European Union Support to Ukraine Through Windfall Profits: the Potential for Reparation

By Victoria Kerr 

REDRESS Consultant Legal Officer 

Around an estimated $300 billion worth of Russian Central Bank assets have been frozen by Western sanctions made in response to the full-scale invasion of Ukraine. In July of this year, the EU announced that it was using the “extraordinary revenues” gained from the Russian Central Bank assets frozen within EU Member States to send to Ukraine. So far, €1.5 billion has been sent to Ukraine, largely for defence purposes, with an estimated €3 billion expected per year moving forwards.  

While legislative proposals have been made to confiscate assets linked to the Russian state under international law, the EU argues that the windfall profits do not belong to Russia. Since the EU windfall profits measure likely therefore does not require a legal justification under international law, the EU has discretion over how it utilises the funds. The windfall profits measure forms part of a trend towards exploring alternative routes to securing funds generated from assets to support Ukraine. 

Although at face value the Ukraine Facility (one of the current destinations for the funds) appears promising, publicly available information suggests that it focuses on the recovery and reform of Ukraine as a state (with a view to EU accession). The positive impact on individual victims is challenging to measure. The blog post argues that the EU should take a more human-centred approach with the windfall profits to bring reparative value for victims who have suffered harm as a result of the conflict.  

REDRESS supports the view that humanitarian assistance, reconstruction and recovery for Ukraine must be considered hand in hand with reparation. Victims of human rights and international humanitarian law violations, including conflict-related sexual violence (CRSV), torture, forced transfer and disappearance, have a right to reparation and cannot wait until a peace agreement is reached or Russia’s agreement to compensate. Harms they have suffered including trauma, chronic injuries, and economic hardship, compounded by the destruction of homes and difficulty in accessing health and social care services, are not currently adequately and effectively addressed. Yet, pathways are already available to implement the delivery of reparation to victims. 

Windfall profits, and other funds generated from Russian frozen assets, used to finance these pathways, could make a profound impact on the lives of victims, restoring their dignity and allowing them to rebuild their lives. 

To read more on this, you can read this blog post published by the Lieber Institute at West Point’s Articles of War, where I analyse with T.M.C. Asser Instituut researcher James Patrick Sexton the EU’s recent decision to send profits from frozen Russian Central Bank assets to Ukraine.  

Photo: President of Ukraine