PUBLIC REVENUES FROM FORCIBLY SEIZED ASSETS: CLASSIFICATION, BUDGETARY ACCOUNTING, AND TARGETED ALLOCATION

Abstract

The article examines the financial and legal nature of public revenues generated through the compulsory seizure of assets belonging to the aggressor state, its residents, and affiliated persons. These revenues originate from diverse sources, including the compulsory expropriation of property under special sanctions legislation, international compensation mechanisms (reparations), and profits derived from the management of frozen assets (so-called windfall profits). It is argued that such revenues do not fall within the traditional categories of tax or transfer income, but possess a public and compulsory nature, thus requiring their recognition as a separate subcategory within non-tax revenues of Ukraine’s budget system. The article analyzes the provisions of the Budget Code of Ukraine, the practice of the Recovery Fund for the Elimination of the Consequences of Armed Aggression, and the international approaches of the EU and the G7. Particular attention is paid to the lack of a unified legislative model regulating the status of seized assets, which results in fragmented budgetary accounting and risks of non-transparent use. The author substantiates the necessity of introducing a distinct budgetary subcategory of “sanction-compensatory revenues”, which would reflect the specific nature of such funds, ensure transparent accounting, targeted allocation, and effective oversight. A conceptual model is proposed to cover revenues from special confiscation, compulsory expropriation under sanctions, international reparations, and profits from the investment of frozen assets.The study concludes that the formalization of sanction-compensatory revenues as a separate budgetary category is consistent with international practices, strengthens Ukraine’s financial sovereignty, and enhances the trust of international partners. The article has an interdisciplinary character, combining elements of financial, international, and constitutional law, which provides a comprehensive perspective on the legal nature and future prospects of such revenues.