16
Examination of witnesses
Markiyan Kliuchkovskyi, Maria Tymofiienko and Tetyana Nesterchuk.
Q1 The Chair: Welcome, everyone, and thank you for very much indeed for coming together to discuss the Ukrainian claims commission. This is a public evidence session, and we are extremely grateful that we have three contributors today: Markiyan Kliuchkovskyi, the executive director of the register of damage, which is the precursor to the claims commission—we look forward to hearing more details about how that will function; Maria Tymofiienko, who is head of projects for the Ukraine international law response at the British Institute of International and Comparative Law; and Tetyana Nesterchuk, who is a barrister at Fountain Court Chambers and has worked on this issue for a number of years. We are very grateful to you three for coming to contribute to this.
We are also grateful to the Government for giving us a slight extension of the CRaG process, which will allow us to give this some proper scrutiny. We are able to hold two, maybe even three, evidence sessions over the next few weeks, so I hope that we can produce a powerful and useful scrutiny report on the back of that.
I normally ask the first question, but I am quite keen to ask a question a bit later, given some of the developments that have taken place over the last few days. We will start with Baroness Lawlor, if she can ask her question first, then I will come in towards the end.
Baroness Lawlor: What is the scope of the claims commission? In particular, who has standing to bring a claim before the commission, what types of loss are within scope, and when and where must these losses have been suffered?
Markiyan Kliuchkovskyi: Thank you very much for the opportunity to speak to the committee and give evidence on this important matter. As far as the claims commission is concerned, in accordance with the convention that was signed in December in The Hague, the commission will in many respects follow the approaches and guidelines that have been established thus far in the register of damage, because it is meant not only to succeed but to continue the work of the register of damage.
The types of claimants who can submit claims can broadly be grouped in three ways: claims by individuals, claims by legal entities—businesses, essentially—and claims by the state of Ukraine in the broad sense of its Government, governmental authorities, enterprises, communities, local authorities and so on.
The variety of claims is quite broad. The convention on the claims commission does not stipulate the exact list of categories, but the register does. There are 43 distinct categories, which are again broken down along the same lines as the three groups of claimants. They cover various kinds of pecuniary and non-pecuniary damage, and everything from loss of life, missing persons, injuries, consequences of torture and sexual violence, deportation of children and adults, displacement, loss of residential and non-residential property, loss of enterprise, loss of gainful employment, loss of education and similar things.
When it comes to legal entities, they are predominantly asset-focused, with more of an economic, business angle on the consequences of the war, including the loss of access to assets that remain in the territories that are currently under temporary occupation and traditional categories of claims, such as loss of cultural and historic heritage, as well as damage to the environment.
In our work, the register has tried specifically to reference every category of damage that is compensable under international law, to eliminate all the gaps that could exist. As I mentioned, the claims commission will have to make its own decision on which categories to pursue, but every indication is that it will be along the guidelines, if not exactly continuing the approach, adopted by the register.
Baroness Blower: I have a slight point of clarification. A trade union is not a legal entity, but it has another incorporated position within this. In your view, might a trade union that has lost a significant amount of property and suffered other kinds of damage be an entity with standing in this?
Markiyan Kliuchkovskyi: Certainly. A legal entity as a concept, especially in the Ukrainian context, is broad and not limited to corporations and LLCs. It is all kinds of formations of legal entities, including co-operatives, unions and certainly trade unions. In so far as they have a legal personality under either Ukrainian law or any other applicable legal regime, they would be in a position to submit a claim.
The Chair: Briefly, if anyone has any interests to declare—I should have said this before the first question—maybe you could declare it before your question or note that post the meeting. Thank you very much.
Q2 Lord Anderson of Swansea: Will the principles of compensation in our civil law be applicable? For example, will future earnings be taken into account for the widow of an astrophysicist compared to the widow of a carpenter? Would the amount be the same or does it depend on matters like future earnings?
Markiyan Kliuchkovskyi: It is yet to be determined. It is for the future claims commission to determine approaches to compensation in each category. In all likelihood, the approaches will be different from one category to another. There are two elements of this. First, as a matter of concept, future earnings are a factor to the extent that the register is already collecting those claims. We have collected more than 150,000 claims at this point. We are inviting information from claimants about what that could be. The same applies to claims from businesses or legal entities. They have the opportunity to claim for not only the loss of assets but the loss of future earnings.
That being said, the commission in the future, as a matter of its approach and then its review of individual cases, will have to determine what approach to take. The experience of previous claims commissions suggests that, sometimes, in the interest of the efficiency of the entire mass process, commissions can adopt principles of generalisation and standardisation in their approach. It may be less of an individual assessment, rather than a lump sum arrangement or something fairly standard. Then again, I am looking into the future and trying to understand how the future commission will make those decisions.
Maria Tymofiienko: Regarding the UK’s role, once the UK has ratified the convention, it would hopefully be part of the council that consists of nine member states and would be able to inform the rules and procedure for evaluating the damage done. That is why it is so important that the UK is part of the council that will be formed and that it can inform and set up those proceedings.
Q3 Lord Boateng: The international claims commission for Ukraine would, on the face of it, appear to have to negotiate and find a way through several complex challenges regarding its relationship with the International Criminal Court and with other accountability mechanisms. In relation to complementarity as opposed to duplication, for instance, how do you prevent double-dipping where a claimant seeks to obtain reparations through the ICC while simultaneously pursuing financial compensation via the ICCU? Then there are other issues that I anticipate the ICCU will face around prosecutorial confidentiality, information sharing and evidence sharing. This question is really to all three of you: how do you see these complex relationships being negotiated?
Tetyana Nesterchuk: I can give a general overview. The compensation claims commission is probably the only show in town when it comes to compensation. Neither the ICC—the International Criminal Court—nor the Special Tribunal for the Crime of Aggression against Ukraine has any right to award or make an order for compensation, whether on behalf of a state or on behalf of individuals whom they find guilty. The only court that could award compensation is the European Court of Human Rights.
There will be a small overlap between any possible just satisfaction awarded by the European Court of Human Rights. You recall that, in July last year, there was a huge decision on the merits, where the European Court of Human Rights found that Russia was responsible for all the acts of aggression in Ukraine from, I believe, May—I cannot quite recall the date—or April 2014[1] all the way up to 16 September 2022, which is when Russia left the European Convention on Human Rights and the Council of Europe. No decision as to just satisfaction has been made by the European Court of Human Rights. In fact, what it said on that award of compensation is, to paraphrase, “We know that a register has been established whose aim is to record all the losses, so we will postpone the decision on just satisfaction and we will see how that mechanism evolves”.[2] So there will have to be a conversation between the Claims Commission, the Register, the Council of Europe and the European Court of Human Rights to ensure that there is no double recovery, but I cannot imagine that being a very difficult process given that they are all bodies within the same international institution.
There are also decisions—I say that this is the only show in town with a caveat—because there are also decisions by Ukrainian national courts and there might be decisions by other foreign national courts to determine compensation claims against the Russian Federation. Those decisions will be very few and far between. The reason is that, while there are a lot of decisions, certainly in the Ukrainian courts, none of those have been enforced against the Russian Federation. When it comes to the enforcement of a national court judgment, not an international one, there is a principle of sovereign immunity against enforcement that applies to the Russian Federation’s assets.
So in the very few circumstances where there might have been enforcement—I am not aware of a single case where there has been successful enforcement against the Russian Federation in claims for damages—information should be supplied by the national authorities. I would expect some sort of mechanism where the national courts supply the information to the Claims Commission and the Register to ensure that there is no double counting. In terms of the viable options for individuals to get compensation, they could go to national courts, but they could not very well enforce any awards that they get from them due to the fact that the majority of Russian state assets will be covered by immunity from enforcement.
Markiyan Kliuchkovskyi: If I could complement that with two short points, first, the convention on the claims commission in Article 19.3 establishes a positive obligation on the commission and its bodies to communicate with other mechanisms specifically with the purpose of co-ordination and avoidance of double compensation for the same damage. That is something that the drafters and negotiating parties have thought of.
Secondly, for one of the instruments that is being established—the Special Tribunal for the Crime of Aggression against Ukraine—Article 37 of its statute foresees that, if there are any assets to be confiscated from the defendants prosecuted by that tribunal, they are to be handed over to the claims commission for distribution among its victims.
Finally, I can speak to the other aspect of your question from my experience of having engaged with the ICC and other bodies, especially those that prosecute criminal acts, with respect to exchange of evidence. You have metaphorically hit the nail right on the head in saying that prosecutorial confidentiality puts severe restrictions on the ability of those bodies to share evidence with us. We have to think how to do it thoughtfully, legally and, most importantly, without subjecting those proceedings to harm from those disclosures.
Q4 Lord Boateng: Thank you for that. Could you help me with this issue? I understand that the ICC has territorial and temporal jurisdiction over core international crimes in Ukraine since 2014 but, in contrast, the ICCU’s current temporal jurisdiction is limited to damage and injuries incurred on or after the full-scale invasion on 24 February 2022. That would leave a jurisdictional gap, would it not, regarding losses suffered during the initial 2014 annexation of the Crimea and Donbas? How will that be dealt with?
Markiyan Kliuchkovskyi: There is indeed a limitation in the mandate of the commission to address the acts that started on 24 February 2022. The reason is that it addresses the full-scale invasion of the Russian Federation into Ukraine, which has been qualified, including by the United Nations General Assembly, as an act of aggression. It follows that logic. That being said, the provisions of the convention allow the possibility for expansion of the temporal scope of the claims commission to include the events that started in 2014. States would have to make a positive decision about it and make an amendment to the convention, but that possibility has been specifically referenced in the text of the convention.
The Chair: I am sorry if I did not understand this correctly but, when talking about the conflict between domestic cases in other countries, maybe the UK, and this separate claims commission, would assets confiscated in the UK go into the compensation pot, as it were, or would a separate claim have to be made on those assets in relation to the claims?
Markiyan Kliuchkovskyi: In so far as the architecture of this claims mechanism is concerned, the next phase after the establishment of the claims commission is the establishment of the compensation fund that is meant to facilitate payments of the awards of the commission. Those decisions have not been made yet but, conceivably, whatever assets are available for that purpose—whether it is assets immobilised in various jurisdictions or otherwise—they would be made available to that fund and become the source for those claims.
The Chair: And are we signing up to that?
Markiyan Kliuchkovskyi: That would be the singular process. The claimants would not be required to make any additional steps or claims.
Tetyana Nesterchuk: Right now, you are not signing up to that. The only thing you are signing up for now is the establishment of the Claims Commission. How the compensation fund will be established and where its funds will come from you are not signing up for right now. That will be a separate decision.
Q5 Baroness Anelay of St Johns: Following up on the same theme, it has been clear in discussions in both the House of Commons and the House of Lords that there is very strong support here for ensuring that there should be compensation to Ukraine for the illegal activities carried out by Russia against human beings and businesses. What you have described is really a three-part system. The first is the register of damage and the variety of people and businesses that can register damage—including, I understand, UK businesses. Secondly, we have heard about the international claims commission, but, as the Chair mentioned, it is then the compensation fund itself.
We have discussed at length, not in this committee but certainly in the European Affairs Committee, how we can ensure that someone like Mr Abramovich can have his ill-gotten gains used for compensation. I understand that there is a case going on in Guernsey, so I will not say more. What kind of processes can happen at the moment to start to give confidence to the people of Ukraine that there will be a compensation fund—not just for the administrative costs being borne at the moment but as a reality, and not just in several generations’ time but so that they can see something happening?
Tetyana Nesterchuk: In terms of process, you mentioned Abramovich’s funds. We know that there is also about £2 billion from the sale of Chelsea languishing somewhere in the banks here in London. But there is more. About £300 billion of state assets, from the Central Bank of the Russian Federation, have been frozen around the world. About £200 billion is in Euroclear and, as I understand it, about £9 billion is here in the UK. Both the US and Canada have legislation that authorises their Governments, by an order, to make those funds available to a future Compensation Fund. So there is already legislation in Canada and the US. I would certainly urge this Government to introduce similar legislation authorising—not ordering it right now—the Government, by an order, to make the transfer of those immobilised assets to the Compensation Fund once it is established, because that legislative authorisation will send a signal that this country will support the establishment of a compensation mechanism that will work for Ukraine.
Baroness Anelay of St Johns: I have a follow-up question. When David Cameron was our Foreign Secretary, having been Prime Minister, he seemed to think that there was going to be an agreement between the European Union and the UK that there could be a method by which those assets could be obtained. Is that still the case?
Tetyana Nesterchuk: That is still on the table. As I understand it, efforts are now being made. Back in December, we were led by Germany, which floated a slightly different idea. It wanted to use those assets to borrow against and lend the money to Ukraine. As I understand it, right now the Netherlands is leading on an initiative to start again the discussion about using those immobilised assets as, in effect, a down payment on Russia’s obligation to compensate Ukraine.
This convention recognises that the responsibility for compensation lies with Russia. Until Russia joins the Convention by consent, the only way of ensuring that Russia’s obligations are complied with and compensation is paid is by using the immobilised assets as a prepayment of the already recognised obligation for reparations. The general position in international law is that the obligation to pay compensation or reparations, whatever you call it, arises immediately upon the breach of international law. We know that the breach here is fundamental: it concerns Article 2.4 of the UN Charter.
Upon that breach, two obligations arise. The first is to cease the breach, which, as we know, has not happened. The second is to compensate for all loss caused. That has been established. The only thing international law does not give you is a mechanism. So this Convention provides the implementation mechanism for the payment, enabling Russia to pay compensation. Again, under international law, the consent of the aggressor state to the payment of reparations is not needed because there are other mechanisms, such as a doctrine of countermeasures, that enable states to ensure the aggressor state’s compliance with international norms. This mechanism has been used by the US and Canada—perhaps the time has come for the UK to join in. This does not mean that you have to use it, but at least you have it in place so that it can be used once an agreement is reached in Europe.
Maria Tymofiienko: There is a very good report outlining the possible legal avenues for dealing with the transferral of the frozen assets into the future fund; perhaps I can submit that as evidence for the committee to consider the possible legal mechanisms. Of course, there is already a precedent. The UK has contributed £2.26 billion to the G7’s extraordinary revenue acceleration loans model, which is made up of the windfall profits generated from immobilised assets. So this has already been done. This question needs to be considered to create a law to enable the transfer of all assets into the future fund.
The Chair: Lord Hannay has a good segue here but, in terms of the treaties that we are scrutinising, the compensation fund would be a separate treaty over which we would have additional scrutiny. Obviously, there will be further discussions around that—this is specifically for the claims commission—so there is an argument to be had there later.
Q6 Lord Hannay of Chiswick: Before I put my question, I should make a declaration: I was the British ambassador on the UN Security Council when the Kuwait compensation commission was set up. I voted for it, on the instruction of my Government, and I was there for all of the follow-up, which was pretty detailed and, as I am sure you are aware, resulted in complete 100% payment for the damage incurred by Saddam Hussein’s aggression against Kuwait. So I have a little experience of this matter.
The claims commission is being established on the basis that, under the laws of state responsibility, Russia is responsible for all damage caused by its internationally illegal or wrongful—however one likes to characterise them—acts. However, the commission is being established in the context of a war of ongoing hostilities. Is engagement with Russia, as the aggressor, a necessary step in order to make the claims commission and the compensation fund effective? Or are you basically envisaging making it effective without Russian co-operation—that is, without Russia being willing to discuss this and pay from its own funds?
Markiyan Kliuchkovskyi: As we have discussed, Russia’s duty to make reparations is not conditional on its consent to or acceptance of the duty; that is just part of customary international law. From that perspective, the participation of Russia in this mechanism is not, strictly speaking, required.
That said, I think everyone agrees that Russia’s participation is quite desirable. There are provisions in the Convention Establishing an International Claims Commission for Ukraine that speak to that effect and say that Russia is welcome to join this claims commission at any time on the condition that it accepts responsibility for its wrongful acts against Ukraine and commits to paying the awards issued by the commission. Russia can then be a participant in the process.
However, this mechanism was designed so as not to make it a hostage of Russia’s willingness or unwillingness to join. We come back to the starting point: it has a duty to make reparations, regardless of whether or not it wants to do so. Through access to various resources, including the vast volumes of sovereign funds of the Russian Federation that have been immobilised by various countries in Europe and elsewhere, the states signatory to this convention have in their hands, at least in principle, the tools to make this mechanism work without Russia’s participation. So, in essence, it will work both ways: with or without Russia’s participation.
Lord Hannay of Chiswick: Unlike the situation in the case of Kuwait, where the legal basis was provided by UN Security Council resolutions that were adopted under Chapter 7 and therefore had the force of international law on both Iraq and everyone else, you do not have an instrument like that at your disposal here. So it is a rather different proposition, although no doubt the jurisprudence and procedures that were gone through in the case of Kuwait—and operated very successfully—are important to the way in which you are handling things.
Markiyan Kliuchkovskyi: That is exactly right. If I can speak freely, the only reason why the convention was drafted and the register was established in the way they were is that the Security Council is not capable of dealing with this matter because of Russia’s veto rights. Hence in 2022 the matter ended up with the UN General Assembly, which first acknowledged and deplored the act of aggression. It then issued a resolution in November 2022 stating that Russia has a duty to make reparations and is to be held responsible for its aggression against Ukraine. It was then up to the able and willing states in the international community at large to establish this mechanism, as guided by the General Assembly. Otherwise—again, if I can speak freely—I am sure that it would have been much easier to have done it through the Security Council and the powers of Chapter 7 of the UN charter.
I should also add that, in many ways, the register and the claims commission were modelled on and inspired by the lessons of the UNCC, including with respect to the establishment of a compensation fund. The concept that the fund could hypothetically be filled with a share of Russia’s future oil revenue, as was done in the case of Iraq, is also on the table and should be considered a viable option.
Tetyana Nesterchuk: I have looked into this precedent, because it remains one of the few precedents that we have. Very importantly, the resolution that declared Iraq liable to pay compensation under international law said that it reaffirms that Iraq is liable. It did not declare Iraq liable. There was no mechanism for declaring Iraq liable; there is already a recognised law that Iraq is liable. The resolution was simply needed to reaffirm that, and then to establish the mechanism for the implementation of the liability to compensate.
This is precisely what happened here in the case of Ukraine. Because the UN Security Council was blocked by Russia, on 27 February—a few days after the full-scale invasion—the General Assembly scheduled an unscheduled meeting to deal with the situation in Ukraine. The special resolution, the “Uniting for Peace” resolution—you probably know about it—requires that the General Assembly will consider the matter of peace and security immediately, if the Security Council is unable to do so. It was under that same procedure that there were unscheduled meetings in which there was a resolution, first, condemning the invasion. Also, and importantly, the resolution passed in November 2022 recognised that the Russian Federation must be held to account for violations of international law and must bear the legal consequences of its internationally wrongful act. That was supported by 94 states. Under the Claims Commission Convention, they can join this mechanism.
Lord Hannay of Chiswick: Has Russia given any explanations as to how it was able to vote for the Kuwait commission but was threatening to veto this one?
Tetyana Nesterchuk: It did not threaten to do so—it actually did veto. An emergency meeting was convened, and Russia vetoed. The draft resolution was tabled on 25 February, calling for the withdrawal of Russian troops. Russia vetoed that Security Council resolution, after which there was the UNGA meeting.
Maria Tymofiienko: I want to add the importance of the commission to establish the scale of damage and to quantify that damage. Obviously, your question relates to Russia joining the commission, which would require a process under Article 28 of the commission to be followed. But as we do not have the willingness of Russia to do so, and as the war is continuing, it is very important that the commission functions now in the absence of Russia agreeing to this process. It is important for both questions, in terms of the Ukrainian public, that there is an established, quantified measure of damage that can be used to deter Russia and encourage Russia to come to the negotiating table and seek peace eventually.
At the moment, while Russia is not part of the process, we are looking at the frozen assets. We know already from the initial assessment of the damage that it goes way beyond those figures. The damage is already quantified at $500 billion or $600 billion. It is so important for the commission to function so that those figures can be substantiated.
The Chair: So you are saying that the sheer process of this is important in, hopefully, driving to a good conclusion, because it is visible and recorded, even if we have not got to the compensation mechanism itself.
Lord Stevenson is online. I will hand over to him to ask his question.
Q7 Lord Stevenson of Balmacara: It would helpful if you could give us a little more background about how much the UK has been involved in these negotiations and in the development of the convention. Has it been an active one, or is it more of a second order? Could you also expand on what you think we should do here to help with the development of this? You said already that the United States and Canada have legislated. Are there other legislative opportunities that you think we should take?
Markiyan Kliuchkovskyi: With respect to the UK’s participation in this entire process, I should start by saying that the UK has been a steadfast supporter of this mechanism every step of the way—from the register to the preparation and negotiation of a claims commission convention. The UK Permanent Representative to the Council of Europe, Ambassador Sandy Moss, is the chair of the Conference of Participants, and we have had the pleasure of working together with him for the past almost three years, advancing the cause of the register at the forefront of the mechanism. We are very grateful for that.
Having served as the secretary of the negotiations process, I can say that the United Kingdom delegation was among the most active, and indeed probably the biggest in number of participants. Its participation was absolutely vital, because not only is the UK a powerful and respectable member of the negotiating community—if I can put it this way, other delegations listened to what the UK has had to say—it was also quite important that the UK kept focus both on the goals and targets of this process and where we want to end up, and on the viability of this mechanism, including from a point of view of financing, budget and sustainability, so that it did not become an unbearable burden for those states that are willing to support the process. All in all, it was an incredibly efficient participation in an overall very fast and efficient negotiation process. We are quite happy and pleased, but also not surprised, that the UK became one of the signatories of the convention on the day it was adopted.
Maria Tymofiienko: I will just add to that. We have submitted a report from BIICL for this committee’s attention. The recommendation for this committee is to advise the Government first to join the commission, to ratify the process and then to encourage the expansion of the scope of the claims commission to cover the period from 2014, so that we do not have that gap in the period in which the claims commission is considering the claims. It is important, as we discussed, to adopt legislation for transferring the frozen assets and set up of the future compensation fund. All of these are critical and important steps that UK should lead on.
Tetyana Nesterchuk: I will just add to what Markiyan said about the UK’s delegations involvement. I sit on the Bar Council’s International Committee, and particularly in our public international law group, and I know that we currently have a lawyer from the UK involved in every single case before the International Court of Justice. We have the expertise here in the UK on issues of public international law. I am not surprised that it was the biggest delegation by size, because there is a lot of learning here. I think that all members of the Bar Council would be very happy to share that learning and welcome the implementation of the Claims Commission.
Q8 Lord Hannay of Chiswick: If Britain were to withdraw from the convention, would this have any effect on the matters we are talking about, including the role it could play? Could you tell us what your views on those questions are?
Markiyan Kliuchkovskyi: Frankly, we have not given much thought to the consequences of withdrawal from the convention, as it has not yet entered into force. What I will say is that, under the terms of the convention and in the context of the Council of Europe, the United Kingdom has a status of what we call “major contributor”, which means that its role, including financial contribution to the budget and financing of the commission, is considerable. A withdrawal from the convention would have difficult consequences, even from that perspective, let alone from the point of view of the political signal that it would send.
Frankly, we are in quite an optimistic mindset, if I can put it that way. We are working towards this convention coming into force. As you may know, coming into force requires ratification by at least 25 states, including three major contributors, so speedy ratification by the United Kingdom is absolutely vital in that sense.
Lord Hannay of Chiswick: Would the same considerations apply if the UK were to withdraw from the European Convention on Human Rights?
Markiyan Kliuchkovskyi: I am sure that it would be an equally difficult proposition. I am not an expert on the European Convention on Human Rights, so I should caveat my response, but I can imagine that, as accountability instruments have a considerable history and considerable effort is being put into their establishment and authority, they are to be safeguarded in the current world, to the extent possible.
Tetyana Nesterchuk: I am happy to comment. Withdrawing from the Claims Commission Convention would have a lot of practical consequences. The UK would not be able to participate in the establishment and setting up of all the rules, such as on how the evidence will be treated. It would not be able to nominate people to serve as commissioners; it is supposed to work on the determination of different commissioners. Of course, it would send a huge signal about the UK’s commitment to Ukraine and, I should say, to international law and upholding international law.
The European Convention on Human Rights is a completely separate issue. The only thing I would say is that withdrawing from the European Convention on Human Rights would probably have similar political consequences to withdrawing from the EU, in terms of the voice of the UK internationally. The European Convention on Human Rights was intended as a peace project. Withdrawing from it at a time when peace is so fragile would probably be quite disastrous.
Maria Tymofiienko: It is important to understand that we are talking about compensation not just to Ukrainian businesses and individuals but to British citizens, legal entities and businesses. Last week, during a massive attack on Kyiv, there was an attack on a drone manufacturer that is in a joint venture with a British manufacturer—Skyeton and Prevail Partners. That had a direct impact on the ability of British businesses to continue their economic activities.
So it is important that the Government ratify the convention and are part of the council that establishes those rules that will measure the damage and create the confidence in other international partners to join this mechanism. Of course, that would be in line with other members that have already ratified the process, including Estonia, Iceland and Ireland. Five EU members have already ratified and we are we are hoping that—
Tetyana Nesterchuk: Estonia, Latvia, Ireland, Iceland and Ukraine have.
Maria Tymofiienko: The UK needs to be among the nine members of the council to be able to inform the rules and procedure for the commission.
Q9 Lord Anderson of Swansea: Unfortunately, short of a comprehensive defeat of Russia, it is surely unrealistic to expect a proud country like Russia to put up its hands and say, “We are responsible. We must pay reparations”. Two questions arise. First, if we are to circumvent Russia directly, what are the potential sources of the fund apart from the frozen assets? Secondly—I suppose this is one for the British taxpayer—what contribution do we expect from the UK? Presumably the costs of administration will be very substantial indeed. Will they be apportioned among the member states in some way? How do we go about that?
Markiyan Kliuchkovskyi: Allow me to answer one part after the other. Fundamentally, the modern system of international law has left the concept of victor’s justice behind. These days, in how international law and the UN charter are built, justice follows the principles of international law and those who have committed international wrongdoing—Russia, in this case. The principle baked into the fabric of the register of damage for Ukraine and this claims commission is that, in this case, Russia must be responsible. It is a non-negotiable principle at this point.
How to implement it is a different question. It does not have to equate to an outright defeat in the battlefield. It has to equate with the possibility that, at some point, Russia would presumably want to reintegrate itself into international relationships and international trade. It would receive some sanctions relief, perhaps, and restate itself as a normal member of the international community. There is plenty of opportunity for that and for Russia’s participation in this mechanism.
Until that happens, there are ways to go about securing reparation without Russia’s acceptance. Even today, we discussed the possibility of a reliance on Russian sovereign assets a little, and there are other elements. One of the elements that has historically proven to be fair was the potential use of Russian oil revenue for that. It could hypothetically be bargained against some sanctions relief, as was done with Iraq in 1991, when Iraq was allowed to trade oil in exchange for a diversion of a certain percentage into the compensation fund. Thus, step by step, progress towards this goal can be achieved. It would certainly be considerably easier if Russia were to participate in this process constructively, but it is possible none the less.
With respect to funding the commission, every effort is made to make it as lean as possible. Whereas we know from historic records that the budget of the UNCC was from $40 million to $60 million a year in 1990s money, the projected budget of the claims commission will be from €7 million to €15 million a year, which is considerably lower. The €7 million annual budget is the budget of the register of damage as it currently stands, so we are not asking to inflate that to a big extent.
The exact share for the British taxpayer is difficult to calculate, because it depends on how many states will participate. Currently, the share of the United Kingdom in the register of damage is approximately €800,000 a year. This just gives you a sense of the scale of the numbers. Again, we are doing everything possible to keep this structure lean, because we are of the belief that justice should not be a burden for the states that support it. Therefore, our team in the register is small: we leverage technology, including digital technology and artificial intelligence, to do work that required 300 staff in the UNCC context. So we keep it under control.
The Chair: Can I confirm that your office unit will roll into the claims commission? I think there is a budget that we have allocated for it, Lord Anderson. Is it £1.2 million, which has already been put into the claims commission?
Markiyan Kliuchkovskyi: That is precisely right. Upon the entry into force of the convention, the register will essentially become the claims commission, so there will not be duplication or a parallel track. That is also a cost-saving measure. Having the claims commission established under the umbrella of the Council of Europe is an efficiency gain in and of itself, because the commission can rely on the council’s infrastructure, rules, regulations, governance and IT security frameworks, making it much more efficient. Indeed, the register is now in the third year of its existence, and the United Kingdom has contributed to our budget every year, along with the other 44 members.
Tetyana Nesterchuk: Article 23 of the Convention talks about the financing. It is all overseen by the financial committee, which will be appointed and the cost will be shared between members. There have to be at least 25 before it even becomes a thing, because you need 25 for ratification, so the budget will have to be shared among at least 25.
The Chair: It would be very useful and interesting for this committee if you could put any figures on what UK citizens and businesses might be able to claim or on how many claims have already been registered under the register of damage from UK-related persons and businesses.
Markiyan Kliuchkovskyi: Thus far, the register is primarily receiving claims from Ukrainian citizens.
The Chair: Of course, but it would be interesting to follow up on the discussion.
Markiyan Kliuchkovskyi: Indeed and, as has been discussed, there are no nationality restrictions, so UK citizens and businesses will be able to submit claims. Until those claims are submitted, we will not—
The Chair: Have we not had any claims submitted to the register of damage yet?
Markiyan Kliuchkovskyi: No, we have not yet.
Tetyana Nesterchuk: I am surprised by that, but it may be because it has not been very well publicised here in the UK. I personally represent two citizens of the United Kingdom who have been held and tortured by the Russian authorities in the occupied territory of Ukraine, so there certainly are claims. As for businesses, do not forget that losses are ongoing. It has not been until recently that businesses such as Octopus Energy have come in to do renewable energy projects in Ukraine, after the massive infrastructure destruction. If it is going to be targeted, it will have a right to bring a claim to the register.
Q10 The Chair: I have one last question. It is not my role to speak on behalf of my fellow Members, but the work that you are doing is incredibly important, and I am very honoured to have you sitting in front of us today. Thank you very much for what you are doing and the important calls that you are fighting for.
I ask a slightly broader question about the true value—and I hope that I am setting you up for a good answer. The Iraq claims commission was very different, in the sense that we had effectively won the war and were in a position to make sure that the process was properly followed through. There has been recent speculation in the press over the past 24 hours that war crimes tribunals may be part of the counter in negotiating a settlement—and presumably so would a claims commission. What is your response to that risk? To go back to some of the questions about whether Russia will participate or not, how valid is this system, really, if there is such a high risk that the parties will not co-operate?
Markiyan Kliuchkovskyi: Not being involved in the negotiations personally, all I can say is that every indication that we have had from member states, including Ukraine, directly to us, is that matters related to accountability for aggression are non-negotiable and will not be taken off the table. We do not know what form of resolution they will have when it comes to a peace agreement, or any sort of arrangement, but we have every reason to expect that the question of compensation would be dealt in some form.
In many ways, the work being done today by the register, by building the claims commission and by rallying the support of the international community around these matters, solidifies the presence of these matters at the negotiating table, making it more and more difficult to disregard or diminish them. It is also fair to say that this question of reparation is intrinsically linked to the question of the post-war recovery of Ukraine, where we expect there to be a mix of private capital flowing in with investment by interested states, but it also has to have an element of compensation for the damage that was in fact incurred.
From that perspective, we look at this process optimistically. We have no reason to believe that this will be taken off the table; all we can do is to make sure that the record of the register of damage is reflective of the reality on the ground and shows the totality of the damage that is being inflicted on Ukraine.
Maria Tymofiienko: It is very important to make Russia eventually face accountability and pay for the damage that has been caused. It is important that the international community has built impenetrable legal instruments that bring this inevitable outcome whereby the damage is being compensated to victims—but also economic damage. That is why it is so important to build the infrastructure so that it complements each other and brings us to an outcome that brings peace, justice and recovery to Ukraine.
Tetyana Nesterchuk: I will approach this question from the point of what brings lasting peace, and then come to the legal point of view. What brings lasting peace is accountability and justice. If the people of Ukraine do not have justice and do not have the ability to rebuild their lives and their homes—because, let us face it, investors are not going to invest in rebuilding someone’s home in a little village just outside Kyiv—there will be no reconstruction of Ukraine. That will be a problem for the entirety of Europe. There will be a crisis in Europe, unless the Ukrainian people are able to rebuild their lives.
There is also the responsibility of the state of Ukraine to its people. We in Ukraine are members of the European Convention on Human Rights, so the state of Ukraine is responsible for ensuring that the human rights of its people are upheld. If the state of Ukraine does not have the funding to ensure that the human rights of its people are upheld, and that its people have somewhere to live and can educate their children, it will not survive. If this country and the rest of Europe is supportive of Ukraine continuing to exist up to the end of this war, some sort of negotiation of compensation has to be part of the peace process.
Lord Hannay of Chiswick: Could I just make point from my Kuwait experience? I should never use the word “reparation”—the word is “compensation”—with every reason for feeling that, if you use the word “reparation”, there will be an element of punishment of the aggressor state over and above the damage that they have actually inflicted.
Tetyana Nesterchuk: I completely take the point, but it is completely unjustified, because the articles of the International Law Commission state that reparations are not intended to punish. Legally, reparations are the right thing—but compensation is a part of reparations; the other part of reparations could be apologies, and that sort of thing.
The Chair: Thank you very much indeed. We are extremely honoured to have you in front of us. We look forward very much to issuing our report, which I hope you will read with interest. The fundamental work that you are doing is incredibly important and, as a nation, I am delighted that we are backing you so far.
Baroness Anelay of St Johns: And thank you, Maria, for sending us those things—it will be very helpful.
The Chair: Yes, and please feel free to send to the committee any follow-up information that you have over the next two weeks. We would be extremely grateful on a few points, and for other data.
