The United States and Ukraine are set to sign a mineral agreement that could potentially be a cornerstone in ending the Russia-Ukraine war, bringing a conclusion to the conflict that has lasted over three years. On Wednesday, various foreign media outlets each cited sources to reveal the specific details of the agreement, providing an insight into what kind of “security guarantees” the U.S. might offer and how the proceeds from mineral resources could be utilized.
According to reports from Ukrainian media outlet “Kyiv Independent”, they obtained the complete text of the mineral agreement from Ukrainian government sources and have publicly disclosed the entire text. The report stated that the U.S. initially presented three proposals, with the first two being rejected by Ukraine due to their lack of security provisions.
Moreover, several media outlets including Reuters and Radio Free Europe have indicated that they have obtained a copy of the agreement dated February 25th, compiling key terms of the agreement.
Combining reports from various media sources, the following outlines the current understanding of the agreement among the public:
1. The agreement is named the “Bilateral Agreement Establishing Terms And Conditions For A Reconstruction Investment Fund.”
2. It explicitly mentions the “Russian invasion of Ukraine.” The preamble of the agreement mentions the significant financial and material support provided by the U.S. to Ukraine since the comprehensive Russian invasion of Ukraine in February 2022. It also acknowledges Ukraine’s voluntary relinquishment of the world’s third-largest nuclear arsenal, contributing to international peace and security.
3. The two countries will establish a reconstruction investment fund to collect revenues from Ukrainian resources and reinvest them. Both countries’ representatives will jointly manage the fund, with specific details to be further clarified in the “Fund Agreement.”
4. The Ukrainian government commits to allocating 50% of the revenue obtained from natural resource development to the fund (excluding revenues currently included in the general Ukrainian budget). These resources include minerals, hydrocarbons, oil, natural gas, liquefied natural gas terminals, port infrastructure, among others, with the specific scope to be determined in the “Fund Agreement.”
5. The representatives of both countries will immediately draft the text of the “Fund Agreement” to further clarify the terms of the U.S.-Ukraine Reconstruction Investment Fund. The document will require approval from the Ukrainian parliament.
6. The fund may have discretion to refund or compensate the actual costs incurred by the Ukrainian government in developing new projects.
7. The fund will focus on investing in Ukrainian projects to attract investments from public and private assets, including natural resources, infrastructure, ports, and state-owned enterprises.
8. The fund will reinvest “at least once a year” in Ukraine to promote “Ukraine’s security, safety, and prosperity.”
9. The U.S. government supports Ukraine’s efforts to obtain the necessary security guarantees for establishing lasting peace. However, the agreement does not mention specific security assurances that Ukraine is seeking.
10. The U.S. government will maintain long-term financial commitments to assist Ukraine in building a stable and prosperous economy in accordance with applicable U.S. laws. Additional aid from the U.S. may include funds, financial instruments, and other tangible or intangible assets to support Ukraine’s reconstruction.
11. The agreement includes “concrete steps towards establishing lasting peace and enhancing economic security resilience.”
12. When drafting the Fund Agreement, efforts will be made to avoid Ukraine violating the obligations undertaken when joining the European Union and conflicting with obligations to international financial institutions.
13. The agreement stipulates that without the consent of the other party, neither side can “sell, transfer, or otherwise dispose of” any part of the fund. In other words, unilateral withdrawal by either party is prohibited.
However, there are still many unanswered questions surrounding the agreement. These key issues include how joint ownership of the fund will be distributed and the details of the “management and operation” of the fund, which are pending further clarification in the “Fund Agreement.”