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A new solution to finance Ukraine’s reconstruction: a trust fund of Russian assets


Michael Bernstam, a fellow at the Hoover Institution at Stanford University, and Stephen Rosefield, a professor of economics at the University of North Carolina at Chapel Hill, have proposed creating an independent trust fund that would consolidate all of the frozen foreign exchange reserves of the Central Bank of Russia and serve as a lending and borrowing mechanism for Ukraine’s reconstruction.

According to various estimates, Russia’s assets abroad range from $350 to $383 billion. They could become a source of payment for Ukraine’s needs to recover from the damage caused by Russia, as well as a pretext for lawsuits over Russia’s war crimes.

The trust fund will not replace regular Western assistance to Ukraine provided by national and supranational authorities, scholars say, but it complements these efforts and serves as an additional source of credit.

Experts also noted that the independence of the trust fund would ensure that the flows could not be interrupted due to any disagreements between EU governments or between branches of the US government. Even if there are changes in US government policy after the next election, the independent trust fund would remain and continue its lending operations.

In addition, the trust fund would avoid the debate over the pros and cons of freezing Russian assets: “It moves the assets into international fiduciary custody from their current suspended state, preserves them, and uses them to finance Ukraine.”

Scholars also believe that in the event of a lawsuit by Russia over the use of its frozen funds, Ukraine could voice its claims and provide evidence of financial losses and military destruction. In this case, a war crimes trial would continue, “which otherwise may never happen.”


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