraine and lasting security in Europe”, this shall involve establishing
“a comprehensive compensation mechanism, including an international
commission for the examination of claims for the damages recorded
in the Register of Damage, and a compensation fund to pay out on
decisions on compensation for damage awarded by the commission,
in particular by confiscating and otherwise using the Russian Federation’s
assets to pay for war damages in Ukraine”. This will allow a way
to use these assets as a means of coercing the aggressor State to
comply with its international legal obligations.
38. The immobilisation or utilisation of Russian Central Bank
reserves, which have been frozen in the West, is considered a significant
countermeasure. As argued by experts like Lawrence H. Summers, Philip
D. Zelikow, and Robert B. Zoellick, under international law, the
Russian Federation is not entitled to compensation if the countermeasure
is proportionate and a response to its own grave breach of peremptory
norms of international law, an infringement that has been affirmed
by both the International Court of Justice and the United Nations.
39. The consistent stance of European Council’s President Ursula
von der Leyen on holding the Russian Federation accountable with
its sovereign assets further underscores the growing support for
leveraging countermeasures to address breaches of international
law.
40. The Council of Europe can play a role in hosting such an initiative,
while working towards lasting peace and stability as well as sharing
best practices and providing support in developing and strengthening democratic
institutions in affected countries. This will ensure that the reconstruction
funds will be used properly and that they will contribute to rebuilding
a democratic Ukraine.
3.4. From
sanctions to countermeasures
41. The concept of countermeasures
in international law refers to actions taken by one State against
another in response to the latter's internationally unlawful conduct.
Countermeasures are intended to induce the offending State to cease
its unlawful behaviour or to comply with its obligations arising
from that conduct, such as paying compensation for damages caused.
42. The freezing of assets as part of sanctions was a measure
used by countries to exert pressure on the Russian Federation immediately
after the February 2022 invasion. However, there comes a point where
it is essential to address the issue of compensation and reparations,
especially when the freezing of assets is not sufficient to deter
the aggressor State.
43. Implementing lawful State countermeasures, such as suspending
ordinary obligations towards Russian State accounts, is a step that
can be taken by countries opposing the Russian Federation’s aggression.
This approach involves reconsidering the treatment of these accounts
or assets in response to the Russian Federation’s actions, but it
is important to conduct these actions within the boundaries of legality
and international law. The focus should be on distinguishing between
private property and assets directly owned or controlled by the
Russian State. When implementing such countermeasures, the primary
objective is not to profit from these actions but to direct the
frozen or withheld assets towards aiding the victims of the Russian Federation's
aggression.
44. Countermeasures are typically not compulsory and are often
taken outside the UN Security Council and UN Charter Chapter 7 processes,
which are used for mandates and peacekeeping operations. Instead, countermeasures
are typically measures taken by States in response to unlawful actions
by other States as a way to encourage compliance with international
law and obligations. In this case, the UN's recognition of the Russian
Federation's serious breach of international law and the resulting
injury to States, as well as of the duty of the Russian Federation
to compensate those States, provides a legal and moral basis for
member States to take action. This acknowledgment by the UN establishes
that the Russian Federation's actions are a matter of common international
concern and justifies States' pursuit of countermeasures within
the framework of international law.
45. As explained by the International Court of Justice in the
Gabčíkovo-Nagymaros Project case,
countermeasures
“taken in response to a previous international wrongful act of another
State and [...] directed against that State” might justify otherwise
unlawful conduct. This is also reflected in Article 22 of the International
Law Commission (ILC) Articles on the Responsibility of States for
Internationally Wrongful Acts (ARSIWA), which stipulates that “the
wrongfulness of an act of a State not in conformity with an international obligation
towards another State is precluded if and to the extent that the
act constitutes a countermeasure taken against the latter State”
.
46. Key conditions associated with lawful countermeasures include:
1) response to unlawful conduct which means that countermeasures
must be a response to the offending State's unlawful behaviour;
2) objective of procuring compliance, meaning that they should aim
to encourage the offending State to stop its unlawful conduct or
fulfil its obligations, such as providing compensation; 3) proportionality,
meaning that countermeasures should be proportionate to the gravity
of the unlawful conduct and the injury caused by it; 4) temporary
nature, meaning that they should only persist until the offending
State complies with its obligations or ceases the unlawful conduct;
and 5) reversibility, meaning that once compliance is achieved,
normal legal relations should be restored, and the countermeasures
should cease.
47. The authority to employ countermeasures lies with individual
sovereign States. States intending to take countermeasures must
ensure that their actions align with the outlined conditions and
should ideally be taken with the aim of encouraging compliance rather
than inflicting punishment. Additionally, engaging in discussions,
negotiations, or seeking mediation to resolve disputes before resorting
to countermeasures is often encouraged to mitigate tensions and
promote peaceful resolutions.
48. Article 49 of ARSIWA outlines the framework for the use of
countermeasures in response to an internationally wrongful act by
a State: “1) An injured State may only take countermeasures against
a State which is responsible for an internationally wrongful act,
in order to induce that State to comply with its obligations under
part two [of the articles]; 2) Countermeasures are restricted to
the non performance for the time being of international obligations
of the State taking the measures towards the responsible State;
and 3) Countermeasures shall as far as possible be taken in such
a way as to permit the resumption of performance of the obligations
in question.
49. Article 51 of the ARSIWA, entitled “Proportionality”, adds
a condition regarding the utilisation of countermeasures: “Countermeasures
must be commensurate with the injury suffered, taking into account
the gravity of the internationally wrongful act and the rights in
question”.
50. Considering all four article 49 and article 50’s conditions,
the initial requirement outlined in paragraph 1 of Article 49 under
ARSIWA mandates that “an injured State may only take countermeasures
against a State which is responsible for an internationally wrongful
act, in order to induce that State to comply with its obligations
under part two of the articles”. These obligations encompass responsibilities
such as discontinuing any ongoing wrongful behaviour and providing
compensation for an internationally wrongful act.
51. So, if a State commits a wrongdoing by not stopping its wrongful
actions or fully compensating for the harm caused, the affected
State can take measures to convince the wrongdoer to follow the
duties of stopping the actions and making amends. In this scenario,
if States transfer assets to an international compensation mechanism,
it could prompt the Russian Federation to fulfil its duty of fully
compensating Ukraine. This action could also serve as a motivation
for the Russian Federation to stop its wrongful behaviour and align
with the fundamental norms it is disregarding. Based on these reasons,
transferring assets would be considered a legal countermeasure,
as it would be seen as a means to enforce compliance with the responsible
State's obligations outlined in Part Two of ARSIWA.
52. Article 49's second requirement states that countermeasures
must be temporary. They can only pause the obligations of the injured
State towards the offending State for a limited time, preventing
the wrongful act from being considered improper during that period.
While no specific duration is mentioned, it is assumed that the
measure would be legal as long as the wrongful behaviour persists,
but not beyond that. This aligns with Article 49's third requirement
in paragraph 3, ensuring that the countermeasure allows both the
offending and injured States to eventually fulfil their mutual obligations
again. This requirement says that countermeasures must be reversible,
allowing “the resumption of performance of the obligations in question”.
According to the International Court of Justice in the Gabčíkovo-Nagymaros
Project case, countermeasures should aim to prompt the wrongdoing
State to comply with international law. This requirement is not
about setting strict time limits but ensuring that a State can go
back to fulfilling its duties once the unlawful behaviour stops
and the countermeasures end, as clarified by the ILC.
53. In other words, Article 49’s three requirements make it clear
that countermeasures are meant to encourage the offending State
to fulfil its legal duties, leading to the restoration of normal
legal relations between parties. These proposed countermeasures
would essentially put certain international obligations on hold,
like respecting each other's financial assets or agreements for
instance.
54. The concept of self-help in international law and in countermeasures
revolves on unilateral action taken by a State alone, or in conjunction
with other States while seeking protection or performance of international legal
rights and obligations. The countermeasures are adopted as a consequence
of the view of the reacting State that the target State has committed
an internationally wrongful act. In other words, institutional sanctions create
“vertical” relationships of enforcement, whereas in the case of
decentralised countermeasures the relationships between the responsible
and reacting State are “horizontal”. In this case a group of like-minded States
could choose to join in taking the countermeasures against the target
State. In this context, compulsory mandates from international organisations
are unnecessary and superfluous.
55. Under Article 54 of ARSIWA, the responsibility of a State
for its internationally wrongful conduct may be invoked either by
an “injured State” or, in certain circumstances, by other States
which are not directly injured by that conduct: “This chapter does
not prejudice the right of any State, entitled under article 48,
paragraph 1, to invoke the responsibility of another State, to take
lawful measures against that State to ensure cessation of the breach
and reparation in the interest of the injured State or of the beneficiaries
of the obligation breached.”
56. The concept of erga omnes obligations
in international law refers to obligations owed by a State to the international
community as a whole, rather than to specific States. These obligations
are considered fundamental principles of international law that
transcend specific agreements between States and are binding on
all States. Erga omnes obligations
include duties such as prohibitions against genocide, slavery, aggression,
and certain human rights protections. Violations of erga omnes obligations can affect
all States and individuals and give rise to rights for any State
or entity to demand cessation of the unlawful conduct and seek reparations
for the injuries caused. Regarding third-party States not directly
affected by the Russian Federation's unlawful acts, there is a recognition
that they too have a stake in demanding compliance with erga omnes obligations.
57. The ILC acknowledges the potential for third-party States
to take countermeasures to address breaches of
erga omnes obligations. Article
54 of ARSIWA provides a saving clause that does not restrict the
right of any State to invoke Article 48
dealing with countermeasures and
take action against an offending State to ensure cessation of the
breach and reparation in the interest of the injured State or the
beneficiaries of the breached obligation. Thus, it effects all States,
not only the direct victim of the aggression.
58. This recognition and reservation of the right to take countermeasures
by third-party States in the interest of upholding erga omnes obligations reflect the
evolving nature of international law. They acknowledge the potential
customary norm that might develop allowing such actions by States
not directly affected by a breach but concerned about the broader
implications of a violation of erga omnes obligations.
59. The rule against aggression is an absolute norm of international
law that applies to everyone, not just the country directly attacked.
If there is a war of aggression, any State, or a group of States,
can hold the aggressor accountable and seek justice.
60. Furthermore, Article 48 of ARSIWA acknowledges that third-party
countries have the right to hold a wrongdoing State accountable,
as follows:
1. Any State other
than an injured State is entitled to invoke the responsibility of
another State in accordance with paragraph 2 if: (a) the obligation
breached is owed to a group of States including that State, and
is established for the protection of a collective interest of the
group; or (b) the obligation breached is owed to the international
community as a whole.
2. Any State entitled to invoke responsibility under paragraph
1 may claim from the responsible State (1) can demand from the responsible
State: (a) cessation of the internationally wrongful act, and assurances and
guarantees of non-repetition in accordance with article 30; and
(b) performance of the obligation of reparation in accordance with
the preceding articles, in the interest of the injured State or
of the beneficiaries of the obligation breached.
61. The use of such countermeasures is a way for States to leverage
their collective standing and the duty of the breaching State to
provide compensation for the injuries caused. It is important to
ensure that these actions are consistent with international law,
proportionate, and respectful of the rights of innocent parties,
and that they aim to encourage compliance with international obligations
and the principles of justice.
62. The suggested countermeasure, transferring frozen Russian
assets to an international compensation mechanism for disbursing
compensation to Ukraine or other affected parties, meets the reversibility
condition according to the ILC's understanding. This action would
restore the previous legal relations between the parties involved.
The ILC emphasises avoiding countermeasures causing “irreparable
damage” and suggests choosing measures allowing the resumption of
suspended obligations.
For
instance, when transferring frozen assets, States could agree that
these assets return if the Russian Federation complies with its
duties. Alternatively, rules for the compensation mechanism might
credit the Russian Federation for paid reparations, reducing its
remaining obligation. If the assets' value exceeds owed reparations,
the excess could be returned. This way, the transfer would not harm
the Russian Federation irreversibly.
63. States have already reacted against such breaches as referred
to in article 48 of ARSIWA without claiming to be individually injured,
including by imposing economic sanctions.
Such an example is the USA – Uganda
case in 1978 when the US Congress imposed restrictions on exports
of goods and technology to and from Uganda. It specifically highlighted
the accusation that the Government of Uganda, under the leadership
of Idi Amin at the time, had committed genocide against Ugandans.
The rationale behind this legislation was to condemn and dissociate
the United States from any foreign government engaged in the international
crime of genocide.
64. After Iraq’s 1990 invasion of Kuwait, States adopted countermeasures
after sanctions failed. France, the United Kingdom, and the United
States led the way in transferring frozen Iraqi State funds to an
international escrow account to provide compensation without Iraq’s
voluntary consent. Subsequently, the UN Compensation Commission
processed claims and paid compensation for loss and damage caused
by the invasion to the victims, partially from frozen assets.
Similarly,
the Russian Federation would be induced to do its duty and compensate
its victims, either voluntarily or involuntarily. The aggressor’s
rights do not take precedence over the rights of its victims.
65. In the late 1990s, in response to the escalating crisis and
the deteriorating humanitarian crisis in Kosovo*
the
member States of the European Community took collective measures
including adopting legislation that froze Yugoslav funds and imposed
an immediate flight ban. These measures eventually contributed to
the increased international attention on the situation in Kosovo
and paved the way for further diplomatic initiatives and interventions
in the region.
66. Concerning the use of countermeasures by third-party States,
there has been significant evolution in State practice since 2001.
This development solidifies the significance of Article 48 as a
recognised representation of present-day international law. The
instances of their implementation have increased substantially.
Acknowledging this trend, the Institut de Droit International passed
a Resolution on “Obligations
erga omnes in
international law” in 2005, which included the following provision
(Article 5): “Should a widely acknowledged grave breach of an
erga omnes obligation occur, all
the States to which the obligation is owed: (a) shall endeavour
to bring the breach to an end through lawful means in accordance
with the Charter of the United Nations; (b) shall not recognize
as lawful a situation created by the breach; and (c) are entitled
to take non-forcible countermeasures under conditions analogous
to those applying to a State specially affected by the breach.”
67. The precedent set since the Iraq-Kuwait conflict demonstrates
that compensation can extend beyond the direct parties involved
in a conflict to encompass other affected countries, international
organisations, and individuals or entities that have suffered losses
due to the aggression. Although Kuwait or Kuwaitis received about
80% of the awards of the compensation, more than ten other countries
and international organisations also received awards for damages
they suffered during the conflict, such as environmental damages.
These claimants included Saudi Arabia, Iran, and Israel.
68. In the case of the conflict in Ukraine and the Russian Federation's
actions, there are various dimensions to consider when seeking compensation.
Beyond the direct impact on Ukraine and its citizens, there are
ripple effects that affect neighbouring countries, companies, investors,
and displaced persons. These parties may have legitimate claims
for compensation under international law due to the damages incurred
as a result of the conflict.
69. Over the last twenty years, measures such as freezing an offending
State's assets and implementing economic sanctions have been frequently
utilised. These measures have often been employed by States not directly
affected as a response to breaches by the offending State of obligations
owed to the international community at large. Examples include:
1) In 2011, Switzerland and the US froze assets of Colonel Gaddafi
and the Libyan Central Bank; 2) In March 2011, European Union member
States imposed measures by freezing the assets of President Al-Asad
and the Central Bank of Syria. Today there are 83 States and international organisations
which have welcomed these sanctions adopted by the European Union;
3) In March 2014, EU member States, Australia, Canada, Japan, Lichtenstein,
Switzerland and the US imposed measures against the Russian Federation
for its destabilising role in Ukraine; 4) Since the invasion of
Ukraine, EU member States and 14 other States plus Taiwan have adopted
a wide range of measures against the Russian Federation, including
assets freezes, economic and financial sanctions, property seizures;
5) The EU and other States have adopted measures against Myanmar
in 2000, Zimbabwe in 2002 and Belarus in 2004.
70. It is important to note that the measures taken would have
been deemed unlawful if they were enacted without the presence of
internationally wrongful conduct by the targeted State. Under ARSIWA,
their wrongful nature was only prevented by their implementation
as countermeasures in response to the targeted State's wrongful
conduct. Thus, the measures adopted by States not directly affected
were considered justified as legitimate countermeasures according
to Part 2, Chapter II of ARSIWA.
71. Therefore, countermeasures should serve as an instrumental
purpose rather than being punitive. As per the law on countermeasures,
certain measures that would typically be unlawful can be justified
if specific conditions are fulfilled. These conditions include:
(a) being a response to a State's unlawful behaviour, (b) aiming
to stop this behaviour or ensure compensation for it, (c) being
proportionate to the seriousness of the wrongdoing and resulting
harm, (d) only being in effect until compliance is achieved, and
(e) allowing for a return to normal relations once compliance occurs.
Each State using countermeasures must ensure these conditions are
met. The decision to take countermeasures is within the authority
of individual sovereign States, making it a decentralised and voluntary
obligation.
72. Moreover, to meet the proportionality condition in Article
51, the countermeasures must align with the severity of harm to
the injured State and the seriousness of the offending State's wrongful
behaviour. Additionally, to fulfil Article 53, these countermeasures
should be ended promptly once the offending State starts following
its international duties again.
73. Regarding their legality, there exists no significant distinction
between freezing another State’s assets and transferring them to
the victim of the wrongful conduct as compensation for the harm
suffered. While transferring assets goes further than freezing them,
both actions would be considered lawful if executed in response
to a breach of obligations under an internationally recognised norm
of international law. These actions would aim to prompt the cessation
of wrongful behaviour or the reparation for the harm inflicted on
the affected State.
74. Thus, creating a fund or mechanism to address all the diverse
claims could indeed provide a structured way to assess and compensate
for the damages suffered by various stakeholders because of the
Russian Federation’s illegal invasion of Ukraine. This fund could
potentially cover a range of losses, including but not limited to
infrastructure damage, environmental impacts, economic losses incurred
by companies and investors, and the costs associated with hosting
and supporting displaced persons. However, the establishment and
administration of such a fund would require careful deliberation,
international co-operation, and adherence to legal principles to
ensure fairness and accountability in addressing the multifaceted
damages caused by the conflict.
75. The already established Register of Damage will undertake
the laborious process of recording Ukrainian losses in preparation
for an international claims process – for instance, through an international
compensation fund and international commission for the examination
of claims for the damages recorded in the Register. But a long,
drawn-out claims process alone cannot rapidly address the broad
disruption of Ukraine’s economy and society. Through countermeasures,
countries that have frozen Russian assets can flexibly fashion massive programs
of reconstruction and recovery while also funding a process to compensate
other injured States and claimants.
76. The legitimacy of the suggested countermeasures remains unassailable
even within the framework of sovereign immunity. Sovereign immunity
operates as a principle preventing one State's domestic courts from adjudicating
on the governmental actions of another State or seizing that State's
assets. The countermeasures discussed would not be subject to judicial
imposition. Instead, they would be strictly executed by the executive arm
of government, established through legislation or cabinet resolutions
within parliamentary systems.
77. While Article 52 of ARSIWA outlines the prerequisites for
an “injured State” to initiate countermeasures, those same conditions
would similarly apply to other States contemplating such actions.
Therefore, before a State can impose countermeasures against the
Russian Federation for its internationally wrongful aggression against
Ukraine, that State must have requested the Russian Federation to
fulfil its international legal obligations. This entails ceasing
the aggression, withdrawing forces from Ukrainian territory, and
compensating Ukraine and other affected parties for damages resulting
from the wrongful conduct. Additionally, the State must notify the
Russian Federation of its intention to initiate countermeasures
and extend an offer for negotiation to address the fulfilment of
obligations. It could be argued that these requirements have been
met through the adoption of UNGA resolutions, given their content
and supporting statements. However, satisfying these prerequisites
independently would not pose significant challenges.
3.5. United
front against aggression
78. Utilising frozen or seized
assets as a means of funding a recovery program for Ukraine would
serve as both a warning and a strategic move with broader implications.
Such an action would showcase the significant repercussions of violating
global norms and engaging in wars of aggression. It would serve
as a reminder of the interconnectedness of the world and the collective
responsibility to uphold international law and prevent such actions
from going unchecked.
79. Moreover, the creation of a European recovery program centred
on Ukraine, funded by Russian assets, presents a multifaceted approach.
Not only would it provide a means to facilitate Ukraine's recovery
and restoration after the conflict, but it would also serve to counter
Moscow's strategy of attrition and ruin.
80. By using the assets left in the hands of free countries, this
approach would turn a mistake on the Russian Federation's part into
an opportunity for the international community to create a positive
impact. It would not only address the immediate needs of recovery
but would also signify a stance against aggression and a commitment
to upholding global norms, showcasing the potential of collective
action for positive change.
4. The
European and global institutional landscape
4.1. European
Union
81. The co-operation between the
Council of Europe and the European Union is marked by a complementary
relationship aimed at promoting and upholding shared values, particularly
in the areas of democracy, human rights, and the rule of law. This
partnership ensures a more unified and comprehensive approach to
upholding democratic principles and human rights within our region.
82. The Council of Europe has developed numerous conventions and
legal instruments focusing on human rights, rule of law, and democracy.
The European Union often aligns its legislation and policies with
these standards, and in some cases, accession to the Council of
Europe's conventions is a condition for EU membership. The new geopolitical
context makes it even more necessary for the Council of Europe and
the European Union to deepen their partnership.
4.2. The
G7
83. The G7 leaders have strongly
condemned the Russian Federation’s actions, labelling the attack
on Ukraine as an unprovoked and unjustified assault.
This condemnation
is based on the premise that the Russian Federation's actions violate
several international agreements and commitments, including: 1) international
law: the attack is seen as a serious violation of international
law and a breach of the United Nations Charter, which emphasises
the respect for the sovereignty and territorial integrity of all
member States; 2) the Helsinki Final Act and the Charter of Paris:
the Russian Federation's actions are regarded as transgressions against
the principles outlined therein, both of which stress the importance
of respecting the sovereignty and borders of European States; 3)
the Budapest Memorandum: signed in 1994, it assured Ukraine's territorial integrity
and security in exchange for giving up its nuclear arsenal. The
G7 leaders view the Russian Federation's actions as a direct breach
of this agreement.
84. The strong language used by the G7 leaders emphasises the
gravity of the Russian Federation’s actions, highlighting their
belief that these actions constitute a violation of various international
agreements and principles that are fundamental to global peace and
stability. This condemnation serves to underscore their consensus
against such breaches of international law and commitments.
85. The subject of countermeasures was deliberated upon in December
2023 by both G7 finance ministers and their deputies. The United
States has put forward a proposal for working groups within the
G7 to investigate methods to access approximately US$300 billion
in frozen Russian assets.
This initiative is part of the collective
efforts by allied nations to finalise a plan in time for the second
anniversary of Moscow's large-scale invasion of Ukraine. Specifically,
the US, supported by the UK, Japan, and Canada, has suggested advancing the
preparatory work to ensure that potential strategies are prepared
for a potential gathering of G7 leaders around 24 February, coinciding
with the 2022 illegal invasion of Ukraine.
4.3. United
Nations
86. The relationship between the
UN and the Council of Europe is marked by a recognition of their
respective strengths and expertise. While the Council focuses regionally
on Europe, it contributes significantly to global discussions on
human rights and legal standards. This partnership enables a cross-pollination
of ideas and standards, contributing to a more unified approach
in advancing common values and principles on a global scale.
87. The adoption of
Resolution
A/RES/ES-11/1 on “Aggression against Ukraine” by the UNGA on 2 March 2022
represents a significant global criticism of the Russian Federation's
actions against Ukraine. This resolution strongly condemns the aggression
by the Russian Federation, specifically noting that the actions violate
Article 2(4) of the UN Charter, which prohibits the use of force
against the territorial integrity or political independence of any
State.
88. The resolution emphasises the demand for the immediate cessation
of the use of force by the Russian Federation against Ukraine. It
further calls for the complete and unconditional withdrawal of all
Russian military forces from the territory of Ukraine within its
internationally recognised borders.
89. In addition to this, the UNGA endorsed the creation of an
international mechanism for compensating Ukraine for loss, damage
and injury suffered during the war. Resolution A/RES/ES-11/5 recommends
“the creation […] of an international register of damage to serve
as a record […] of evidence and claims information on damage, loss
or injury to all natural and legal persons concerned, as well as
the State of Ukraine, caused by internationally wrongful acts of
the Russian Federation in or against Ukraine”. Subsequently, the
Council of Europe has established a Register of Damage caused by
the Aggression of the Russian Federation Against Ukraine.
5. Way
forward
90. The Council of Europe, as the
oldest European institution, has to lead this process and set an
example. With its focus on democracy, human rights, and the rule
of law, the Council of Europe should play a significant role in
supporting the reconstruction efforts in Ukraine, through the seizure
of Russian State assets.
91. The volatile global and regional security setting calls for
a renewed commitment to common values among all member States, particularly
in addressing critical issues like the reconstruction of Ukraine
in the aftermath of conflict.
92. The seizure of Russian State assets and the establishment
of a comprehensive compensation mechanism require a unified and
concerted effort within the framework of international law, and
the Council of Europe should serve as a platform for member States
to discuss and co-ordinate actions regarding these assets. The Organisation's
commitment to upholding shared values will provide a basis for collective
action in support of Ukraine's reconstruction.
93. In the pursuit of supporting Ukraine's reconstruction, it
is crucial that any proposed action is in accordance with international
law and aligns with the values and principles upheld by the Council
of Europe. This approach ensures a responsible and lawful engagement
in addressing regional security challenges.
94. While witnessing a crucial moment in the 21st century
and maintaining and strengthening our unity against this aggression,
we should be steady in our objective to fortify Ukraine so that
the consequences – including those of financial nature – of the
Russian Federation’s aggression serve as deterrence against any other
future aggression.