The case for action on frozen Russian state assets
This page examines the arguments — legal, financial, strategic, and institutional — for moving beyond immobilization to structured use of those assets for Ukraine's defense, recovery, and compensation.
The funding gap
Why interim measures are not sufficient
The G7's Extraordinary Revenue Acceleration (ERA) loan and windfall profits mechanisms represent meaningful steps towards using the assets, but neither addresses the underlying funding gap. Ukraine's recovery needs far exceed what these instruments can deliver.
- Ukraine's total damages since 2022 exceed $666 billion, with reconstruction needs estimated at $587 billion as of early 2025 (World Bank, Feb. 2025). Total losses since 2014 exceed $1 trillion.
- The ERA loan, backed by windfall profits from immobilized Russian assets, channeled $50 billion to Ukraine, and the EU provided a €90 billion interest-free loan. Both are projected to be exhausted by 2027, after which Ukraine will face renewed critical funding shortfalls.
- Current windfall profits mechanisms generate approximately €3 billion annually — insufficient to cover Ukraine's defense costs, let alone reconstruction or compensation.
- Neither mechanism addresses the principal of the frozen assets, which remains immobilized without a durable legal framework or designated purpose.
- The ERA loan and windfall profits mechanisms confirm the principle that RSA proceeds may serve Ukraine's needs. They do not resolve the question of the principal.
Strategic arguments
Security and deterrence rationale
Beyond the legal case, there are strong strategic considerations about the effects of action and inaction on European security, deterrence, and the international rules-based order.
Deterrence
The frozen assets are not meaningful leverage for negotiations
Russia has shown willingness to absorb substantial economic costs in pursuit of its war objectives. There is no evidence, across multiple rounds of negotiations over four years, that the frozen assets have functioned as an inducement toward settlement. Russia's priority is denying Ukraine access to these funds, not recovering them. The stronger deterrent signal is demonstrated willingness to convert RSA into concrete support.
Costs of inaction
Inaction is not a neutral position
Maintaining the current framework leaves Ukraine dependent on donor fatigue-prone voluntary contributions, shifts costs to taxpayers in holding jurisdictions, and signals that political hesitation can outlast accountability commitments. Delay also erodes the credibility of the collective immobilization regime itself.
European security
Support for Ukraine's recovery is a European security investment
Funds directed to Ukraine's defense support joint development with European industry. Recovery funding prevents prolonged instability and displacement — both of which carry long-term fiscal and political costs for European states. Reconstruction will generate significant economic opportunities for European firms across defense, energy, infrastructure, and finance.
Institutional risk
The current arrangement creates ongoing exposure for European institutions
Keeping vast sanctioned-state assets in European financial institutions exposes those institutions and host states to legal risk and ongoing Russian hybrid threats aimed at coercion.
Accountability and just peace
Material accountability for aggression is a necessary condition of durable peace — not a consequence of it.
A peace agreement that leaves Russia's reparations obligation unaddressed does not resolve the underlying breach of international law — it defers it. Under international law, reparation is not a condition Russia must accept as part of a negotiated settlement; it is an obligation that already exists, established by Russia's aggression.
A durable, just peace requires that:
- The aggressor, not its victims, bears the costs. Rebuilding Ukraine through donor contributions while Russia retains assets it is legally obligated to transfer shifts those costs onto Ukraine and its supporters.
- Accountability has material consequences. The international compensation architecture — including the International Claims Commission — was built to process and enforce exactly this obligation. Frozen Russian assets are its designated funding source.
- The framework is only meaningful if it is used. Holding assets in indefinite reserve while Ukraine's reconstruction needs compound does not fulfill the accountability commitment — it postpones it.
Path forward
A sequenced pathway
A structured approach would proceed in four stages, moving from the current dispersed-immobilization framework toward a purpose-built international mechanism. Broad jurisdictional participation — including the EU, UK, Switzerland, Canada, Japan, Australia, and the US — strengthens the collective-countermeasures rationale and reduces litigation risk for individual states.
1
Segregate and disclose
All relevant jurisdictions identify, disclose, and segregate Russian state assets into designated accounts. This reduces systemic risk and creates the operational foundation for subsequent steps without altering ownership of the funds.
2
Establish a protected international structure
Participating states establish a multinational trust or comparable mechanism with clear governance, professional asset management, and full transparency. This structure moves the assets beyond the reach of Russia's recovery demands even if individual sanctions regimes lapse, and enables active portfolio management rather than passive cash-holding.
3
Provide legal safeguards for holding jurisdictions
The framework includes full indemnification for Belgium and other holding states, a litigation reserve, and explicit legal firewalls for implementing institutions. Liability and operational burdens are shared collectively rather than concentrated in a single jurisdiction.
4
Transfer assets through the international compensation architecture
Participating states coordinate the gradual transfer of RSA into the structure, preserving servicing of existing ERA commitments. Assets are directed to Ukraine's defense, urgent recovery, reconstruction, and compensation through the International Claims Commission and related mechanisms.
Neither segregation nor transfer to a trust alters ownership of the funds and thus does not raise issues of seizure or confiscation under most legal frameworks. These steps implement — rather than extend — the existing countermeasure, by applying the assets to Russia's established reparations obligation.