Jonathan Zanogli and Roksolana Pidlasa: Paying Putin

Jonathan Zanogly is Vice-Chair of the Ukraine APPG, and MP for Huntingdon. Roksolana Pidlasa MP is the Chairman of the Budget Committee of the Parliament of Ukraine.

turn of the year and Volodymyr Zelensky’s tour of Western Europe, lawmakers are increasingly waking up to the prospect of a continuation of the war in Ukraine and the costs it will bear. Whom they represent.

The financial burden so far shouldered by allies to provide aid outweighs the human sacrifices made by Ukrainians but, as Western war-weary Vladimir Putin remains one of the last great hopes for success, it should not be ignored or discounted.

The need to fund Ukraine’s defense remains as urgent and vital as ever, and ending or reducing support is not justified. The fact that the UK remains one of the largest donors of military aid, behind the US, should be a moot point. National pride, and in particular the leading role the UK has played in sending increasingly technologically advanced and in-demand equipment such as the Challenger 2 tank.

Where the revenue for this support comes from, however, is a valid area requiring greater discussion. When the war ends, the World Bank estimates that Ukraine will need at least $349 billion for material recovery, and this figure does not account for the social costs of rebuilding civil and educational infrastructure or devastated communities, or the need to help families. That number is also expected to rise as the fighting continues, including a potentially major Russian ‘spring offensive’ punctuated by the war, with Putin reportedly amassing 500,000 troops.

Since the full-scale invasion last February, taxpayer money across the West has been a lifeline for Ukraine but, going forward, and especially when it comes to reconstruction, Russia’s sources of revenue must also be considered. Specifically, funds deposited under sanctions need to be confiscated for reconstruction purposes – an idea raised and supported by the UN General Assembly.

In June, our co-parliamentarians in Ottawa empowered the Canadian government to seize any assets, including money, funds, currencies, digital assets and virtual assets, that are linked to authorized individuals. After a period in which the confiscation decision can be contested, the net proceeds can be paid to a certain number of good purposes, including assisting in the reconstruction of a foreign state that has been adversely affected by a serious breach of international peace. After a delayed start, the first seizure process in Canada has now begun, focusing on $26 million held by an authorized individual and a company in their name.

In December, the US Senate also unanimously backed a plan to use some of Russia’s confiscated assets to benefit Ukraine. Passed as an amendment to Joe Biden’s federal spending bill, it means that, where a crime can be proven under US domestic law, the assets of authorized individuals can be seized and confiscated.

Once seized, authorities have discretion to recover assets, including those sent to Ukraine, and an example of this is already being seen after a joint operation between Fijian and US law enforcement seized a $300 million yacht. Although the amendment does not provide for broad, blanket and advance confiscation of the assets of sanctioned individuals, nor does it touch on frozen Russian state assets, it is nevertheless a step in the right direction.

Ukraine has also adopted two laws allowing its government to seize Russian state assets and the assets of individuals and organizations financing Russian military aggression. It enabled Ukraine’s parliament in May to nationalize two Russian-owned banks and confiscate the oligarchs’ assets. About $460 million has been transferred from the bank to the state budget of Ukraine, and this money will be used for immediate reconstruction needs.

With £18 billion of private and corporate Russian assets frozen in the UK, not to mention assets held by our other European, Asian and Indo-Pacific partners, and very important Russian state assets, there is huge potential revenue. If we have the political will to follow in the footsteps of our North American allies for the reconstruction of Ukraine.

In sheer volume, these resources could constitute the bulk of future aid, either in the form of direct payments to Ukraine for reconstruction or as repayments to Western countries for arms and relief provided to help Ukrainians.

The UK should now enact appropriate legislation to change its freezing order to confiscate orders. The message to Russia, Putin and his supporters, will be clear. Don’t expect any more free passes to invade and destroy neighboring countries.

Russians must pay a price for Russia’s sabotage, not least as polls from within the country indicate strong and continued support of more than 70 percent for both the war and Putin. At some point, citizens and leaders must take collective responsibility for the actions of states and armed forces that operate in their name, and this is not fair to taxpayers in countries that respect human rights, democratic processes and international borders. The financial burden of completely restructuring.