New Challenges in the Ukraine-US Resource Agreement

Analyzing the new agreement between Ukraine and the USA, "EuroPravda" highlights potential risks to Ukraine's economic sovereignty and European aspirations.

Source: material from "EuroPravda" containing the text of the agreement

Details: The publication states that in February, US Treasury Secretary Scott Bessent raised a requirement that American companies would gain exclusive rights to develop Ukrainian resources, from ore to gas.

Only if no American investor shows interest, Ukraine is allowed to offer licenses to Ukrainian or European companies, but 50% of the license fee and rent still go to the Fund.

This is incompatible with Ukraine's existing agreements with the EU and the principles of competition within the European Union that Ukraine aims to join. The issue that appeared in the new version of the agreement had previously been resolved.

New strict limitations have been introduced in the agreement text, significantly affecting Ukraine's economic sovereignty. The document stipulates that American companies will have priority in all investments in Ukrainian natural resources and infrastructure.

Only if they refuse will Ukraine be able to invite other investors, including Europeans. However, the Ukrainian government is required to disclose all details of such negotiations to the USA.

Moreover, the agreement prohibits Ukraine from offering better terms to any other investor than those offered to the Americans if they refuse, for one year.

Specific provisions of the agreement obligate Ukraine to include in licenses for the extraction of "critically important minerals" a ban on their sale to buyers from countries identified by DFC (U.S. International Development Finance Corporation) as strategic competitors of the USA.

This could potentially include the European Union, creating a precedent where Ukraine, aspiring to join the EU, will have to limit trade with European partners.

The most controversial aspect is the provision that deprives Ukraine of control over the Fund, which will provide compensation to the USA for the assistance given:

• The general partner of the Fund will be appointed by the DFC without Ukraine's consent;
• The majority of the Fund's board will be composed of representatives from the USA, who can make decisions without the consent of Ukrainian representatives;
• Ukrainian representatives can only attempt to disrupt the quorum, but their nominations must also be approved by the DFC;
• The Fund, essentially financed by Ukrainian natural resources, will legally resemble an American organization. It will pay taxes in the USA, not in Ukraine.

If Ukraine has claims or wants to challenge the actions of the Fund, it will have to go to court in New York instead of Ukrainian courts.

Additionally, the Trump administration has reintroduced a requirement for Ukraine to reimburse all assistance provided by the USA after the onset of the full-scale invasion by Russia in 2022.

Ukrainian President Volodymyr Zelensky previously mentioned that the USA offered Ukraine a new version of the agreement regarding mineral resources, which will immediately require ratification in parliament.

On March 27, he stated that there is currently no final version of the agreement on the use of Ukrainian mineral resources with the USA, but its signing is expected soon.