Compensation for losses caused to business by war: prospects for an international compensation mechanism

Russia's full-scale war against Ukraine has resulted in catastrophic losses not only for the state but also for the private sector. Thousands of businesses have been destroyed, occupied or forced to shut down. Many companies have lost property, markets, staff, and investments. In this context, the questions are compensation for business losses is becoming one of the key challenges to Ukraine's economic recovery.

Scale of business losses

According to the government and international research organizations, the total direct and indirect losses of Ukrainian business are already estimated at tens of billions of dollars. The main categories include:

• 🏭 destruction of production facilities and warehouses;

• 🏢 destruction of offices, shopping and logistics centers;

• 🚛 loss of vehicles and equipment;

• 🌾 damage to agricultural land and equipment;

• 💸 suspension of contracts, disruption of logistics, and loss of customer base.

For many companies, these losses mean not just a drop in profits, but risk of complete liquidation of the business.

Ukrainian and international compensation strategy

Ukraine is already laying down legal mechanisms for future compensation:

1. National register of losses - collecting evidence and documents confirming the damage caused by the war. Businesses can submit information about destroyed or damaged property, lost assets, and other losses.

2. International compensation mechanism - A special fund is expected to be created under the auspices of the UN, the EU and other international partners. Its task will be to Reviewing applications from affected individuals and companies and payment of compensation from frozen Russian assets abroad.

3. Precedents in international law - There is a practice of establishing similar compensation commissions after military conflicts (for example, the UN Compensation Commission after the Gulf War). This gives Ukraine arguments for building its own model.

Challenges along the way

Despite the political support for the idea, businesses should be aware of the difficulties:

• ⚖️ legal procedures will be lengthy - The compensation mechanism is still under development;

• 📑 Documentation of losses is critical - Without clear evidence (acts of destruction, photos, accounting), it will be almost impossible to obtain compensation;

• 🌍 the issue of funding sources - frozen assets of the Russian Federation may become the main base, but their use requires international solutions.

What should businesses do now?

1. Record all lossesphoto and video materials, inventory reports, certificates from local administrations, and expert opinions.

2. Keep records of losses in the accounting department: to recognize direct and indirect losses separately.

3. Submit data to state registers of losses.

4. Apply for legal support - attorneys will help you properly prepare documents for future international lawsuits.

5. Monitor the formation of international mechanisms - as the application for compensation will have clear deadlines and procedures.

Prospects

The international community has already made it clear: Russia must pay for the damage caused. Although the process may take years, the creation of a compensation mechanism is a realistic prospect. For Ukrainian businesses, this is a chance to receive partial or full compensation for losses and resume economic activity.

Conclusion.

Compensation for the damage caused by the war is not only a matter of justice, but also the key to Ukraine's economic recovery. Businesses should be actively preparing today: collecting evidence, recording losses and consulting with lawyers. Only systematic preparation will make it possible to maximize the opportunities of the future international compensation mechanism.