By Pavel Polityuk
KYIV (Reuters) - Ukraine's efforts to ensure it receives compensation from Russia for damage caused by its invasion are being hampered by allies' concerns about the legal precedents that might be set, a senior Ukrainian official said.
Kyiv is trying to secure an international agreement setting a legal basis for Russian assets frozen by other countries - notably billions of dollars in Russian central bank assets - to be transferred to Ukraine to help rebuild the country.
But, offering a rare insight into Kyiv's negotiations with its partners, deputy justice minister Iryna Mudra said some countries were worried about setting a precedent that would put their own assets at risk, by opening them to compensation demands over past conflicts in which they were involved.
Ukraine says receiving compensation from Russia is vital for its future. The government said at the start of this year that damage to the economy from Russia's invasion on Feb. 24, 2022, had passed $700 billion - money that it does not have.
"We have no option but to make Russia pay reparations. If it doesn't do it voluntarily, (let's) fill a (compensation) fund with Russian money, foreign exchange reserves, Russian assets," Mudra told Reuters in an interview this week.
"They (some countries) are afraid that a precedent could be set... that their foreign assets could be affected."
She did not identify the countries that had expressed such concerns but said Ukraine was trying to allay their fears.
"This treaty will be exclusively for the situation of an egregious war of aggression" in breach of the founding U.N. Charter and International Court of Justice rulings "so that it cannot be used for other conflicts," she said.
RUSSIA REJECTS U.N. RESOLUTION
Negotiations are being held following the U.N. General Assembly's adoption of a resolution in November calling for Russia to be held accountable for its invasion and recognising Russia is responsible for reparations in Ukraine.
It also recommended the creation by member states and Ukraine of a register to document information on damage, loss or injury caused by the invasion, which has killed thousands of civilians, uprooted millions and destroyed cities.
The West froze around half - or more than $300 billion - of Russia's international reserves after Moscow's invasion.
Moscow says it will do everything possible to stop the West "plundering" state assets to pay for reparations to Ukraine, and Russia's U.N. ambassador said the provisions of the U.N. resolution were "legally null and void".
Despite the obstacles ahead, Mudra said Ukraine hoped that an international mechanism for compensating Ukraine would be established within a year.
She also said she hoped an agreement on the creation of an international register of damage in Ukraine would be announced in May, and signed by foreign partners - including all the Group of Seven wealthy nations - by the start of June.
"This is the first - and an extremely important - step in the creation of this compensation mechanism," Mudra said.
"The process has started. It's inevitable, there's no way back."