On Monday (14th November 2022), the United Nations General Assembly voted to approve a resolution recognizing that Moscow must be responsible for paying reparations to the invaded country.

 

UN Adopted a Draft Resolution on Reparations to Ukraine

On Monday (14th November 2022), the United Nations General Assembly voted to approve a resolution recognizing that Moscow must be responsible for paying reparations to the invaded country. The UN General Assembly adopted a draft resolution declaring that Russia must make reparations to Ukraine for damage inflicted during the nine-month-old conflict. 94 states voted in support of the resolution, 13 countries voted against, and 74 states abstained. The resolution recognizes the need to establish "an international mechanism for reparation for damage, loss or injury" arising from Russia's "wrongful acts" against Ukraine. It recommends that the assembly's member nations, in cooperation with Ukraine, create "an international register" to document claims and information on damage, loss, or injury to Ukrainians and the government caused by Russia. To date, it has been reported that the West froze around USD 330bn of Russia's international reserves since beginning of the conflict in February. In response, Russian envoy said that by voting in the UN General Assembly, Western countries attempt to create "a prerequisite for outright robbery". Shortly after, Dmitriy Medvedev, Deputy Chairman of the Security Council of Russia stated that as a response Russia will have to withdraw the money and property of private investors from countries that, based on the decision of the UN General Assembly, will adopt national acts "on the theft of Russian assets." Medvedev further wrote on Tuesday evening, "we will have no choice. It will be necessary to irrevocably withdraw the money and property of private investors from such countries". "Their (money and other valuables) in our country, by a happy coincidence, are just more than USD 300bn" "Enough to make up for what was stolen from Russia". It is important to note that assets of all investors from so-called “unfriendly” jurisdictions have been frozen in Russia in S-type accounts. No transactions are permitted to be concluded with these S-type accounts without special permission from Russian government.  Furthermore, under cancellation process for depositary receipts of Russian companies, local shares are also delivered to S-type account if the investor is based in unfriendly jurisdiction. With most program already terminated under Russian law since April 2022, option to cancel DRs and keep local shares in blocked account in Russia was previously considered by investors as viable alternative. If you still hold DRs or local shares of Russian companies, and would like to discuss alternatives currently available to you, please contact our desk.

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