The agreement between Ukraine and the United States on the Reconstruction Investment Fund will be developed separately and will have to be ratified by the Verkhovna Rada. The current agreement on establishing the rules and conditions of the Reconstruction Investment Fund, that is, the procedural agreement, will not require ratification by the parliament. It will be approved by the Cabinet of Ministers and signed by Economy Minister Yulia Svyrydenko on the Ukrainian side and US Treasury Secretary Scott Bessant on the American side.
"The next agreement will be more complex and serious. Because the next agreement will be about the fund, about money, and there it will have mandatory ratification in the Ukrainian parliament," Zelenskyy noted.
The current edition, as stated in the material on the "EP", this is an agreement establishing the rules and conditions of the Reconstruction Investment Fund with the aim of deepening the partnership between the US and Ukraine. All the details will be in the next separate agreement on the Investment Fund. However, this agreement on the rules already stipulates that it is “binding” and will be implemented by each participant “in accordance with their internal procedures”. Which ones exactly are not specified.
Partnership in the Investment Fund will be ensured through joint ownership, which will take into account actual contributions from Ukraine and the United States. The Fund will be managed jointly by representatives of the governments of Ukraine and the United States.
It is provided that neither Ukraine nor the United States will sell, transfer, or otherwise dispose of, directly or indirectly, any portion of its interest in the Fund without the prior written consent of the other party to the agreement.
The Fund will collect and reinvest the income contributed to the Fund, net of expenses incurred by the Fund, and will earn income from the future monetization of all relevant natural resource assets owned by the state of Ukraine (regardless of whether they are directly or indirectly owned by the state of Ukraine), according to the following rules.
The Government of Ukraine will contribute to the Fund 50% of all revenues received from the future monetization of all relevant natural resource assets that are in the state ownership of Ukraine (regardless of whether they are in the direct or indirect state ownership of Ukraine), defined as:
- mineral deposits,
- hydrocarbons,
- oil,
- natural gas
- other mining materials
- other infrastructure related to natural resource assets (such as liquefied natural gas terminals and port infrastructure).
It is specifically emphasized that this is about monetization for the future. Yes, these future sources of revenue do not include current sources of revenue, which are already part of the general revenues of the budget of Ukraine.
At its sole discretion, the Fund may credit or reimburse the Government of Ukraine for actual costs incurred under newly created projects from which the Fund receives income.
Contributions made to the Fund will be reinvested “at least annually” in Ukraine to promote the security, defense, and prosperity of Ukraine. The manner in which this is done will be further specified in the Fund Agreement. The Fund Agreement will also have provisions for future dividends.
It also provides that the U.S. Government will support long-term financial commitments for Ukraine's development. Further contributions may consist of funds, financial instruments, and other tangible and intangible assets critical to Ukraine's reconstruction.
The Fund's investment process will be designed to invest in projects in Ukraine and attract investment to increase the development, processing and monetization of all public and private assets, including, but not limited to, the following:
- mineral deposits,
- hydrocarbons,
- oil,
- natural gas
- other mining materials,
- infrastructure,
- ports
- state-owned enterprises, as may be further described in the Fund Agreement.
The U.S. and Ukrainian governments intend that the investment process will lead to opportunities for additional allocations and greater reinvestment to ensure sufficient capital inflows for Ukraine’s reconstruction.
At the same time, participants reserve the right to take necessary actions to protect and maximize the value of their economic interests in the Fund.
The Fund Agreement shall include appropriate representations and warranties, including those necessary to ensure that any obligations that the Government of Ukraine may have to third parties, or such obligations that it may assume in the future, shall not result in the sale, transfer, assignment, pledge or other encumbrance of the Government of Ukraine's contributions to the Fund, or the assets from which such contributions are derived, or the disposition of funds by the Fund.
When developing an agreement on the Fund, the participants will seek to avoid conflicts with Ukraine's obligations under its accession to the EU or its obligations under agreements with international financial organizations and other official creditors.
In the future, participants will seek to identify any necessary steps to protect mutual investments.
We also provide the full text of the document:
1. The Governments of Ukraine and the United States of America, with the aim of achieving lasting peace in Ukraine, intend to establish a Reconstruction Investment Fund (the Fund) by establishing a partnership in the Fund through joint ownership, as further defined in the Fund Agreement. Joint ownership will take into account the actual contributions of the Participants as defined in Sections 3 and 4. The Fund will be managed jointly by representatives of the Government of Ukraine and the Government of the United States of America. More detailed terms and conditions regarding the management and operation of the Fund will be set forth in a further agreement (the Fund Agreement) to be negotiated immediately after the conclusion of this Bilateral Agreement. The maximum percentage of ownership of the equity and financial interests of the Fund that will belong to the Government of the United States of America, as well as the decision-making authority of representatives of the Government of the United States of America, will be within the limits permitted by applicable United States law.
None of the Participants will sell, transfer or otherwise dispose of, directly or indirectly, any part of its interest in the Fund without the prior written consent of the other Participant.
2. The Fund shall collect and reinvest the income contributed to the Fund, net of expenses incurred by the Fund, and shall earn income from the future monetization of all relevant natural resource assets owned by the State of Ukraine (regardless of whether they are directly or indirectly owned by the State of Ukraine), as defined in Section 3.
3. The Government of Ukraine shall contribute to the Fund 50% of all revenues derived from the future monetization of all relevant natural resource assets that are in the state ownership of Ukraine (regardless of whether they are in the direct or indirect state ownership of Ukraine), defined as deposits of minerals, hydrocarbons, oil, natural gas and other extractable materials and other infrastructure corresponding to natural resource assets (such as liquefied natural gas terminals and port infrastructure) as agreed by both Participants, as may be further described in the Fund Agreement. For the avoidance of doubt, such future sources of revenues do not include current sources of revenues that are already included in the general revenues of the budget of Ukraine. The timing, amount and stability of the contributions shall be further specified in the Fund Agreement.
At its sole discretion, the Fund may credit or refund to the Government of Ukraine actual costs incurred under newly created projects from which the Fund receives income.
Contributions made to the Fund will be reinvested at least annually in Ukraine for the purpose of promoting the security, defense, and prosperity of Ukraine, as further specified in the Fund Agreement. The Fund Agreement will also contain provisions for future dividends.
4. In accordance with applicable United States law, the United States Government will support long-term financial commitments to develop a stable and economically prosperous Ukraine. Further contributions may consist of funds, financial instruments, and other tangible and intangible assets critical to Ukraine's reconstruction.
5. The Fund’s investment process will be designed to invest in projects in Ukraine and to attract investments to enhance the development, processing, and monetization of all public and private assets, including, but not limited to, mineral deposits, hydrocarbons, oil, natural gas, and other extractive materials, infrastructure, ports, and state-owned enterprises, as may be further described in the Fund Agreement. The Government of the United States of America and the Government of Ukraine intend that the investment process will result in opportunities for the distribution of additional funds and increased reinvestment to ensure sufficient capital inflows for the reconstruction of Ukraine, as will be specified in the Fund Agreement.
Participants reserve the right to take necessary actions to protect and maximize the value of their economic interests in the Fund.
6. The Fund Agreement shall include appropriate representations and warranties, including those necessary to ensure that any obligations that the Government of Ukraine may have to third parties, or such obligations that it may assume in the future, shall not result in the sale, transfer, assignment, pledge or other encumbrance of the Government of Ukraine's contributions to the Fund, or the assets from which such contributions are derived, or the disposition of funds by the Fund.
When developing the Fund Agreement, the Participants will seek to avoid conflicts with Ukraine's obligations under its accession to the European Union or its obligations under agreements with international financial organizations and other official creditors.
7. The Fund Agreement will include, among other things, a recognition that both the Fund Agreement itself and the activities envisaged therein are of a commercial nature.
The Fund Agreement will be subject to ratification by the Parliament of Ukraine in accordance with the Law of Ukraine "On International Treaties of Ukraine".
8. The Fund Agreement will pay particular attention to control mechanisms that will prevent the weakening, violation or circumvention of sanctions and other restrictive measures.
9. The text of the Fund Agreement shall be developed expeditiously by working groups chaired by authorized representatives of the Government of Ukraine and the Government of the United States of America. The contact persons responsible for the preparation of the Fund Agreement on the basis of this Bilateral Agreement are: for the Government of the United States of America: the Department of the Treasury; for the Government of Ukraine: the Department of Finance and the Department of Economy.
10. This Bilateral Agreement and the Fund Agreement will constitute integral elements of the architecture of bilateral and multilateral agreements, as well as concrete steps to establish lasting peace, strengthen economic and security resilience, and reflect the objectives set out in the preamble to this Bilateral Agreement.
The United States Government supports Ukraine's efforts to obtain the security guarantees necessary to establish a lasting peace. The participants will seek to identify any necessary steps to protect mutual investments as defined in the Fund Agreement.
11. This Bilateral Agreement shall be binding and shall be implemented by each Participant in accordance with their respective internal procedures. The Government of the United States of America and the Government of Ukraine undertake to commence negotiations immediately on a Fund Agreement.
Signed in English and Ukrainian, both texts being equally authentic.
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