Oleksandr Marusiak, Dr. iur., is a Research Fellow at Donetsk State University of Internal Affairs (Ukraine) and a Visiting Scholar (pro bono) at Southern Methodist University Dedman School of Law (Dallas, Texas, USA) in 2023-2024

On 31 January 2024, the International Court of Justice “ICJ” or the “Court”), the principal judicial organ of the United Nations, delivered Judgment on merits in the case concerning Application of the International Convention for the Suppression of the Financing of Terrorism and of the International Convention on the Elimination of All Forms of Racial Discrimination (Ukraine v. Russian Federation). In respect of the International Convention for the Suppression of the Financing of Terrorism (the ICSFT or “Convention”), the Court found that the Russian Federation has only violated its obligation under Article 9, paragraph 1, of the ICSFT, however rejected all other submissions made by Ukraine under the said Convention. 

“Funds” Fatality

One of the most crucial points of the Judgment in respect of claims under the ICSFT was a narrow interpretation of the term “funds” (paras. 40-53). This term is defined by Article 1, paragraph 1, of the ICSFT as “assets of every kind, whether tangible or intangible, movable or immovable, however acquired, and legal documents or instruments in any form…”. In particular, the Court concluded that the term “funds” in the ICSFT refers to resources provided or collected for their monetary and financial value and does not include the means used to commit acts of terrorism (including weapons or training camps). Hence, the alleged supply of weapons to various armed groups operating in Ukraine, and the alleged organization of training for members of those groups, fall outside the material scope of the ICSFT.

Since most of Ukraine’s claims were based on a broad understanding of the term “funds”, there is no doubt that ICJ’s narrow interpretation of this term, combined with other factors, affected the case’s outcome – rejection of Ukraine’s numerous claims under the ICSFT. 

Concerning “funds” interpretation, only two ICJ judges – Bhandari and Charlesworth – and judge ad hoc Pocar explicitly advocated a broad interpretation of the term “funds” and blamed ICJ for undermining the object and purpose of the ICSFT. For instance, Bhandari invited an imaginable reader to read and reflect on an obvious meaning of “assets of every kind”: “One could stop here. The term “assets of every kind” means “assets of every kind.” Charlesworth noted that the broad interpretation was consistent with the drafting history of the Convention, which suggests that the term “funds” was understood as synonymous with the term “property”. Pocar observed that the Judgment, in fact, understood the “assets of every kind” as “assets of some kind”. 

On the contrary, the majority of judges – including Tomka, Sebutinde, and judge ad hoc Tuzmukhamedov – supported ICJ in its interpretation of ICSFT. Tomka criticized the Court’s refusal to interpret this term at the earlier stage of the proceedings: “Had the Court followed my approach and the principle of procedural economy (…), it could have spared the Parties unnecessary submissions…”. Sebutinde clearly articulated that the term “funds” did not encompass the provision of weapons or other forms of support used as means of committing predicate acts. Tuzmukhamedov additionally provided a detailed explanation of why the Court was correct in establishing the narrow meaning of “funds”.

Why Bother?

The established jurisprudence concerning the “funds” concept presents far-reaching consequences for the practical application of the ICSFT beyond the mentioned case. Appropriate actions toward the suppression of terrorism in the modern age of hybrid warfare can hardly mean dealing only with financial assets. The exclusion of weapons and other objects typically used in terrorist acts from the meaning of “funds” indeed complicates the future effectiveness of the ICSFT concerning necessary counteractions against terrorism in all its forms and manifestations on a global scale. That is why, it is plausible to ask the following question: Did ICJ erroneously limit the material scope of the ICSFT, or this Convention was intentionally designed not to cover weapons and/or other means for terrorism? 

The phrase “assets of every kind” as such from the “funds” definition may indeed be misleading since it creates a false impression that “funds” encompasses literally everything. However, thoroughly navigating through all clauses of the ICSFT in all official languagesand its drafting history can change the initial perception of “funds”. Careful examination of the title of the Convention, its preamble, full definition of “funds”, which includes reference to legal documents and instruments, and analysis of, at least, Articles 8, 12, 13 and 18 of ICSFT makes clear that this Convention addresses only one aspect of terrorism – terrorism financing – rather than combatting terrorism in general.

As for travaux préparatoires, it is hard to object that different, sometimes contradictory, ideas on the material scope of the ICSFT have been discussed in all drafting stages, including those that would have greatly benefited Ukraine’s claims if adopted. Nevertheless, if the drafters of the Convention had wanted to design measures, say, specifically aimed against arms trafficking, would they have included at least some clear references on the subject in the final version of ICSFT? Since it is not a rhetorical device, the conclusion is simple: the material scope of ICSFT is indeed limited and ICJ did not want to revolutionise the meaning of “funds” contrary to the original concern of the ICSFT drafters.

Follow-Up Thoughts

Despite the ICJ’s narrow approach to the term “funds” can be criticized, it is important to remember that this Court would unlikely pursue non-obvious interpretations of applicable international treaties if an obvious interpretation is already available. On one hand, ICJ recognized that the term “funds” covers more than traditional financial assets, extending them to a broad range of assets that are exchangeable or used for their monetary value and may include even the provision of land or real estate. On the other hand, assets used for terrorism financing and assets used as means of terrorism are not the same. Nevertheless, the challenges with the limited material scope of the ICSFT in this case demonstrate that there is an urgent need for the revision of current international instruments in counteracting terrorism. Perhaps this case before ICJ will be a starting point for this process.