Anna Bukvych, Deputy Chair of the UBA International Law Committee, attorney, Ph.D. in Law, and Legal Manager at Alter Domus (Luxembourg), provided her analysis of the ratified mineral resources agreement in a recent commentary for Interfax-Ukraine.

According to Anna, the ratified mineral resources agreement appears to be a standardized investment contract, free from discriminatory or disadvantageous provisions.

“Almost all unfavorable conditions for Ukraine, particularly those concerning the return of provided assistance, have been excluded from the agreement. As it stands now, it appears to be a more standardized investment agreement without discriminatory or disadvantageous clauses. In essence, it is an investment agreement involving Ukraine, where the United States holds priority rights. However, the specifics of how these U.S. rights will be enforced remain unclear at this stage,” she told Interfax-Ukraine.

Anna emphasized the importance of the clearly defined list of mineral resources included in the agreement, which cannot be unilaterally altered.

“Therefore, the United States cannot change this list without Ukraine’s consent. Equally significant is the fact that the agreement pertains only to revenues from new deposits, which is a critical aspect. Any revenues from deposits that have already been licensed are not part of these agreements. This effectively eliminates the risk of reallocating funds that currently flow into the state budget,” she noted.

Anna further pointed out that, as of now, the available versions of the agreement do not present risks to Ukraine’s sovereignty. The current text is structured as a beneficial investment contract, free from additional restrictions on Ukraine’s rights or mechanisms of external control.

“While the U.S. assistance might influence the size of Ukraine’s contributions to the joint investment fund, this is more a matter of economic advantage for the United States rather than a direct impact on sovereignty,” she added.

She also highlighted that “most critical issues concerning the joint fund’s management and investment of its revenues are to be decided jointly by Ukraine and the United States. Moreover, revenues from previously licensed deposits are not included in the joint fund.”

“I do not rule out that certain risks may have been included in earlier versions of the agreement, but as we understand, the text has been significantly revised. Despite the absence of technical cooperation documents, it is unlikely that these will contain substantial deviations from what has already been signed,” Anna noted.

Anna Bukvych anticipates that since dispute resolution under investment agreements is governed by separate investment arbitration mechanisms, this approach will likely be applied in resolving disputes arising from this agreement as well.

Commenting on potential sovereignty constraints, the expert noted that, in its current form, the agreement does not appear to violate any sovereign rights. It is rather about joint management of the investment fund, with certain U.S. investment preferences.

“It is essential to debunk some myths: the ownership rights over mineral resources remain with Ukraine. Furthermore, the United States will not have decisive rights over fund management or license issuance. All such matters, including fund contributions, will be handled jointly. Moreover, the list of deposits cannot be changed unilaterally without Ukraine’s consent. Importantly, the agreement only covers revenues from new deposits, which is vital for Ukraine, as these payments currently contribute to the state budget,” she emphasized.

At the same time, Anna noted that while technical details regarding fund management are important, the current text clearly does not impose restrictions on Ukraine’s sovereign rights.

“As part of the agreement, a series of technical documents will be developed and signed to regulate the terms of cooperation in more detail. It is in these technical documents that certain practical risks may arise, as they will likely be far more extensive than the main text of the agreement itself. Establishing such an investment fund is an extremely complex and lengthy process, and in this case, the technical details of fund management will be critical,” she concluded.