The U.S.-Ukraine Reconstruction Investment Fund will serve as an essential mechanism for safeguarding foreign investments in Ukraine. According to Olesia Kryvetska, Chair of the UBA Committee on International Trade Law, the agreement contains several provisions aimed at ensuring the stability of investment conditions, including guarantees to protect investors’ rights even in the event of legislative changes. She elaborated on these legal mechanisms in a recent comment to Interfax-Ukraine.

The agreement between Ukraine and the United States on establishing the U.S.-Ukraine Reconstruction Investment Fund obligates Ukraine to ensure the protection of its assets and investments regardless of any legislative changes.

“The Fund Agreement includes provisions consistent with the established practice of international investment treaties. One example is the so-called stabilization clause, or guarantee in the event of legislative changes. This clause requires Ukraine to ensure that assets and investments remain protected under the terms of the Fund Agreement, regardless of any subsequent changes in legislation,” Kryvetska said in a comment to Interfax-Ukraine, noting that similar provisions exist in Ukraine’s law on the legal regime for foreign investments.

Additionally, Kryvetska highlighted that the agreement enshrines the right of the U.S. side to negotiate the purchase of extracted resources (offtake arrangements). This provision secures export markets for Ukraine and underscores the economic viability of investment projects involving relevant deposits. On the other hand, this clause reflects U.S. interest in accessing critical raw materials for its own processing needs.

“This is where U.S. national interests come into play – the development of strategic sectors and access to critical minerals. In this context, it is important that the agreements between Ukraine and the United States also consider Ukraine’s needs in developing its own processing industries and value-added manufacturing,” Kryvetska said.

At the same time, she noted the significance of the U.S. intention not to impose additional tariffs on resources extracted through fund projects.

“Given the tariff policies of the Trump administration, this is an important preference. However, it should be noted that the agreement, in its wording, does not contain a binding legal obligation, but rather states that the U.S. Government ‘expresses its expectation.’ Therefore, the effectiveness of this preference remains to be seen in the future,” the UBA Committee Chair added.

Kryvetska also emphasized that under the fund agreement, disputes should be resolved through mutual consultations. According to her, this is a significant feature of the agreement, as it differs from traditional international investment treaties that often include investment arbitration as a dispute resolution mechanism.

As an example, the lawyer referred to the 1994 U.S.-Ukraine bilateral investment treaty, which includes a so-called “umbrella clause,” which, in the opinion of some arbitrators and experts, is intended to extend the scope of the treaty to cover any obligations concerning investments undertaken by the host state (in this case, Ukraine) with respect to investments of the other party (the U.S.).

“Thus, if at some point the United States perceives a breach by Ukraine, the fund agreement potentially creates an asymmetric situation for Ukraine: Washington could attempt to protect its violated rights through arbitration, invoking the 1994 investment treaty, while Ukraine, as the host state, would have only the consultation mechanism provided for in the fund agreement to defend its own rights,” Kryvetska stressed.