Ukraine finalises legal changes to implement US mineral agreement

The Verkhovna Rada has approved in its second and final reading amendments to Ukraine's Budget Code, which are necessary for implementing the mineral resources agreement with the United States. 

"The Rada has finally approved amendments to the Budget Code for the implementation of the mineral resources agreement. 309 votes in favour. The text changed very little between the first and second readings," Member of Parliament Yaroslav Zheleznyak wrote on his Telegram channel.

Earlier, MP Oleksiy Honcharenko noted that to implement the terms of the agreement, Ukraine would need to amend not only the Budget Code but also possibly the Tax Code and several other pieces of financial legislation. Zheleznyak, for his part, stated that around 20 laws would need to be amended for the agreement with the US to be fully implemented.

On May 1, the Ukrainian Cabinet of Ministers published the text of the signed agreement on subsoil use with the US.

Many media outlets and MPs, after analysing the document’s provisions, expressed dissatisfaction with the terms of the deal, noting that it could result in Kyiv ceding part of its economic sovereignty.

They also pointed out that the agreement does not include the security guarantees that had been widely discussed by President Volodymyr Zelenskyy's office. In addition, parliamentarians were outraged that the Rada had not been presented with two additional documents referenced in the main agreement text. Nevertheless, on May 8, the Rada ratified the agreement with the US, and President Zelensky formally endorsed the ratification on May 12.

Following the signing of the agreement, Ukraine’s First Deputy Prime Minister and Minister of Economy, Yuliya Svyrydenko, stated that Kyiv would contribute 50% of all revenues from new royalties and new mineral extraction licenses on new sites to the newly established bilateral investment fund. According to her, the US and Ukraine will have equal voting rights in managing the fund.

The deal does not create direct debt obligations for Ukraine to the US. During the first 10 years, the fund will not pay dividends, and all revenues will be reinvested in Ukraine. Investments will focus on the extraction and processing of mineral resources, as well as infrastructure development.

By Tamilla Hasanova