Making Putin Pay for Ukraine's Defense
How the US and its allies could force Russia to finance Ukraine’s defense and reconstruction
Russia is spending an estimated $1.3 billion each week to conquer Ukraine. In Ukraine’s draft 2024 budget, more than half of all government spending is earmarked for defense. Yet amid rising costs, Ukraine’s GDP contracted by 29 percent in 2022. Even if the war stopped today, the estimated cost of rebuilding Ukraine would be over $400 billion. To successfully win this war and rebuild, Ukraine needs money—a lot of it.
Western financial aid has been indispensable, but Ukraine can’t count on it to continue at its current level. According to a CNN poll from August, a majority of Americans oppose sending additional funding to support Ukraine. If Trump were to return to the White House in 2025, it seems all but guaranteed that American support for Ukraine would be slashed. The potential for European governments to fill the gap if American support recedes is low.
Since it is Russia that imposed this cost on Ukraine, it seems only right that it should be Russia that eventually covers it. Last year a vote before the UN on Russia owing reparations to Ukraine won 94 countries’ support. Speaking before the Hague earlier this month, Ukrainian official Anton Korynevych said that “Russia must make reparations.” Without a major breakthrough, though, it’s difficult to imagine how Russian reparations could be filling Ukrainian coffers anytime soon.
Yet the barriers to a transfer of Russian assets to Ukraine aren’t primarily financial: Russia has more than enough money. Nor is it a problem of access to these funds: some $300 billion in Russian central bank assets are currently frozen in democratic countries. The main sticking point is simply a legal one: do these countries have the right to transfer assets from a Russian account to a Ukrainian one?
The answer is yes—without a doubt. President Biden could transfer frozen Russian central bank assets to Ukraine in full accordance with US and international law. The only thing stopping the transfer now is political will.
That is the key conclusion of a report RDI commissioned with constitutional law expert Laurence Tribe and his colleagues at the law firm Kaplan Hecker & Fink LLP. Over nearly 200 pages, the report establishes the firm legal foundation for the transfer of Russian frozen assets and challenges concerns about a slippery slope to normalizing asset seizures like these. While only $38 billion of the $300 billion in Russian central bank assets are held under American jurisdiction, the report establishes that similar policies could be pursued by our allies.
Biden Has the Power
The president’s authority to seize Russia assets under these circumstances is rooted in the International Emergency Economic Powers Act of 1977. It requires that the president declare a national emergency regarding an “unusual and extraordinary threat… to the national security, foreign policy, or economy of the United States,” which he has already done. The president is then granted the power to “direct and compel” an asset transfer like this one, which fits neatly with how the law has been employed in the past.
Tribe and his colleagues also break down why the Fifth Amendment right against private property seizure does not protect Russian state interests, and neither does sovereign immunity. Put plainly, they conclude that “the Constitution would not prohibit the transfer of Russian assets.”
The Moral Imperative
Some skeptics worry that the US transferring assets like these might degrade international law and norms. The report considers the dilemma differently:
“Russia’s unlawful war of aggression on Ukraine constitutes an extraordinary rupture in the international order that demands an equally extraordinary response. While constraints of domestic and international law would not prohibit intervention in these rare circumstances, they do serve as meaningful sources of constraints on the United States and other nations in situations that do not come close to the kind of international emergency that Russia has inflamed. Put simply: transferring Russia’s assets to Ukraine would not open the floodgates to similar maneuvers by bad-faith actors in the future.”
Under these circumstances, our greatest obligation isn’t to uphold hazy norms regarding foreign property rights during war, but to disincentivize and punish illegal wars of conquest.
“All countries holding Russian assets have an obligation to impose real, material consequences on Russia in the form of an asset transfer. This move is appropriate on many fronts: (1) transferring Russia’s assets to Ukraine will strengthen the international norm against aggression and discourage countries from violating that norm in the future; (2) the failure to act sends a dangerous message to the rest of the world that aggression, war crimes, and genocide will go unpunished; and (3) it would be a cruel irony to deny Ukraine the funds it needs by invoking respect for Russia’s “sovereignty” and “property rights” when Russia has chosen to trample on the sovereignty and property rights of the Ukrainian people.”
As for concerns about a flight from the dollar as the reserve currency of the world, the report stresses the already severe action the US has taken against Russia without forfeiting the dollar’s status. Better yet, if we act in coordination with our European allies, the fallout on American interests could be minimized.
Armed with the robust legal foundation established in the report, the Biden administration and our allies abroad have the opportunity to make Russia pay for the war in Ukraine. As a matter of justice, Russia deserves to pay. As a matter of practicality, there is no substitute for the hundreds of billions of dollars this transfer could unlock. With this opportunity in front of us, we have an obligation to follow through.
“Inaction in these circumstances would be nothing short of appeasement,” the report continues. “It would serve to embolden Russia and send the dangerous signal that the United States and its allies lack the political and moral will to take all necessary steps to stop President Putin and his military from murdering civilians and flouting the basic rules of the international order.”
The civilized world is slow to realize that it found itself again under a frontal assault by a wily dictator, who is both smarter and more powerful than Hitler and Stalin have ever been. Unlike them, he can destroy the human civilization as we know it what makes him hypothetically both untouchable and invincible. Hypothetically, because the price he would have to pay for it would be his own life and mafia bosses like Putin do not believe into dying for whatever cause - such outcome is for suckers. Consequently his dream of governing the world is not realizable either, making this war a stalemate until he dies of more, or less natural causes. However, without American help he will overcome Ukraine and then take the Baltic States, three small NATO countries connected to Europe only via the narrow Suvalki gap. Then our boys will have to engage in Europe in person to fight and probably die there in droves as twice before. Thus the cost of inaction today will become exorbitant tomorrow, especially if invigorated China attacks Taiwan in coordination with Putin. Today, it would be easy to use the frozen Russian money to effectively finance the Ukrainian resistance against Russians. Tomorrow, such sums will seem like pennies compared to what will be needed.
man I wish I could live in the illusion this guy lives in. I have never heard of a country that won a total victory having yo pay war reparations.