US seeks strategic hold on Ukraine's resource investments
The United States is striving for control over investments related to Ukraine's mineral resource extraction and infrastructure. This could affect Ukraine's relations with the EU and other allies, as reported by Bloomberg.
What do you need to know?
- The United States wants to control investments: The U.S. plans to oversee all major investments in Ukraine's extraction and infrastructure sectors, which may impact relations with Kyiv's other allies.
- Draft agreement: The latest version of the U.S.-Ukraine agreement stipulates that the U.S. will have first refusal rights and control over the investment fund for Ukraine's reconstruction.
- Ukraine's reaction: Ukraine is expected to present its amendments to the American document, and discussions on the final shape of the agreement are ongoing.
What are the details of the U.S.-Ukraine agreement?
According to Bloomberg, the United States wants priority in investments in Ukraine, which would allow them to block Kyiv's other allies.
The draft agreement states that the United States will have rights to profits from the investment fund, which will be controlled by Washington. Importantly, the document states that the U.S. considers the "material and financial benefits" provided to Ukraine since Russia's full-scale invasion in February 2022 as its contribution to this fund.
As a result, this means that the Trump administration would require Ukraine to pay for all American military and economic support provided since the beginning of the war before Kyiv could earn any income from the partnership fund, Bloomberg reported.
What does this mean for Ukraine?
Ukraine, which obtained EU candidate status in 2022, may face difficulties in accession negotiations if the United States controls its investments.
Kyiv has already rejected American pressure to include Washington's support as a contribution to the joint fund. "We support cooperation with the US, we don’t want to give a single signal that can prompt the US to stop aid to Ukraine," said President Zelensky.
What are the terms of the agreement?
According to the draft, the American International Development Finance Corporation (DFC) would control the investment fund by nominating the majority of the board members.
Ukraine would be required to pay 50% of its revenue from new natural resources into the fund. The United States would have the right to purchase Ukrainian raw materials before other parties. The agreement does not provide a time limit, and Kyiv would not be able to sell minerals to the U.S.'s strategic competitors.
