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Notes -
Remzen has provided a link to a claimed copy of the agreement. If true, it reads like what people think the neocon fantasies had in mind in terms of Iraq and Oil, mixed with a bit of .
Even setting aside the article's own acknowledgement of potential changes, the undefined Fund Agreement and any other parallel agreements not formally combined in this one, there are some jumping out points that are interesting in how they can be interpreted in a more... 'if you can't see how a government could twist this, you haven't tried hard enough' sense.
Starting from the Article
'The fund agreement, which will be more specific than this first document, will be statutory law for the Ukrainian government.'
Which is to say, this document is the outlines, to be clarified in language fewer people will actually see.
Note, however, there is no claim that it will need ratification by the American Congress. So not a treaty, but...
Entering into the text itself-
'It will be statutory law in Ukraine for the government of the United States of America to have a significant* say in Ukrainian domestic resource projects going forward.' *Understatement to be elaborated later
This is your 'the US government, and not US commercial entities, will maintain major influence in the management of the fund, more to follow.'
The more to follow, in turn, should be strongly expected to involve, if not a controlling American interest, a prospective American government veto on the Fund's management on things that the Americans Strongly Disapprove of.
How that prospective veto will be provided will remain to be seen. It (probably) won't be a formal US government veto, and effort will be taken to present the fund as respecting Ukrainian sovereignty so it can pass the Ukrainian legislature.
Which should probably be put on the geopolitical calendar, along with expecting major propaganda narratives on the approach.
This makes more sense if you re-word with the bolded clause first, rather than buried.
This is your 'Ukrainian laws limiting foreign ownership will not apply to the United States as far as this fund and it's equities go' clause. This is, while not itself a demand for direct control, allows for outright American majority control of not just the Fund, but potentially projects from the fund.
Moreover, it moves issues of fund management litigation to the American legal system ('extent permissible under applicable US laws'), not the Ukrainian legal system. In other words, to argue that the American side of the Fund is mismanaging the Fund, this must be argued in... American federal court.
This is your 'Ukraine cannot force the Americans to give up any controlling interest of the Fund' clause, while enabling an American veto of Ukrainian desires to offload their own shares to anyone the Americans don't want to be able to buy in to the Fund and the monies it manages. How like that is will, in turn, be a matter of how strong the American potential veto power is.
Depending on how 'interest' is used- and I strongly doubt this is financial interest- this is likely to enable an American veto on Ukrainian government selling project elements / control shares to anyone the Americans want to resist, even as a Ukrainian decision to do so would likely water down its own control in favor of the American government's interest.
This is the 'hook' for the American government to have a long-term strategic interest in Ukraine. it is the geopolitical bribe / American interest mechanism to keep the Americans engaged, and with stakes in the survival of the Ukrainian government.
This deal clause requires no specific input of the American funds, but is rather a systemic transformation of how Ukraine's natural resource extraction economy- as least the government owned portion- is run.
In maximalist terms, this language- without mitigation in the Fund Agreement- would be that 50% of revenues of ALL future resource projects would go into the US-overseen fund, even if the USA is not involved in the project. So if, say, Ukraine and Europe make their own mineral deal under Ukrainian sovereign control, 50% of the revenue of that European investment goes to the American-influenced fund. And it's not just natural resources, it can also- with the agreement of both US and UKR- also include other critical infrastructure, such as gas terminals and ports.
While this does not effect 'current' sources of revenues, meaning those could be further invested into and expanded, it does open up negotiating space to claim jurisdiction of future new resource investments that provide money to the Ukrainian government. If China wants to open up a new agreement, and start a new mine on a new find, then 50% of the revenue- not the profits, the revenue- goes into the American-managed Fund, regardless of how Ukraine and China split the remainder.
In more moderate forms, this is likely to be tempered by (undecided) Fund Agreement and the interpretation of 'relevant.' One should probably expect this to apply to projects heavily invested in by the Fund Agreement.
Which- itself- would be a very, very potent influence measure... because that would mean that any government-owned natural resource fund that uses this fund as seed capital- say as part of a joint venture between the Fund, Ukrainian Industry, and Europe- would, as long as the deposit is formally owned by the Ukrainian government, plausible send 50% revenue here.
Since the Ukrainian government will want to use this fund to invest in major infrastructure efforts, especially if it can be used as a matching capital share with other investors (say 25% Fund, 25% Europe, 25% UKR govt, and 25% private), any infrastructure project this fund is invested to should be expected to hit the threshold of 50% revenue to the fund... and while that may be used to cover the other investor interests, it also leaves 50% of the revenue back in the influence of US+UKR management, which is now more able to invest in more things.
-break-
Bringing both varients together- regardless of whether it's a maximalist or 'moderate' form, this clause gives the US influence on Ukrainian natural resource economics that scales with the power of the implicit veto. If the veto is strong, then American interests have to be considered from the start of any buy-in phase.
How will American buy-in be considered? That's up to the American government. It could be the inclusion of American companies into contracts, or terms and conditions that exclude American geopolitical rivals. It could even be geopolitical favor trading... or just plain money. (Unlikely the last, though- the US can print its own dollars.)
But this clause can also be used quote/unquote 'aggressively' against third-party interests. If the Americans and Ukrainians agree that other critical infrastructure should fall under the fund... why, then the revenue has to go the fund. And while there will doubtless be means for the fund to pay the competitive business case / profits back to those prior partners... well, if they want to stay competitive, then they start acting in response to the fund.
Point is- either way, this clause allows the US to exert a greater and greater voting influence on long-term investments in Ukraine, as the more projects that fall under the fund's umbrella, the more raw revenue that does, and thus the great the influence of the US government on the resource-base investments back into the Ukrainian economy. This isn't just influence within Ukraine, but every major corporation that wants to invest in Ukraine, who either wants to capitalize on the funds capital, or has to bring its own instead.
And naturally, the more influence the US government has, the more interest the US government will have to protect that level of influence investment.
This is your door-opening 'any expense the American government controlling share consents / approves of can be covered by the fund, and lawsuits objecting to the contrary don't have standing in court.'
More pejoratively, this is a potential slush-fund clause.
Since the expenses are those incurred by the newly developed projects, not just for the purpose of the newly developed projects, this offers a lot of leeway for interpretation and approval.
On the 'reasonable' end, this is saying the Americans and the Ukrainians may approve the Ukrainians using fund resources to pay for things like, say, mining companies starting new projects that in turn will fall under the fund. Presumably American, and not Chinese, if you to avoid that American veto. Or even just American allies, who get a Fund Approval for an investment in Ukraine in exchange for some help somewhere else.
On the 'that's not what someone whose last name ends with -tin wants it to mean' end, momma needs a new Patriot Battery to protect a Fund site. Which is, in a manner of speaking, an expense incurred by the government of Ukraine to the site owned by the government of Ukraine. And the American government official will doubtless diligently research all the facts before solemnly nodding and approving the fund being used to cover that project site expense.
And if you disagree, that is the Fund's sole discretion. And if you disagree with that, take it to American federal court, who can kick it out on standing, or on grounds of that being the Fund's sole discretion, or in general deference to US government foreign policy, and so on.
This is your 'the Fund will be expected to align to the American fiscal planning cycle, and can spend more often if the Ukrainians can persuade the Americans.' Things that directly benefit the Americans are more likely to persuade the Americans.
This is also 'the Americans will get to negotiate/write into into the Fund Agreement the means by which the Ukrainians can use these funds,' which is a way to write in anti-corruption and oversight mechanisms.
'And other tangible and intangible assets critical for the reconstruction of Ukraine' is your weasel words for anything, up to and including weapons.
Ukrainian defense capabilities, after all, are tangle assets critical for the reconstruction of Ukraine, since Ukraine won't be able to rebuild as effectively if it can't be expected to defend itself.
Also can be read as 'the United States reserves the right to take such action as to protect and maximize the value of their economic interests in the Fund that would drop precipitously if the Russians were attempt to attack Ukraine in the future and directly seize the American economic interests.'
This is your 'the Americans expect to have oversight not only on Fund contracting processes, but also means for this not to be pre-empted by other agreements promising revenue shares to other countries instead of the Fund.'
Enforceability of the later is questionable, but this goes back to implicit American veto power over the fund that 50% of revenues are going into, and what that means in both the extreme and 'moderate' forms.
This is your 'commerce is whatever we say it is as long as money moves, and if you disagree then see us in American court' clause.
Less flippantly- this is extremely superficial covering language, as anyone remotely familiar with the American regulatory environments should know. And if you aren't familiar- the commerce clause is the primary authority mechanism that the American Congress use to pass almost any law in Congress. The American government understanding of 'commerce' is extremely broad.
Coincidentally, the Commerce clause authority-
-is also used to regulate foreign military sales.
So this part of the agreement is saying- 'Among other things, we acknowledge the Fund Agreement is commercial in nature. Signed, The People who Consider Arms Sales Commercial In Nature
This is your 'the Fund, and thus 50% of all Ukrainian resource revenues governed by the Fund, will comply with American sanctions globally, and the Americans will watch the control mechanisms' clause.
Depending how it is implemented into the more nuanced fund agreement, of course.
This is the hook for getting it the Ukrainian government's commitment.
This is the 'Ukraine's bilateral relationship with the United States will be dependent upon actually implementing this agreement and all the implications above' clause.
There are a lot of interesting game theory implications for what a Ukrainian refusal to do this deal would have, especially in the context of the expected progression of the war in Ukraine over the next several months. Which, in turn, has a lot of security-politic implications that will be interesting discussion points later this year.
But too in depth for here.
This is your 'the United States government reserves the right in the future to retroactively act as if it had provided Ukraine security guarantees, without technically offering a security guarantee' clause.
is this a security guarantee in and of itself? No. Also, you wouldn't expect the security guarantee in the economic relationship document. If that happened, then a breakdown of security relationships would mean a breakdown in economic document, and clearly this is a Purely Commercial relationship. It said so right up there earlier, remember?
Is it the sort of strength of language that someone in Ukraine's position who wants an explicit security guarantee? Also no. The popular concept of a security guarantee is far more muscular.
But as a basis of comparison, consider what the NATO Article 5 guarantee actually is.
NATO Article 5 is just a promise that other states will-
And if you remember the earlier clause of interest...
So no, this isn't a security guarantee. The Government of the United States just happens to support Ukraine's efforts to obtain security guarantees, will seek to identify necessary steps to protect its interests that this fund would significantly grow over time, and reserves the right to take actions on the same scope as a NATO Article 5 invocation.
Except, as a matter of choice, not because it's a security guarantee.
Because security guarantees would make this a non-commercial document.
And because it's not a security guarantee, it won't conflict with any Russian demands that there be limits on American security guarantees for Ukraine.
Which this isn't. At all. Because that would be non-commercial. No strategically objectional things here, no siree.
This is worse and better than a security guarantee in some respects. It is a 'reserves the right to act as if we provided Ukraine a security guarantee,' which is not in contradiction with promises to not offer Ukraine a security guarantee. After all, it's not a guarantee- it's just that the United States reserves the rights to protect its / Ukraine's investments in things an expansionist, oligarchic empire might want to seize.
Which is probably why the Russians reportedly offered Trump an analogous but probably less generous rare earth minerals deal for resources in Russian occupied Ukraine.
No word yet if Russia offered an implicit American veto over the commitment of 50% of national resource projects going forward.
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