PACE Says Frozen Russian Assets Should Be Used to Compensate Ukraine

The Parliamentary Assembly of the Council of Europe’s (PACE) Legal Affairs Committee has approved a mechanism that could use frozen Russian Central Bank assets to pay compensation awarded to Ukraine under Strasbourg Court rulings. The committee said repurposing Russian state assets for such payments would constitute a “lawful countermeasure under international law,” strengthening efforts to make Moscow financially accountable for abuses committed during its war against Ukraine.JOIN US ON TELEGRAMFollow our coverage of the war on the @Kyivpost_official. The draft resolution and recommendation, based on a report by British parliamentarian Tony Vaughan, are due to go before the full Parliamentary Assembly in Strasbourg on Sept. 30. From frozen profits to Russia’s money itself The proposal matters because it goes further than the approach Europe has largely taken so far. Around €210 billion ($244 billion) in Russian Central Bank assets remain immobilized in the EU. Current EU policy principally uses extraordinary revenues generated by those assets to support Ukraine rather than confiscating the underlying Russian funds themselves. Euroclear, the Brussels-based clearing house where most of the assets are concentrated, reported that €202 billion of its balance sheet was linked to sanctioned Russian assets at the end of June. It has already transferred billions of euros in windfall proceeds to the EU for Ukraine. PACE’s approach would open a route to the principal itself. Other Topics of Interest Kyiv Under Air Alert for Over 6 Hours as Russian Attack Kills 1, Injures 16 A drone hit residential buildings in the Dniprovskyi and Darnytskyi districts, damaging homes, a kindergarten, 35 vehicles, and warehouses. Under the proposed mechanism, frozen Russian state assets could be transferred into a funding structure established under the Council of Europe and then used to satisfy compensation awarded to Ukraine by the European Court of Human Rights (ECHR). That distinction is significant: rather than Ukraine receiving only income earned on Moscow’s frozen reserves, Russian state money itself could ultimately be applied against Russia’s legal obligations. Strasbourg rulings create a judicial route The proposal builds on major ECHR judgments establishing Russian responsibility for widespread human rights violations connected to its aggression against Ukraine. In Ukraine v. Russia (re Crimea), the Court ruled on violations resulting from Russia’s occupation of Crimea. In a separate 2025 judgment in Ukraine and the Netherlands v. Russia, the Grand Chamber held Moscow responsible for widespread abuses linked to the conflict in eastern Ukraine and Russia’s full-scale invasion. The Court also found Russia responsible for the downing of Malaysia Airlines Flight MH17. The amount Russia must pay Ukraine in “just satisfaction” has not yet been determined. PACE’s committee warned that, given the unprecedented scale of destruction, future awards could amount to billions, tens of billions or potentially hundreds of billions of euros. Russia was expelled from the Council of Europe in March 2022 and ceased to be a party to the European Convention on Human Rights six months later. But it remains legally responsible for violations committed while the Convention still applied. The committee stressed that Moscow’s obligation to comply with those judgments does not disappear with time and cannot simply be overridden by Russian domestic law. What it actually means The committee decision does not automatically confiscate €210 billion ($244 billion) in Russian reserves. PACE is part of the Council of Europe, not the European Union, and cannot order EU governments or Euroclear to transfer the assets. Instead, the proposal seeks to provide a legal framework that governments could use to justify doing so. PACE has argued that Russia’s serious breaches of international law permit other states to take countermeasures aimed at forcing Moscow to comply with its obligations, including its duty to make reparations. Previous Assembly resolutions have said such countermeasures can be designed in a way that remains compatible with sovereign immunity, with seized funds ultimately offset against compensation Russia owes Ukraine. The latest proposal applies that reasoning directly to judgments from the Strasbourg Court and urges governments to create domestic legal procedures capable of enforcing them. That could turn what has largely been a political debate over Russian assets into a question of enforcing binding court awards. Why Moscow worries For Moscow, the danger is not only losing the income generated by its frozen reserves. It is the possibility that countries begin treating the underlying Central Bank assets as money available to satisfy Russia’s debts to Ukraine. That could establish a broader path for turning immobilized Russian sovereign reserves into compensation rather than preserving them indefinitely as frozen property or potential leverage in future negotiations. Some European governments have remained cautious about confiscation because of legal and financial risks, and because the frozen assets could potentially play a role in a future settlement with Moscow. Russia has already fought aggressively against even the existing freeze. The Russian Central Bank has described European attempts to seize or use its assets as illegal and has pursued claims against Euroclear. In July, a Moscow court rejected Euroclear’s appeal against an order requiring the Belgian clearing house to pay the Russian Central Bank 18.2 trillion rubles – roughly $233 billion – over the immobilized assets. Euroclear rejects the Russian court’s jurisdiction and says the ruling has no legal effect in the EU. The dispute illustrates what is at stake: moving from freezing Russian reserves to actually spending the principal would transform an asset Moscow could hope eventually to recover into money used to pay for damage caused by its war. A second track for Russian accountability The committee also proposed that Council of Europe states make it easier for successful ECHR applicants to pursue compensation through national courts when Russia refuses to pay. It additionally called for a public list of individuals implicated in large-scale human rights violations established by ECHR judgments, with the information shared with governments, the EU and the International Criminal Court to assist possible sanctions or prosecutions. PACE’s statement said that, if adopted by the full Assembly on Sept. 30, the measure would open another legal and political path to using frozen Russian assets to compensate Ukraine. Sevinj Osmanqizi is an experienced journalist who writes extensively for Kyiv Post on foreign policy, international security and geopolitics. Based in Washington, D.C., her work focuses on Ukraine, Russia’s war and the broader post-Soviet space.