Head of ILI: Sanctions violators should help finance Ukraine's reconstruction

Fines imposed for sanctions evasion currently remain in the countries that enforce them. The Institute of Legislative Ideas (ILI) proposes that these funds be directed toward Ukraine's reconstruction. Tetiana Khutor, Head of the Institute of Legislative Ideas, made this proposal during a meeting between Ukrainian think tanks and David O'Sullivan, the European Union's Special Envoy for Sanctions, organized by KSE Institute.

David O'Sullivan is one of the European Union's leading diplomats responsible for coordinating the EU's international sanctions policy and cooperation with partner countries in combating sanctions evasion.

During the discussion, Khutor emphasized the need to establish a systematic compensation mechanism that would channel fines and confiscated assets from sanctions violators toward Ukraine's recovery. Such a mechanism could become an additional source of reconstruction funding while strengthening accountability for those who help Russia sustain its war by circumventing sanctions and gaining access to prohibited goods, technologies, or financial services.

"At present, fines collected from sanctions violators generally remain in the budgets of the countries that investigate and prosecute sanctions evasion. There have already been positive examples: the United States and Lithuania have transferred more than USD 6 million to Ukraine. However, this should become a systematic mechanism," the Head of ILI said.

Participants also discussed the key challenges facing sanctions policy, including countering sanctions evasion, disrupting supply chains of critical components to Russia, addressing financial schemes used to circumvent restrictions, reducing Russia's energy revenues, and strengthening coordination of sanctions policy between Ukraine, the European Union, and international partners.

For the Institute of Legislative Ideas, it is essential that sanctions enforcement produces tangible benefits for Ukraine. Those who help Russia circumvent sanctions and sustain its war should contribute to rebuilding the country they have helped to harm.