Putin’s Matryoshka: A War Reparations Facility for Rebuilding Ukraine
Lev E. Breydo*
This Article addresses a critical, trillion-dollar question: How do we hold Russia accountable for the reconstruction of Ukraine? The nation has been devastated by Russia’s brutal war of aggression, with tens of thousands killed, millions displaced and its economy in shambles. The enormity of the problem cannot be overstated. Existing proposals to support Ukraine, including many from prominent scholars, largely focus on seizing Russian assets, particularly central bank reserves “frozen” by sanctions. Such strategies, however, are legally problematic—likely well beyond the scope of Presidential authority—and financially insufficient. Moreover, while prospective new legislation could expand presidential powers, it risks new challenges, including significant constitutional considerations and potential violations of international law—risking adverse implications for U.S. foreign policy, as well as the efficacy of global financial infrastructure.
To square this most critical circle, this Article proposes establishing a war reparations facility for Ukraine, modeled on the United Nations Compensation Commission, which paid over $52 billion to 1.5 million victims of Iraq’s unlawful 1990 invasion of Kuwait, funded by a levy on Iraqi oil sales. The proposal offers numerous advantages, including bypassing legal issues associated with seizing Russian reserves and—most critically—facilitating direct compensation to individual war victims, similarly funded through a Russian oil sales levy. Though hardly uncomplicated, Russian participation can be incentivized through economic leverage. Due to sanctions, Russian oil trades at a discount, totaling tens of billions annually. As detailed in the Article, that delta can be transposed to fund a reparations facility for Ukraine, in effect collateralized by $325 billion of Russia’s “frozen” reserves.
* Visiting Assistant Professor, Villanova University Charles Widger School of Law. J.D., cum laude, University of Pennsylvania Law School, 2015 (Articles Editor, University of Pennsylvania Law Review); M.B.A. (Finance), The Wharton School, 2015. For helpful comments and discussions, the author would like to thank Brett M. Frischmann, Walter John Taggart, Todd Aagaard, and members of the International Claims and Reparations Project at Columbia Law School, as well as participants at the Columbia Law School Friedmann Conference and the University of Detroit-Mercy Law Review Symposium. The author would also like to thank the staff of the Columbia Journal of Transnational Law for their exceptional efforts. All errors are my own.
As this Article (which was largely written in mid-2022) goes to print in mid-2023, Russia’s invasion of Ukraine remains ongoing, with the situation fluid and outcome uncertain. Correspondingly, the legal, policy, and legislative dimensions regarding the conflict, including reparations for Ukraine, remain subject to active debate across the United States, Europe, and other jurisdictions.
While the Article tries to clearly delineate any associated points of uncertainty, readers should bear in mind that, unless indicated otherwise, the information, data, and figures provided herein are accurate as of approximately late 2022. Certain discussion may be impacted by subsequent developments or new information not available at the time of writing and publication.