Leading up to the fourth anniversary of Russia’s full-scale invasion of Ukraine, Part I of this post reviewed what law and lawyers have contributed so far toward the goal of a just and lawful peace in Ukraine. In Part II, we explain why, despite claimed legal obstacles and a Russian lawsuit, no barrier exists to freeing billions of euros in Russian frozen assets being held in Europe for use toward Ukrainian damages and reconstruction.
Soon after Russia’s February 2022 full-scale invasion of Ukraine, European Union (EU) directives authorized the freezing of territorial assets of the Central Bank of Russia (CBR or Bank). Currently, the Belgium-based depositary Euroclear Bank SA/NV, holds at least €185 (~$217 billion) in immobilized Russian state funds and securities, with some additional €25 billion held by a variety of private European banks.
As discussed in Part I, directing the frozen assets into negotiated investment funds for Ukraine would fit neatly into Points 8 and 9 of President Zelenskyy’s current 20-point peace proposal, which reserves Ukraine’s right to seek compensation for war damage and calls for “[a] strong global development package for Ukraine, … including but not limited to . . . [t]he establishment of [both] a Ukraine Development Fund to invest in high-growth sectors” and “a capital and grants fund with a target size of $200 billion for transparent and effective investment in Ukraine.”
Yet despite protracted public debate (including here, here, here, here, here, here, here, here, here, and here), NATO allies have hesitated to confiscate frozen Russian assets, apparently troubled by the notion that such a step would pose a “legal problem.” In this post, we explain why European politicians have confused a question of legal risk with one of political will.
Background
Four long years of Russian aggression and atrocities have killed between 100,000 and 140,000 Ukrainian troops and displaced as many as 10 million Ukrainians. 2025 was the deadliest year for Ukrainian civilians, with the United Nations reporting 2,514 civilian fatalities. By one estimate, destroyed civilian property and infrastructure will cost an estimated $524 billion to reconstruct. Russia has destroyed much of Ukraine’s energy, commercial, and public infrastructure, and has also been implicated in the destruction of the Kakhovka Dam (although, unsurprisingly, Russia has disputed its involvement).
Simple justice should demand that Russia, not Ukraine, bear the costs of its unprovoked war. Although Russia’s economy is floundering, its gross illegality has impoverished Ukraine, and imposed huge costs on their neighbors and allies. As others have observed (here and here), Putin’s invasion gamble has succeeded mainly in running his own economy into the ground, tapping out Russia’s military capabilities, while making marginal territorial gains. At this writing, either Russian victory or defeat remain possible. Given this reality, logically, coalition partners should push harder to end Putin’s ongoing illegal aggression and atrocities by liquidating Russia’s frozen sovereign assets and transferring them to Ukraine to compensate its inhabitants for their grievous losses. Nearly two years ago, one of us explained why there are no legal obstacles to accessing these frozen assets as a lawful countermeasure to induce the end of ongoing Russian aggression:
“[S]hort-term lifting of sovereign immunity on Russian assets within several jurisdictions should not trigger a flight from any reserve currency if all states holding frozen assets collectively start liquidating together. Nor would collective liquidation of Russian frozen assets license developed nations to play by a different set of rules. Instead, it would simply ensure that all nations adhere to primary obligations of international law and hold themselves to the same principled limits on the use of countermeasures.”
Soon thereafter, the U.S. Congress enacted the bipartisan REPO Act, which granted the president express, limited, time-bound authority to “confiscate” Russian government assets located in U.S. financial institutions and transfer them to a parallel Ukraine Support Fund. The expectation at the time was that European states holding frozen assets would join in, starting by using frozen assets as collateral to generate funds to support Ukraine, pending resolution of the conflict.
Instead, renewed claims of legal obstacles have stalled those European loans. In December 2025, European leaders debated a plan that would have allowed them to use about €210 billion in Russian government assets frozen in Europe—mainly at Euroclear—to back a 2-year loan of €90 billion (~$105 billion) per year to Ukraine, to be repaid only if Russia paid reparations. In the same month, Russia’s Central Bank filed suit in Moscow City Arbitration Court accusing Euroclear of “unlawful activities” by denying Russia access to its assets in gold, securities, and foreign exchange reserves. In an effort to intimidate European countries, the CBR claimed that Euroclear has taken prejudicial actions affecting the CBR’s ability to dispose of its assets. Seeking $229 billion in damages (more than the amount currently held at Euroclear), the CBR challenged all “direct or indirect” EU actions regarding the frozen assets, including making loans based on the frozen assets. CBR acknowledged that it was acting because the EU was “considering proposals for direct or indirect use of Bank of Russia assets without authorization,” committing what Putin called the “theft of sovereign assets.”
Although Russia’s statement of the claim in the Moscow court was accepted by Judge Anna Nikolaevna Petrukhina in December and initial hearings occurred during mid-January 2026, records of the proceedings are not publicly available. News reports suggest that Russia is claiming that the European actions violate the Belgium-Luxembourg-Russian Federation Bilateral Investment Treaty (BIT), either in the Moscow case or elsewhere.
Two legal opinions, one by the Covington & Burling law firm and another by a group of international legal experts, cogently explained why Euroclear faces minimal or nonexistent legal risk from lending Ukraine money with interest drawn from the frozen Russian assets. Nevertheless, Russia’s legal intimidation seems to have partly succeeded. Belgian Prime Minister Bart De Wever called the risk that his country could be found liable to Moscow for using the assets as loan collateral “real.” De Wever also warned that any EU plan must take into account the financial risks arising from the bilateral investment treaty between Belgium-Luxembourg and Russia. Apparently fearing being on the hook for legal awards arising from the use of Russia’s assets at Euroclear, Belgium asked other European countries to share in the risk by providing guarantees backing any loan and insisted that smaller pots of money held in France, the UK, and elsewhere also be used in the plan. The controversy undermined the efforts of European leaders to agree on their first-choice option: using European-based frozen Russian state assets as collateral for the Ukraine loan. As the political debate stalemated, those same leaders finally agreed—subject to clearing last-minute objection from Hungary—to keep Ukraine funded for two more years with a loan of €90 billion, or about $105 billion, backed not by frozen Russian assets, but by the EU’s budget.
This post details why Russia’s legal claims and De Wever’s concerns about legal risk to Belgium and the EU are baseless. Not only should the Russian suit in Moscow not be justiciable, it should have little or no chance of success on the merits in any fair judicial proceeding. If the Russian court nevertheless proceeds to judgment, any award rendered there would be unenforceable elsewhere. Nor does Belgium risk meaningful liability under the BIT, where once again, Russia has no legitimate case on jurisdiction, admissibility, the merits, or enforceability. In any litigation forum, the strongest merits claims would be counterclaims by the EU or Belgium, or claims brought against Russia before various international tribunals by Ukraine itself. Should any of those claims ripen into a final judgment for damages, the most logical lawful fund for enforcement of an international tribunal judgment would be the frozen Russian assets.
The Moscow Arbitration Court Suit
The Russian lawsuit suffers from at least five fatal defects. Because Russian courts are notoriously subject to Putin’s influence it is foreseeable that the Moscow Arbitration Court will rule in favor of Russia. But these five defects would render any judgment that might be rendered there unenforceable elsewhere.
1. Jurisdiction
First, the Moscow Arbitration Court lacks jurisdiction, because it is an illegitimate forum under the BIT. Based on its public declarations, Russia appears to be seeking compensation against Euroclear, Belgium, and/or the EU in the Moscow case or elsewhere for: (1) freezing its assets in violation of law; (2) using those frozen assets as the basis for a loan; and/or (3) expropriating its sovereign assets in violation of the BIT or customary international law. But under any of these theories, Russia’s chances of success are minimal, both on preliminary issues and on the merits.
To begin with, Russia ignored proper BIT procedures by suing in a domestic court. The BIT directs states parties to first attempt to settle the dispute “through diplomatic channels” (Art. 9(1)). If diplomatic efforts fail, a joint commission consisting of representatives of the contracting parties shall meet at the request of either party to attempt to resolve the dispute (Art. 9(2)). If after six months of negotiations the joint commission fails, only then shall the dispute be submitted to an arbitral tribunal at the request of either contracting party (Art. 9(3)). The treaty also prescribes the contours of any such arbitral tribunal, including that each contracting party is to appoint an arbitrator and follow a delineated process to appoint an arbitrator from a third state (Art. 9(4)). To our knowledge, Russia took none of these steps, instead going directly to its own domestic court.
Although states may be parties to the BIT, the BIT is primarily designed to protect investors from state action. It provides two distinct mechanisms for dispute resolution: one for treaty interpretation and implementation consultations between the contracting parties (e.g., Art. 11), and another for investor-state disputes (e.g., Art. 10). BITs thus provide protections to state entities only when they act in a commercial capacity (see, e.g., Beijing Urban Construction Group v. Yemen, where the International Centre for Settlement of Investment Disputes (ICSID) held that it had jurisdiction over the dispute, in part because a Chinese state-owned enterprise acting as a commercial contractor and not discharging governmental functions, qualified as a foreign investor.). Thus, a panel under the BIT would lack jurisdiction to hear a claim under the agreement by CBR. CBR is a state entity, not a commercial investor, and is operating in a sovereign capacity, not a commercial one.
Alternatively, respondents could move to dismiss the case under the doctrine of forum non conveniens, because the Moscow Tribunal is an illegitimate forum to adjudicate disputes under the BIT and, contractually, under Euroclear-CBR agreements. The Euroclear-CBR contract contains a standard dispute-resolution clause stating that any arbitration shall be held before ad hoc arbitration conducted under the rules of the UN Commission on International Trade Law (UNCITRAL) or the Stockholm Chamber of Commerce Arbitration Institute. The standard Euroclear security agreement (example here) chooses the domestic courts of Belgium as the selected forum. Thus, CBR would have no basis to bring a case involving the BIT to a Russian court like the Moscow Arbitration Court By filing in its Moscow court, CBR thus may have breached its contractual commitments, rendering any Moscow court proceeding vulnerable to an anti-suit or anti-enforcement injunction issued by another domestic court, perhaps one in Belgium.
For completeness, neither the International Court of Justice (ICJ) nor the European Court of Human Rights (ECtHR) would have jurisdiction over a claim brought by Russia on the theory that confiscating the frozen assets—or extending a loan using the cash balances generated by those assets—would constitute a violation of its sovereign immunity. The ICJ’s contentious jurisdiction depends on the consent of disputing states, which may be expressed through several distinct mechanisms, none of which are likely to be applicable here. The UN Convention on Jurisdictional Immunities of States provides for ICJ dispute resolution only after exhaustion of other remedies, which has not occurred here. Moreover, Russia has signed but not ratified the Convention, which in any case has not entered into force because it has not obtained the 30 State ratifications required by Article 30.
Nor can the ECtHR exercise jurisdiction over a challenge brought by Russia. Russia ceased to be a member of the Council of Europe in March 2022 and the ECtHR in September 2022. Even if the Court had jurisdiction, pending and completed ECtHR cases against Russia for human rights violations committed during its invasion of Ukraine make that court an unattractive tribunal for the Russia to pursue its claims. Depending on the facts, as elaborated below, EU members, NATO members, Belgium, or Ukraine could all mount substantial counterclaims by intervention based on Russia’s manifest gross violations of human rights (enumerated in Part I of this post).
2. Admissibility
Second, even if Russia could establish jurisdiction, it would face major obstacles based on admissibility, as articulated by the ICJ in Oil Platforms (Iran v. United States) (2003). These would include: Russia’s lack of legal standing to bring a claim against Euroclear, as described above; failure to adhere to mandatory procedural preconditions to arbitration; and inadmissibility under the “unclean hands” doctrine, (although the ICJ recently limited that doctrine to the most exceptional cases in a Ukraine-Russia ICJ case).
3. The Merits
Third, even if Russia could surmount these initial obstacles, it has a losing case on the merits. In the last four years, multiple United Nations General Assembly (UNGA) Resolutions with overwhelming majority votes—which are widely considered international “soft law”—have condemned Russian aggression (here, here, and here). In particular, a November 2022 UNGA resolution demanded that Russia “must be held to account” for its gross violations of international law in or against Ukraine, including making “reparation for the injury, including any damage, caused by such acts.” The G7 leaders resolved to “explore all possible avenues to aid Ukraine in obtaining compensation from Russia, consistent with our respective legal systems and international law,” and specified that Russia must cover Ukraine’s damages before it may recover any leftover assets.
While the complaint and details are not public, the CBR claims that Euroclear has taken prejudicial action causing losses by preventing disposal or use of its frozen assets. To be sure, the EU Charter of Fundamental Rights establishes that interference of a fundamental right recognized by the Charter (including the rights held by those subject to sanctions) “must be provided for by law and respect the essence of those rights” (Art. 52(1)). Such limitation must also be necessary, proportionate, and meet “objectives of general interest recognised by the [European] Union or the need to protect the rights and freedom of others” (Art. 52(1)). In the Rosneft Sanctions Case (Luxembourg) 2017, the Court of Justice of the European Union (CJEU) upheld the legality of sanctions imposed by the EU against Russian corporations, including Rosneft, over Russian activities in Eastern Ukraine. The Court rejected Rosneft’s claim that the European sanctions were “disproportionate with respect to the objective pursued by those acts and interfere with Rosneft’s freedom to conduct business and right to property . . . ” (¶ 35, 143-151). Instead, the Court concluded that because Rosneft’s rights were not absolute, “interference with Rosneft’s freedom to conduct a business and its right to property cannot be considered to be disproportionate” (¶ 150) (emphasis added). Subsequent legislative measures in several EU countries have harmonized the EU’s restrictive measures against Russia with domestic criminal confiscation rules. This coordination enables intra-EU cooperation in confiscating private assets to redress Russia’s war of aggression and atrocity.
Most fundamentally, the freezing and transfer of CBR assets is authorized by the international law doctrine of countermeasures. As explained in an earlier post, countermeasures constitute temporary, proportionate, and reversible actions that would otherwise be illegal, but become legal when they are taken to induce compliance by another party that has violated international law. The law of countermeasures has been recognized by the International Court of Justice, and the International Law Commission (the body of independent experts responsible for codifying rules of international law). Law-abiding countries have regularly relied on this doctrine to induce compliance with the rules of aviation, trade, and security. The Kremlin has not repudiated this body of international law; to the contrary, Russia has claimed reliance on the countermeasures doctrine when it issued illegal retaliatory counter-sanctions on the private property of “unfriendly” investors in Russia.
Collective countermeasures are particularly suitable when exercised by “specially affected countries”—which refers to states whose interests, rights, or territory are particularly or uniquely affected by a specific situation, a proposed treaty, or a developing rule of customary international law—or in response to a nation’s violations of erga omnes obligations (legal obligations that are owed to all others. As described in Part I, Russia has committed such violations by contravening its international legal obligations to abstain from aggression, war crimes, and failure to pay reparations. Russia’s unlawful invasion of Ukraine baldly violated Article 2(4) of the UN Charter and after four years, constitutes the most egregious campaign of aggression and atrocity in seventy-five years.
Under such circumstances, the International Law Commission’s (ILC’s) Articles on the Responsibility of States for Internationally Wrongful Acts (Articles 36, 42, 48-49, 50, 52) authorize affected states to take “such urgent countermeasures as are necessary to preserve its rights” to pressure Russia to cease its ongoing violations. Those actions have uniquely impacted not just Ukraine, but EU and NATO members and the United States as well. Collective third-party countermeasures by some or all of those nations to compel reparations, such as through joint freezing of assets, are a lawful response to such an exceptional threat to international peace and security. Lawful countermeasures would include third parties’ “non-performance for the time being of international obligations” normally owed to Russia (see Art. 49), so long as those states give notice insisting that Russia perform its recognized legal obligations, offer to negotiate Russian compliance, and continue complying themselves with all other applicable obligations under international law.
The ILC’s Articles thus authorize the temporary, proportionate, and reversible lifting of the sovereign immunity traditionally accorded to Russian central bank assets to induce it to end its ongoing violations of international law. Coalition partners effectively recognized this four years ago, when they refused to acknowledge any legal constraint against imposing a worldwide freeze on Russian central bank assets.
International law does not mandate that protection of absolute sovereign immunity be given to aggressor nations who show their contempt for sovereignty through invasion. Foreign sovereign immunity was not designed to license Putin to violate Ukraine’s sovereignty with aggression, war crimes, and mass murder, then turn around and invoke Russia’s “absolute” legal protections as a sovereign actor. Historical precedent shows that any sovereign immunity constraint on national judicial action would not bar multilateral executive action to deny central bank immunity as a lawful collective countermeasure. Executive re-designation of those who may control central bank assets does not violate sovereign immunity. For example, when Iraq invaded Kuwait in 1990, America and European countries placed Iraqi state assets into a compensation commission fund to recompense Iraq’s victims for loss and damage caused by Iraq’s unlawful invasion.
Nor, having waged a blatantly illegal war, can Russia now hide behind the claim that its central bank assets should enjoy sovereign immunity from the reach of domestic courts. For that reason, ILC Article 50 pointedly excluded sovereign immunity from the international law obligations that a lawful countermeasure “shall not affect,” because including it would constitute a “quasi-prohibition of countermeasures.” Instead, the ILC’s Articles place Russia “under an obligation to compensate for the damage caused [by its internationally wrongful acts]” (see Art. 36). Russia’s claims regarding sovereignty thus do not bind states holding frozen Russian assets, who may lawfully ignore these claims while seeking to hold Russia financially liable and deter other states from committing similar wrongful acts. Temporarily lifting the sovereign immunity of Russia’s frozen assets in these circumstances should not disrupt settled state expectations. Instead, such action would put other states on notice not to expect absolute immunity in domestic courts when those assets could be used to facilitate blatant war crimes and aggression.
Temporary and reversible abrogation of Russia’s sovereign immunity would constitute a proportionate response to Russia’s aggression and atrocity and failure to pay reparations for its illegal destruction. Article 51 of the U.N. Charter and customary international law both dictate that the wrongful act at issue (an unlawful armed attack on another sovereign state)—is so significant as to confer a right on third states to use force as a measure of collective self-defense. A fortiori, those states are permitted to exercise the lesser right of temporarily setting aside sovereign immunity to utilize frozen Russian assets.
ILC Article 49 establishes that countermeasures should be reversible, but only “as far as possible.” The commentary that accompanies the Articles acknowledges that “[it]t may not be possible in all cases to reverse all of the effects of countermeasures after the occasion for taking them has ceased.” This principle simply recognizes that many lawful countermeasures cannot be undone: e.g., reinstatement of air services that were temporarily suspended cannot restore the flights that were permanently canceled during the temporary suspension. Here, the reversible step would be suspending sovereign immunity, which could be reinstated once Russia ceases its internationally wrongful acts.
A reparations loan financed through the cash balances generated from the frozen CBR assets presents an even clearer case for a reversible, lawful countermeasure. A loan constitutes neither permanent seizure nor confiscation of Russia’s immobilized state assets. Borrowing the cash balances from the immobilized assets and lending them to Ukraine until Russia pays reparations neither diminishes nor confiscates the frozen asset. That asset retains the same cash value as a loan repayable if and when Russia paid back the proposed reparations loan.
Most fundamentally, countermeasures aim not to impose punishment or litigate past grievances, but to serve the goal of ending ongoing illegality. Ukraine’s compelling and exceptional circumstances justify piercing Russia’s veil of immunity, because Russia’s manifest ongoing contempt for foreign sovereignty has caused untold damage. Having exhausted over four years all other avenues to induce Russia to return to compliance, affected states now have little choice but to turn to an available countermeasure that would be both lawful and effective. Temporarily lifting sovereign immunity to leverage frozen assets could energize the current diplomatic moment by helping to force Russia to the bargaining table, and providing incentive to end its illegal actions.
4. Available Counterclaims
Fourth, the same facts would empower Belgium and the EU to assert counterclaims against a Russian suit, including: reparations for seizure of Western assets in Russia and occupied Ukraine, breach of contract with Euroclear based on the standard BIT forum-selection clause, and Russian violations of fundamental international law.
ILC Article 31 states that a “‘responsible State is under an obligation to make full reparation for the injury caused by the internationally wrongful act,” whereby injury includes “any damage, whether material or moral, caused by the internationally wrongful act.” In accordance with ILC Article 34,“full reparation for the injury caused by the internationally wrongful act shall take the form of restitution, compensation and satisfaction, either singly or in combination.” Thus, whether or not Ukraine ultimately wins a judgment from an international tribunal in one of its pending contentious cases (discussed further below), Russia’s aggression and atrocities in Ukraine create a separate and independent obligation to make reparation for Russia’s core violations of the U.N. Charter and other rules of international law. Russia’s independent legal duty to make reparation would provide grounds for any defendant in a suit brought by Russia asserting a counterclaim before any tribunal whose jurisdiction Russia might try to invoke.
5. Enforceability
Fifth and most crucially, any judgment that CBR might obtain against Euroclear in the Moscow court would be manifestly unenforceable in EU and other jurisdictions (e.g., the United States, UK, Canada, and others). U.S., UK and EU law all provide grounds for rejecting judgments or awards made by foreign arbitral tribunals if they conflict with fundamental public policy, which includes rewarding lawless invaders for their patently unlawful aggression and atrocity. Accordingly, these fora limit enforcement of judgments in contradiction of sanctions regimes, provide mechanisms to offset assets confiscated abroad, and would limit BIT enforcement under these circumstances. Article IV of the EU immobilization regulation specifically prohibits enforcement of any award or judgment related to the immobilization of CBR assets in EU courts. Article 11 of the EU’s 15th sanctions package, Regulation 833/2014, bars EU member courts from enforcing Russian courts’ judgments.
Russia’s Duty to Compensate
Finally, three international tribunals are approaching final judgment in cases brought by Ukraine that implicate Russia’s duty to compensate for international law violations. First, in the Coastal State Rights case, currently awaiting decision on the merits by the Permanent Court of Arbitration under Annex VII of the U.N. Convention on the Law of the Sea (UNCLOS), Ukraine has claimed that Russia has engaged in a systematic pattern of exclusion, exploitation, and usurpation by violating Ukraine’s UNCLOS rights in three vital waterways: the Black Sea, Sea of Azov, and the Kerch Strait. Second, Ukraine seeks compensation in Dispute Concerning the Detention of Ukrainian Naval Vessels and Servicemen before the International Tribunal on the Law of the Sea (Warships Case) (ITLOS), which was scheduled for a merits hearing in January 2026, that was then postponed. Third, the Ukraine-Russia Allegations of Genocide Case, filed at the ICJ shortly after the full-scale invasion, is also approaching the merits, regarding Russia’s use of false allegations of genocide as a pretext for the sustained use of armed force inside Ukraine.
Less than a month after the invasion, the ICJ overwhelmingly issued a binding provisional measures order in the Genocide Allegations case. The order directed Russia first, to “immediately suspend the military operations that it commenced on 24 February 2022 in the territory of Ukraine”; second, to “ensure that any military or irregular armed units which may be directed or supported by it, as well as any organizations and persons which may be subject to its control, direction, or influence, take no steps in furtherance of the military operations”; and third, to require Russia to “refrain from any action. . . which might aggravate or extend the dispute before the Court or make it more difficult to resolve.”
At the preliminary objections phase, in February 2024, the Court narrowed jurisdiction on the merits to focus on Ukraine’s actions in Donbas. But that decision did not lift these three provisional measures, which have stood for four years, and continue to impose binding obligations on Russia, which it has flagrantly ignored. As the Court explained in LaGrand (Germany v. United States) (2001), provisional measures orders issued pursuant to Article 41 of the Court’s Statute “have binding effect,” are “binding in character,” and “create[] a legal obligation” for the states involved. (¶¶ 109-10). The Court held in Certain Activities Carried Out by Nicaragua in the Border Area (Costa Rica v. Nicaragua)—a case where the challenged conduct also constituted a violation of territorial sovereignty—that a state’s obligation to comply with an ICJ provisional measures order is independent of any rights or duties the state may have with respect to the broader dispute within which the measures were indicated.(¶ 129). Having ignored this binding court order for four years, Russia owes full compensation to Ukraine for the consequences of that ongoing violation.
The famous Chorzow Factory Case of 1928 requires as compensation restitutio in integrum: i.e.,“reparation [that] must, as far as possible, wipe out all the consequences of the illegal act.” (p. 47) The ICJ confirmed a similar obligation to pay reparations in its judgment in Armed Activities on the Territory of the Congo (Democratic Republic of the Congo v. Uganda), and went on later to award monetary compensation. Thus, any claims of Ukraine in any pending case, and any counterclaims of Belgium, Euroclear or the EU in any litigation brought against them by Russia or the CBR would be fully enforceable against frozen Russian assets. Russia’s obligation to pay would apply both to final judgments and violations of provisional measures and could be executed against frozen Russian assets. If Russia refused to pay reparations, that would constitute yet another illegal act warranting more collective countermeasures directed against frozen Russian assets.
Conclusion
In sum, Russia’s baseless claims against Belgium, Euroclear, or the EU in the Moscow court or elsewhere raise no serious legal risk. Russia’s frozen assets may be tapped as collateral for loans, or to enforce final judgments of international tribunals that have issued final judgments or binding provisional measures orders. By starting to transfer funds to Ukraine, Russia would simply be making a down payment on a massive war reparations debt it would be legally obligated to pay anyway, at war’s end. As direct talks progress, no legal obstacle exists to transferring the frozen European assets—principal, interest, or as collateral for a loan—into the Ukraine reconstruction funds contemplated by Points 8 and 9 of the Zelenskyy peace plan to make Russia pay for Ukraine’s damages and reconstruction. The main obstacle is not legal, but political will.
Given the recent Ukraine loan controversy, why should the Europeans act now? First and most obviously, it would ease the burden on EU budgets from foreign aid or future loans. Second, Trump has repeatedly dangled the assets as part of any deal, but the Europeans control those assets, not the United States. Moving forward on the assets would help secure Europe’s place at the negotiating table. Third, European leaders have become more assertive after Trump’s Greenland debacle, which made them more aware that a bad deal engineered by Trump would expose more of Europe to Russia over the next few years; this awareness gives them even greater incentive to be at the table now, especially if Trump keeps pressing to close a deal before the 2026 U.S. mid-terms. Fourth, a serious peace effort would signal to Putin that protection of the assets will end, unless he starts to negotiate seriously. Given that the December European talks reportedly fell apart over the sufficiency of a proposed EU guarantee to Brussels against a Russian litigation loss, broader recognition that Russia has no prospect of litigation success could energize the Europeans to bring up the reparations loan option again. Fifth and finally, if the Russian assets were not made available for Ukrainian compensation, Ukraine would have little choice but to examine how to enforce any judgment in other ways, with less predictable results.
More broadly speaking, this two-part post illustrates how law and lawyers have worked—and should work in the future—to turn peace motivated by power into peace guided by law. The rules of international dispute-resolution can still help build a lawful core around which a stable and enduring diplomatic solution can be built in Ukraine. Such a solution would pursue not just peace, but a just and lawful peace that would speak law to violence, truth to atrocity, and restitution to brutality.
As the Ukraine saga continues to unfold, international lawyers must keep insisting that law be injected into diplomacy and accountability into power politics. By doing so—in Seamus Heaney’s words—law and lawyers can help make “[t]he longed-for tidal wave of justice … rise up, and hope and history rhyme.”
Authors’ note: Harold Hongju Koh is Sterling Professor of International Law and former Dean at Yale Law School, where he serves as co-director of the Peter Gruber Rule of Law Clinic, of which the other co-authors are members. He previously served as Legal Adviser (2009-13) and Senior Adviser (2021) at the Office of the Legal Adviser at the U.S. State Department, where he previously served as Assistant Secretary of State for Democracy, Human Rights and Labor (1998-2001). He currently advises Ukraine’s Ministry of Foreign Affairs on international law matters. This post reflects the views of him and his co-authors, and not necessarily those of any institution with which Professor Koh is now or has been affiliated.
