The post-war recovery of Ukraine will require colossal financial infusions and a carefully developed action program that takes into account absolutely all factors and conditions for its implementation.
Yaroslav Sydorovych, senior expert of the ANTS Project «Russian Assets As the Source to Restore the Ukrainian Economy», noted that our efforts should be aimed at strengthening the effectiveness of economic sanctions, adopting effective laws that would allow confiscation of assets of the russian federation and its residents that are under sanctions, creation of a management system for russian assets frozen and seized under sanctions to compensate for economic losses associated with the aggressive invasion of russian troops on the territory of Ukraine.
ANTS experts, as a part of the project «Russian Assets As the Source to Restore the Ukrainian Economy», with the support of the National Democratic Institute (NDI), are conducting expert-analytical studies on some russian assets that are under sanctions, in particular on the reserves of the Central Bank of russia as an object sanctions against the russian federation.
In March 2022, the russian central bank stopped showing the structure of its international reserves, as about $300 billion of russia’s gold and foreign currency reserves were frozen by Western countries, in particular the USA, the EU, Canada, and Great Britain.
Before the start of a full-scale invasion of the territory of Ukraine, the reserves of the Central Bank of the russian federation consisted of various assets equivalent to:
– foreign currencies – 256.3 billion US dollars or 41.9% of the total amount of assets in reserves;
– government securities – 184.8 billion US dollars or 30.3%;
– gold – 123.7 billion US dollars or 20.3%;
– other assets – 45.9 billion US dollars or 7.5%.
As of March 1, 2023, the reserves of the Central Bank of the russian federation were estimated at $574.2 billion, of which assets in foreign currency – $410 billion, monetary gold – $135.6 billion, that is, the share of gold increased to 23.6%, and foreign currency and securities in foreign currency decreased to 71.5%.
Gold is one of the main components of the international reserves of the russian federation, located on the territory of russia.
If russia will sell its gold every month, as it did in January 2023, selling 2.3 tons of pure bank gold, then the available reserves will be enough for sales for more than 80 years.
russia’s international reserves include a large number of national currencies, their proportion undergoes certain changes under the influence of sanctions. A significant portion of assets in currency and securities are denominated mostly in Euro, Chinese Yuan and US Dollars, also significant amounts in Swiss Franc, Japanese Yen, British Pound Sterling, Canadian Dollar, Swedish Krona, Australian Dollar, Norwegian Krone, Danish Krone, South Korean Won etc.
There are also types of assets that are located outside of russia and are currently not under sanctions – these are Special Drawing Rights (SDRs) – assets of the International Monetary Fund, created as a reserve asset of the Bretton Woods monetary system.
These assets represent a basket of 5 currencies: the US dollar, the euro, the Chinese yuan, the Japanese yen, the pound sterling, and for russia, about 4% of the reserves are estimated. Also, the reserve position in the IMF is the reserves of the state’s funds in the IMF, which were deposited by it during its entry into the fund, the share of the russian federation: more than $5 billion in equivalent.
Ukraine’s partner countries can and should take the following active steps in order to hold russia to significant economic responsibility for military aggression on the territory of Ukraine: make decisions that will make it possible to remove immunities from the assets of the Central Bank of the russian federation, and send these assets to compensate Ukraine for reconstruction.
An example of courage was shown by the prosecutors of the International Criminal Court in The Hague, with their decision to arrest the aggressor vladimir putin.
A democracy must protect values that are based on the observance of laws, and if the laws do not already ensure justice, then pass such laws. Bringing the aggressor to real economic responsibility is a way to close the «Pandora’s box» opened by the leadership of the nuclear state.
Thanks to the conducted research and the presentation of results at international and national events, the NGO «ANTS» with the support of the National Democratic Institute (NDI) continues its work on international advocacy and the development of recommendations regarding the system of permanent monitoring and public control of decisions on sanctions. We believe that our work is an important component of restoring the Ukrainian economy and raising public awareness of important aspects of the process of confiscating russian assets under sanctions and directing them to the reconstruction of Ukraine.
The project «Russian Assets As the Source to Restore the Ukrainian Economy» aims to organize a number of other activities that will contribute to raising public awareness of the importance of confiscating russian assets for restoring the Ukrainian economy.