Nino Turmanidze | November 11, 2025
Members of a Ukrainian armored unit conduct maintenance near the front line amid renewed discussions in Brussels over “reparation loans” drawn from immobilized Russian state assets. By Ministry of Defense of Ukraine; CC BY-SA 2.0
On September 30 this year, during an informal European Council meeting in Copenhagen, President of the European Commission Ursula von der Leyen proposed the long-awaited “reparation loans” for Ukraine, based on immobilized Russian assets. She emphasized that this was not a confiscation of Russian assets; rather, it was a mechanism to provide loans to Ukraine, which would be repaid only if Russia pays reparations to Ukraine. This proposal was anticipated by the international community, as since Russia’s invasion of Ukraine in March 2022, many European Union (EU) member states have frozen a significant portion of Russian assets, and discussions on their usage have been ongoing.
In addition, German Chancellor Merz recently expressed support for using frozen Russian assets for Ukraine while addressing longstanding legal and financial concerns related to this matter. However, De Wever, the Prime Minister of Belgium, has raised concerns about potential risks to Euroclear management.
These points are important, but our focus here is on the legal implications of this new approach to enforcing measures by the EU regarding frozen Russian assets. We will explore why the EU is exercising caution when dealing with these assets, whether international law permits states to utilize them as a lawful measure, and, finally, how the United Nations, the organization primarily tasked with upholding international peace and security, fits into this context.
Do Russian Assets Enjoy State Immunity?
Under customary international law, state-owned property, used for non-commercial and public purposes, that is situated in foreign countries enjoys state immunity from law enforcement. This means that it’s protected from measures of constraint, such as, seizure or confiscation of assets or any enforcement measure, imposed by foreign courts, as established by the International Court of Justice (ICJ) in the Jurisdictional Immunities of the State (Germany v. Italy: Greece intervening). In the following case, the ICJ held that a state does not lose its immunity from the jurisdiction of foreign courts even when it committed serious violations of international human rights law or the international law of armed conflict. However, ICJ also underlined that the immunity from jurisdiction of foreign courts does not mean impunity, in other words it does not mean that the act of a state in question is lawful under international law.
This immunity is based on the rationale that interference with state-owned property constitutes an interference in its sovereignty and infringes the principle of sovereign equality. Moreover, this protection also derives from the functions of the central bank, that is to stabilize the financial system and manage inflation. The principle of reciprocity is also significant, ensuring that every state can safely place its central bank’s assets in foreign states with a strong trust that it will remain untouched. The EU, by utilizing Russian assets, especially those of the central bank, prima facie infringes the customary rule of International Law on state immunity.
However, a pressing question arises: what happens if a state undermines the stability of international order and infringes its jus cogens obligations, such as the prohibition of aggression; does the international community have no power to overcome this rule of immunity and hold the state accountable? My tentative answer is in the negative. However, I propose that international law provides room for overcoming the rule of state immunity, or to address this issue by changing structures of international institutions, which I will discuss in the following paragraphs.
“Lawful measures” against responsible state under the framework of State Responsibility for Internationally Wrongful Acts
The United Nations General Assembly has repeatedly condemned Russia’s aggression against Ukraine and recognized the necessity for the Russian Federation to be held accountable for any violations of international law against Ukraine. This includes making reparations for its violation of article 2(4) of UN Charter on the prohibition of use of force or the threat to use of force against the territorial integrity or political independence of any state. However, Russia continues to pursue its imperial ambitions, disregarding the UN Charter and the prohibition of any forms of aggression towards sovereign states. Protecting these core principles and jus cogens norms of international law is not the sole interest of a single injured state, Ukraine, but the international community as a whole.
Russia has breached its international obligation and is a responsible state for its internationally wrongful act, which automatically entitles states to use countermeasures under the framework of the Articles on State Responsibility for Internationally Wrongful Act (ARSIWA), reflecting customary international law. In other words, states are entitled to take legitimate measures under international law against a state breaching its international obligation to ensure cessation of wrongful acts and reparation for damages to the injured state. However, justifying the deployment of Russian assets as a countermeasure within the meaning of Article 22 of ARSIWA may be challenging due to its temporal and reversible nature. A more logical, though novel, approach would be to apply Article 54 of ARSIWA, which could define the use of Russian frozen assets as a “lawful measure” taken by any state to ensure the cessation of wrongful acts and the reparations for the injured state.
In simple words, freezing, as well as deploying assets as a form of “reparation loan”, or even confiscation, shall be based on the right of any state, in our case the members of the EU, to take necessary measures against the Russian Federation to cease the breach of international obligations and ensure reparations for Ukraine. Using Article 54 of ARSIWA to justify the use of Russian Assets would most probably be utilized as the legal basis for justification because there is no precise interpretation of what “lawful measures” constitute and allows for broader interpretations.
United Nation Security Council – “Elephant in the room”
The EU’s primary purpose in aiding Ukraine is to put an end to this ongoing aggression, which should be the priority of the international organization created for that mission, The United Nations (UN). Moreover, the United Nations Security Council (UNSC), entrusted with the main mission and powers to adopt “prompt and effective action” for maintaining international peace and security, including adoption of mandatory measures under chapter VII of the UN Charter, is paralyzed. Similar mandatory measures have been successfully implemented by the UNSC in the past and could also be applied to the situation in Ukraine.
In 1991, the UN created the United Nations Compensation Commission as a subsidiary organ of the UNSC, under the Security Council resolution 687 (1991). This commission was created to process claims and provide compensation for losses and damage incurred as a direct result of Iraq’s unlawful invasion and occupation of Kuwait. The funds to pay compensation were drawn from the United Nations Compensation Fund, which received a percentage of the proceeds from Iraqi petroleum and petroleum products exports. Initially, the percentage was set at 30% and reduced over time.
The UN Security Council chamber in New York, where divisions among permanent members have left the body largely unable to respond to Russia’s invasion of Ukraine or enforce reparations measures.
The outdated and ugly structure of the UNSC, in particular the veto power of its permanent members including the Russian Federation hampers the possibility of adopting measures under chapter VII in the situation of Ukraine. This undermines the very essence of the United Nations. As the Finnish president, Alexander Stubb, has addressed in the recent United Nations General Assembly, the current structure of the UN does not reflect the realities of today’s world, and it is clear that the values and interests of member states are not respected in good faith. He further emphasized that “no single member should have a veto power in the UNSC, and if one of the members violates the UN charter, its voting rights should be suspended”.
This is a clear indication that the UN is powerless in the face of the great challenge of resolving a conflict of a scale that has not been witnessed since World War II.
Conclusion
As discussed above, the international law reflects the mandatory nature of the rule of state immunity for the foreign state-owned assets, including that of central banks or foreign financial institutions. However, state practice, especially of the EU member states, may prove that this rule is not absolute and it may be waived in case of violations of jus cogens norms, by proactively using Russian central bank assets.
The rationale for waiving this immunity can be found in the framework established by the Article 54 of ARSIWA . This allows for “lawful measures” taken by any state, even if it is not directly affected by wrongful act, to ensure the cessation of wrongful acts and seek reparations for damages. Nonetheless, the universality of this approach remains questionable, and it will be interesting to observe how states adjust to it.
Furthermore, the effectiveness of the United Nations has come under strict scrutiny due to Russia’s ongoing aggression against Ukraine and the UN’s clear inability to stop this war. It is clear that the UNSC is ineffective and struggles to address the challenges of modern society in maintaining international peace and security. The UN’s very function is in doubt, and without urgent reforms, we may soon witness it following in the footsteps of its predecessor.
Nino Turmanidze is a Barer Fellow at the Barer Institute for Leadership in Law & Global Development and a graduate student in the LL.M. program in Sustainable International Development at the University of Washington School of Law. Prior to her studies in the United States, she served as a maritime lawyer at the Maritime Transport Agency under the Ministry of Economy and Sustainable Development of Georgia. Nino Turmanidze has earned her Bachelor’s degree in International Law from Ivane Javakhishvili Tbilisi State University in 2022.