The Minerals Agreement: new opportunities for American investors
Contents
Recently, the Agreement between the Government of Ukraine and the Government of the United States of America on the Establishment of a United States-Ukraine Reconstruction Investment Fund (hereinafter the “Agreement”) has come into force for Ukraine.
The Agreement provides for the establishment of a limited partnership between the states (hereinafter the “Partnership”), the purpose of which is, inter alia, to encourage transparent, accountable and future-oriented investments in critical sectors of Ukraine’s economy to support Ukraine’s recovery strategy.
For American investors, this Agreement grants access to perspective Ukrainian projects on special terms, with tax benefits, legal protection, and a stable investment environment.
Investment opportunities
Pursuant to the Agreement, Ukrainian state authorities will be required to include in all special permits for subsoil use or licenses a provision obliging the recipient of such permit/license, if they wish to raise capital, to provide the Partnership with relevant investment information on the terms of participation in a project.
If the Partnership is officially interested in cooperation, the permit holder will have to engage in good faith negotiations with the Partnership and not offer any third party significantly more favorable financial terms for a similar project.
It is assumed that the same provisions will be included in public-private partnership contracts, concessions, and agreements for the construction or operation of significant infrastructure relevant assets.
In addition, all special permits for subsoil use or licenses should include provisions granting the United States partner (the International Development Finance Corporation) or its authorized representative the right to negotiate for offtake rights on market-based terms during the validity period of such permit or license. Moreover, the permits and licenses will also include provisions on refraining the permit holder from offering third parties significantly more favorable financial/economic terms for offtake of substantially similar quality or quantity of product.
It should be noted that the Agreement covers a significant number of natural resources.
It is expected that such provisions will create a real opportunity for American investors to participate in promising mining and infrastructure projects on favorable terms and with the support of the International Development Finance Corporation.
Exemption from taxation and tariffs
Given that the economic activities related to the Partnership will take place in Ukraine, the Government of Ukraine will guarantee that any income of the Partnership, contributions and other payments to the Partnership related to revenues and earnings/other payments under the Agreement will not be subject to any taxes, levies or withholdings by the Ukrainian state authorities.
Meanwhile, the United States expects that it will not impose tariffs on the natural resources acquired under the Agreement.
Currency convertibility and funds transfer
Ukraine will provide free convertibility of hryvnia into U.S. dollars, as well as the ability to transfer funds to Partnership accounts, both in Ukraine and abroad, without any fees, conditions or delays.
In the event of a deterioration in the balance of payments or a reduction in the level of gold and foreign exchange reserves, the Government of Ukraine, after consultation with the United States Department of the Treasury, may temporarily impose restrictions on the exchange of hryvnia into U.S. dollars and the transfer of funds to the Partnership’s accounts. However, in such event, Ukraine shall be obligated to reimburse all costs and expenses incurred in connection with the imposition of payment, conditions or delays with respect to such payments (regardless of the reason for the establishment of the restrictions).
Stability, perpetuity and priority of the Agreement
Government of Ukraine ensures the following:
- regardless of the adoption of new regulations or amendments to existing legislation, to provide the Partnership and its partners with no less favorable conditions than those set forth in the Agreement;
- in case of inconsistencies between the provisions of Ukrainian legislation and the terms of the Agreement, to recognize the priority of the latter;
- not to refer to the norms of national legislation as a reason for failure to fulfill its obligations under the Agreement.
It is worth noting that the Agreement is open-ended and will remain in force until the states agree to terminate it.
Conclusions
It should be noted that the Agreement has a framework nature. In particular, as envisaged by its provisions, the detailed mechanisms, procedures and conditions for the implementation of certain of the above-mentioned clauses were specified in the Limited Partnership Agreement, the official text of which is currently not available in publicly available sources due to its confidentiality.
Nevertheless, even at this stage, the Agreement establishes the foundation for systematic cooperation between the states, enabling the United States side to participate in Ukraine’s recovery by investing on favorable, stable and predictable terms.

Viktoriia Bublichenko
Partner, Head of Tax, Restructuring, Claims and Recoveries practice, Attorney at law
- Contacts
- 31/33 Kniaziv Ostrozkykh St, Zorianyi Business Center, Kyiv, Ukraine, 01010
- v.bublichenko@golaw.ua
- +38 044 581 1220
- Recognitions
- IFLR1000 2024
- IFLR1000 2024
- ITR World Tax 2025

Tetiana Fedorenko
Senior Associate, Attorney at law
- Contacts
- 31/33 Kniaziv Ostrozkykh St, Zorianyi Business Center, Kyiv, Ukraine, 01010
- t.fedorenko@golaw.ua
- +380 44 581 1220
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