The European Union has already matured to the need for Ukraine to obtain compensation from Russia for war crimes.

Although the EU has reached a consensus on this matter, it remains at a crossroads regarding mechanisms to implement it: confiscate the assets or use them in another way.

Read about the difference between these mechanisms, what is better for Ukraine, what prefers Brussels, in the article of Sofia Kosarevych, an analyst of the Dnistrianskyi Center, How seized Russian assets will help Ukraine: EU scenarios (Ukr).

The published in December draft Directive on the definition of criminal offences and penalties for the violation of Union restrictive measures was a peculiar result of the European Union's work on compensation in 2022.

As well as proposing to criminalise sanctions circumvent, approval of the directive would make EU rules on tracing, identifying, freezing and confiscating assets applicable to a wider range of individuals and their assets.

The initiative at the level of the European Parliament and the EU Council is currently pending.

Therefore, the EU leadership continues to consider various ways of solving this issue.

Thus, the EU started the new year by passing the Resolution on the establishment of a tribunal on the crime of aggression against Ukraine in the European Parliament.

The European Parliament called on European institutions, member states and their allies to discuss the legal possibilities of using sovereign Russian assets as compensation for Ukraine. It also voiced the possibility of refusing or limiting the doctrine of sovereign immunity for Russia due to the gross nature of the violations committed by it.

MEPs supported the recommendation of the UN General Assembly to establish "international Register of Damage to serve as a record, in documentary form, of evidence and claims information on damage, loss or injury to all natural and legal persons concerned, as well as the state of Ukraine, caused by Russian Federation’s internationally wrongful acts in or against Ukraine."

The political significance of the document is difficult to overestimate, but the problem is that EU resolutions are purely declarative and have no practical consequences for European institutions or member states.

Unlike confiscation, the EU again voiced the idea in late January of using the mechanism of investing Russian sovereign assets as a way for Ukraine to receive compensation.

The European Commission has warned that it is difficult to make an appropriate legal decision unless they estimate the detailed amount of assets that could be used. The most common number is $300 billion.

But the uncertainty of the mechanism of investing Russian assets probably forced the EU to return to the idea of confiscation.

On February 15, the Committee of the Permanent Representatives of the Governments of the Member States to the European Union (English Coreper II) approved the creation of a working group to look at using frozen Russian assets for the reconstruction of Ukraine.

The Working Group will carry out a legal, financial, economic and political analysis of the possibilities of using frozen Russian assets to rebuild Ukraine. The Working Group will be chaired by Ambassador Anders Ahnlid, Director-General of the National Board of Trade.

One of their tasks is to identify and track Russian assets, as well as assess their value. The work will be carried out in close cooperation with the Freeze and Seize Task Force, led by the European Commission.

The implementation of this task should be facilitated by the approval of the tenth package of sanctions against the Russian Federation, said the President of the European Commission, Ursula von der Leyen. She noted that as part of the restrictive measure, the EU institutions together with the member states will contribute to the detection of all Russian assets in the Union.

The resolution B9-0126/2023 of February 16 calls on completing the legal regime allowing for the confiscation of Russian assets frozen by the EU and for their use to address the various consequences of Russia’s aggression against Ukraine, including the reconstruction of the country

In general, it will not be easy for the European Union to make an effective and compromise decision on the compensation mechanism.

This requires Kyiv to closely oversee this process, clearly declaring its agreement or disagreement with the proposed mechanisms.