International Register of Damage: Addition to eRecovery or Alternative?

In April, Ukrainians were able to submit claims to receive compensation for losses for damaged or destroyed housing in the Register of Damage Caused by the Aggression of the Russian Federation against Ukraine. Currently, this is not a full-fledged alternative to eRecovery, but the opportunity to claim the part of compensation that is not covered by the state. But with the opening of the possibility of submitting claims for other categories of losses, the Register will become an independent and full-fledged mechanism for obtaining compensation.

However, before that, it is necessary to improve the specialized legislation because one of its requirements limits the possibility of applying to the Register for those who received compensation from the state for damaged property.

On April 2, Ukrainians were granted an opportunity to apply for compensation to the international Register of Damage Caused by the Aggression of the Russian Federation against Ukraine. So far, it extends only to damaged and destroyed property.

The Register of Damage is the first of the three components of the future international compensation mechanism for damages caused by Russia. It will collect, process, categorize, and record the claims of victims. But it will not directly consider claims for damages or decide how any payments or compensations will be distributed. However, the Register is not only a set of data and documents that certify the damage from the wrongful acts of Russia, but primarily an international organization operating within the institutional framework of the Council of Europe.

In March 2024, the Board of the Register (the body responsible for including applications on damages in it) and the Conference of Participants (the governing body of the Register) adopted and approved the key documents for the launch of the institution:

1. Rules Governing the Submission, Processing and Recording of Claims (hereinafter referred to as Claims Rules)
2. Categories of Claims Eligible for Recording.

These and other documents have shed light on the conditions and limitations for submitting claims to the Register of Damage, and how it is connected to the eRecovery program. At the same time, their analysis made it possible to identify inconsistencies in the specialized legislation that may limit those who received compensation for destroyed housing in applying to the Register.

Who will be able to submit a claim in the Register, and for which categories of damages?

As stipulated by the agreement on the establishment of the Register of Damage, the right to submit a claim will be granted to:

–       individuals (both citizens of Ukraine and foreigners);

–       legal entities (including non-residents);

–       the state of Ukraine (represented by state or local authorities, enterprises, institutions and organizations under their management).

Each of these entities will be able to submit a claim or several claims for a certain category of damages.

For individuals, as many as 21 categories are provided for.

Notably, in its proposals, the Government of Ukraine suggested a broader classification of damage and loss categories than the one approved. In particular, the list does not include damage to mental health or damage and harm associated with the inability to receive social and administrative services.

The issue of extending the right to submit claims, in particular regarding violations of personal inviolability, to servicemen remains unclearly defined: whether all of them will receive it (as provided for in the government proposals) or only those mobilized, that is, not professional servicepeople (as noted by the executive director of the Register).

The business will also be entitled to file a claim for 12 categories of damages.

However, the categories depicted are not final, they may change and/or be clarified in the course of the Register’s activities.

Due to the significant number of categories, the Register will be filled in gradually. Since April 2, individuals–owners of damaged or destroyed housing have been the first to receive the right to submit a claim. Such a decision is logical because, according to the damage and needs assessment report developed in cooperation with the Government of Ukraine, the World Bank Group, the European Commission, and the United Nations, it is the housing infrastructure sector that has been affected the most during the full-scale invasion. Its losses are estimated at USD 56 billion. In addition, the vast majority of this category of persons have already undergone the procedure for submitting claims for compensation under the eRecovery program, which reduces the risk of technical and other difficulties in submitting claims to the Register of Losses.

Other categories are planned to be introduced soon: statements from persons most affected by the war (probably those who were injured, as well as victims of violence and torture) and statements related to damage or destruction of critical infrastructure objects.

Conditions for accepting applications, and the problem the owners of the destroyed property face

The criteria for admissibility of claims are defined by the Charter of the Register of Damage, as well as enshrined in the Rules Governing the Submission, Processing and Recording of Claims, which were developed by the Board of the Register of Damage and approved by the representatives of the countries participating in the Register of Damage.

Claims must be submitted in respect of losses or damages inflicted:

–       starting on or from February 24, 2022;

–       on the territory of Ukraine within its internationally recognized borders, including its territorial waters;

–       by wrongful acts of Russia in Ukraine or against Ukraine.

The Government of Ukraine approved a separate procedure for submitting such claims, which clarified the conditions for their submission. It covers:

–       registered ownership rights to a damaged/destroyed object in the State Register of Real Rights to Immovable Property;

–       mandatory availability of a commission inspection certificate for damaged and destroyed property;

–       restrictions on the submission of a claim by a person who is sanctioned in accordance with the Law of Ukraine on Sanctions, or who has a criminal record for committing criminal offenses provided for in Section I Crimes against the Foundations of National Security of Ukraine of the Special Part of the Criminal Code of Ukraine.

However, the mandatory availability of registered ownership rights to the destroyed object can become an obstacle for those who have already applied for compensation within the framework of the eRecovery program. Ukrainian legislation requires the termination of ownership rights to the destroyed object until compensation is received within the framework of the eRecovery program. But the state might compensate the cost of the destroyed object not in full, and then, due to the termination of ownership rights to housing, the person will no longer be able to count on their claim being accepted in the Register of Damage to receive the rest of the compensation.

As part of the electronic interaction between the Register of Damaged and Destroyed Property and the Register of Damage, the latter may receive information about the termination of ownership rights to the destroyed housing by citizens who have received compensation under the eRecovery program. Therefore, it is advisable to amend the Procedure for submitting claims to the Register of Damage, which will provide for the non-extension of requirements regarding registered ownership rights to the claims of Ukrainians who have already received assistance from the state.

Register of Damage and eRecovery

One of the key issues when submitting a claim will be determining the amount of compensation for damaged/destroyed property. This is especially relevant for those Ukrainians who have received or will seek assistance within the framework of the eRecovery program.

In accordance with the approved claim form for damage or destruction of residential immovable property, the claimant must indicate the estimated amount of payment, as well as information on the determined and paid compensation by the state. In addition, the Diia portal states that the claimant, when filling in the form, must indicate the desired amount of compensation that they want to receive in addition to the payment under the eRecovery program.

In addition, a prerequisite for submitting a claim to the Register of Damage is the availability of a commission inspection certificate regarding damaged and destroyed property. Such a certificate can only be received after submitting a notice of such property through the eRecovery service.

Therefore, today, the submission of a claim to the Register of Damage for damaged or destroyed housing is directly related to the eRecovery program and, in fact, is not an alternative, but an opportunity to receive part of the compensation for losses that are not compensated by the state.

However, it is planned that later the service will be available for those who are not able to use the eRecovery program, and an inspection certificate could be obtained from a commission under the local authority.

Who checks and enters the claim in the Register?

The Secretariat of the Register will consider the claims received for compliance with the eligibility criteria and prepare recommendations to the Board on the inclusion of claims in the Register.

The Board of the Register has the final authority in determining the eligibility of claims for inclusion in the Register. Based on the consideration of claims, the Board may:

–       record the claim for submission;

–       not record a claim stating which admissibility criteria were not met and whether such rejections are “with prejudice” (preventing resubmission of the same claim) or such rejections are “without prejudice” (allowing resubmission with additional information, evidence, or with deficiencies rectified);

–       return the claim for further processing by the Secretariat with instructions, which may include a request for rectifications, clarifications, additional information, or evidence from the claimants.

What’s next?

The Register of Damage is only the first of three components of the future international compensation mechanism for damages caused by Russia. It has no jurisdictional authority to decide on the claims made, including determining liability and awarding any payment or compensation.

At least 6–8 million claims are expected to be submitted to the Register, and the amount of compensation for them will be enormous. But according to the forecast of the Executive Director of the Register, compensation at the expense of the aggressor should not be expected in 2024. First of all, due to the lack of progress in the creation and filling of the compensation fund.

It is obvious that without the aggressor’s consent to pay reparations, the main potential source of replenishment of the compensation fund remains the frozen assets of Russia, and the shift in the issue of transferring income from these assets to Ukraine gives grounds for cautious optimism.

Before that, we recommend that the government improve the Procedure for submitting claims to the Register of Damage and determine in it that the condition of registered ownership rights to the destroyed real estate object in order to submit a claim does not apply if a person has received compensation for such property under the eRecovery program.

As far as we know, a functionality that will help solve this problem is being developed. However, the regulation is planned to be updated simultaneously with its launch.

The material was prepared within the framework of the USAID/UK aid TAPAS Project/Transparency and Accountability in Public Administration and Services.