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Ukrainian Reparation Loan: How it Would Work
Ukraine has an indubitable claim under international law for the damages caused by Russia’s unprovoked of Ukraine. For its part, Russia has legal title to approximately $300 billion of assets (held in the name of the Russian Central Bank and the Russian Federation) that have been frozen by the G7 countries since 2022. The problem is that the country (Ukraine) to which reparations are owed does not have custody of the frozen assets and the countries (the G7) that do have custody of the frozen assets do not have a claim for reparations against Russia. Were Ukraine itself to be holding the Russian assets it would have every moral and legal right to set off a portion of its claim for reparations against those Russian assets. This paper proposes a transaction structure by which a portion of Ukraine’s claim against Russia for war damages can be lodged with the G7 countries that are in a position, legally and practically, to settle that debt from the proceeds of the frozen Russian assets. Such a “syndicated reparation loan” could provide Ukraine with sufficient cash to fund and defend itself against Russia for several years.