Jonathan Djanogly is Vice-Chair of Ukraine APPG, and is MP for Huntingdon. Roksolana Pidlasa MP is Chair of the Budget Committee of Ukraine’s Parliament.
With the turn of the year and Volodymyr Zelensky’s visit to western Europe, legislators are increasingly waking-up to the prospect of war continuing in Ukraine for the foreseeable future and the costs that this will incur. As are the people they represent.
The financial burden shouldered so far by allied nations to provide aid pales in comparison to the human sacrifices made by Ukrainians but, given that Western war-weariness remains one of Vladimir Putin’s last great hopes of success, it must not be overlooked or discounted.
The need to finance Ukraine’s defence remains as urgent and vital as ever, and ending or reducing support is not plausible.The fact that the UK remains one of the largest donors of military aid, behind the United States, should continue to be a point of national pride, and this is especially the case given the leading role the UK has played in sending increasingly technologically advanced and in-demand equipment such as Challenger 2 tanks.
Where the revenue comes from for this support is, however, a legitimate area in need of greater discussion. When the war ends, the World Bank estimates that at least $349 billion will be required for Ukraine’s material recovery, and this figure does not account for the social cost of the rebuilding of civil and education structures or devastated communities, nor the need to help families torn apart by war. The figure is also expected to keep growing as the war continues, including through a potential major Russian ‘Spring Offensive’ which reports suggest Putin has amassed up to 500,000 troops for.
Since the full-scale invasion last February, taxpayers’ money from across the West has been a lifeline for Ukraine but, moving forward, and especially when it comes to reconstruction, Russian sources of revenue must also be considered. Specifically funds frozen under sanctions need to be seized for reconstruction purposes – an idea mooted and supported by the UN General Assembly.
In June, our fellow Parliamentarians in Ottawa empowered the Canadian Government to seize any property, including money, funds, currency, digital assets and virtual assets, linked to sanctioned individuals. After a period in which the forfeiture decision can be contested, the net proceeds can then be paid out for a set number of good purposes, including to help rebuild a foreign state that has been adversely affected by a grave breach of international peace. After a delayed start, the first seizure process in Canada has now begun, focusing on one sanctioned individual and $26 million held by a company in their name.
In December, the US Senate also unanimously backed a plan to use certain confiscated Russian assets to Ukraine’s benefit. Passed as an amendment to Joe Biden’s federal spending bill, it means that, where criminality can be proven under US domestic law, the assets of sanctioned individuals can be seized and made subject to forfeiture.
Once forfeited, the authorities then have the discretionary power to repurpose the assets, including to be sent to Ukraine, and an example of this is already playing out following the seizure of a $300 million yacht in a joint operation between Fijian and US law enforcement last year. Whilst the amendment does not provide for wide-ranging, blanket and pre-emptive forfeiture of sanctioned individuals’ assets, and nor does it touch uponfrozen Russian State assets, it is nonetheless a step in the right direction.
Two laws have also been adopted in Ukraine allowing its government to seize Russian State assets and the property of people and entities financing Russian military aggression. This enabled the Ukrainian Parliament to nationalise two Russian-owned banks in May and confiscatethe property of oligarchs. Roughly $460 million has been transferred from banks to Ukraine’s state budget, and this money is set to be used for immediate reconstruction needs.
With over £18 billion of frozen individual and corporate Russian assets in the UK, not to mention those held by our other European, Asian and Indo-Pacific partners, and let alone very significant Russian State assets, an enormous sum of potential revenue is available for Ukraine’s reconstruction if there is the political will to follow in the footsteps of our North American allies.
In sheer quantity, these assets could constitute the lion’s share of future support, either in the form of a direct payment to Ukraine for reconstruction or as repayments to Western countries for armaments and relief provided to assist Ukrainians.
The UK should now proceed with appropriate legislation to change its freezing orders to seizing orders. The message to Russia, Putin and his supporters will be clear. Do not expect to be given any more free passes to invade and destroy neighbouring countries.
The cost of Russian intransigence must be paid for by Russians, not least because polling from within the country indicates strong and continued support of over 70 per cent for both the war and Putin. At some point, citizens and leaders need to take collective responsibility for the actions of the state and armed forces that operate in their name, and nor is it fair for the taxpayers of countries who respect human rights, the democratic process and international boundaries to shoulder the financial burden of reconstruction in its entirety.
Jonathan Djanogly is Vice-Chair of Ukraine APPG, and is MP for Huntingdon. Roksolana Pidlasa MP is Chair of the Budget Committee of Ukraine’s Parliament.
With the turn of the year and Volodymyr Zelensky’s visit to western Europe, legislators are increasingly waking-up to the prospect of war continuing in Ukraine for the foreseeable future and the costs that this will incur. As are the people they represent.
The financial burden shouldered so far by allied nations to provide aid pales in comparison to the human sacrifices made by Ukrainians but, given that Western war-weariness remains one of Vladimir Putin’s last great hopes of success, it must not be overlooked or discounted.
The need to finance Ukraine’s defence remains as urgent and vital as ever, and ending or reducing support is not plausible.The fact that the UK remains one of the largest donors of military aid, behind the United States, should continue to be a point of national pride, and this is especially the case given the leading role the UK has played in sending increasingly technologically advanced and in-demand equipment such as Challenger 2 tanks.
Where the revenue comes from for this support is, however, a legitimate area in need of greater discussion. When the war ends, the World Bank estimates that at least $349 billion will be required for Ukraine’s material recovery, and this figure does not account for the social cost of the rebuilding of civil and education structures or devastated communities, nor the need to help families torn apart by war. The figure is also expected to keep growing as the war continues, including through a potential major Russian ‘Spring Offensive’ which reports suggest Putin has amassed up to 500,000 troops for.
Since the full-scale invasion last February, taxpayers’ money from across the West has been a lifeline for Ukraine but, moving forward, and especially when it comes to reconstruction, Russian sources of revenue must also be considered. Specifically funds frozen under sanctions need to be seized for reconstruction purposes – an idea mooted and supported by the UN General Assembly.
In June, our fellow Parliamentarians in Ottawa empowered the Canadian Government to seize any property, including money, funds, currency, digital assets and virtual assets, linked to sanctioned individuals. After a period in which the forfeiture decision can be contested, the net proceeds can then be paid out for a set number of good purposes, including to help rebuild a foreign state that has been adversely affected by a grave breach of international peace. After a delayed start, the first seizure process in Canada has now begun, focusing on one sanctioned individual and $26 million held by a company in their name.
In December, the US Senate also unanimously backed a plan to use certain confiscated Russian assets to Ukraine’s benefit. Passed as an amendment to Joe Biden’s federal spending bill, it means that, where criminality can be proven under US domestic law, the assets of sanctioned individuals can be seized and made subject to forfeiture.
Once forfeited, the authorities then have the discretionary power to repurpose the assets, including to be sent to Ukraine, and an example of this is already playing out following the seizure of a $300 million yacht in a joint operation between Fijian and US law enforcement last year. Whilst the amendment does not provide for wide-ranging, blanket and pre-emptive forfeiture of sanctioned individuals’ assets, and nor does it touch uponfrozen Russian State assets, it is nonetheless a step in the right direction.
Two laws have also been adopted in Ukraine allowing its government to seize Russian State assets and the property of people and entities financing Russian military aggression. This enabled the Ukrainian Parliament to nationalise two Russian-owned banks in May and confiscatethe property of oligarchs. Roughly $460 million has been transferred from banks to Ukraine’s state budget, and this money is set to be used for immediate reconstruction needs.
With over £18 billion of frozen individual and corporate Russian assets in the UK, not to mention those held by our other European, Asian and Indo-Pacific partners, and let alone very significant Russian State assets, an enormous sum of potential revenue is available for Ukraine’s reconstruction if there is the political will to follow in the footsteps of our North American allies.
In sheer quantity, these assets could constitute the lion’s share of future support, either in the form of a direct payment to Ukraine for reconstruction or as repayments to Western countries for armaments and relief provided to assist Ukrainians.
The UK should now proceed with appropriate legislation to change its freezing orders to seizing orders. The message to Russia, Putin and his supporters will be clear. Do not expect to be given any more free passes to invade and destroy neighbouring countries.
The cost of Russian intransigence must be paid for by Russians, not least because polling from within the country indicates strong and continued support of over 70 per cent for both the war and Putin. At some point, citizens and leaders need to take collective responsibility for the actions of the state and armed forces that operate in their name, and nor is it fair for the taxpayers of countries who respect human rights, the democratic process and international boundaries to shoulder the financial burden of reconstruction in its entirety.