Ratified minerals deal looks like standardized investment agreement without discriminatory provisions - lawyer

The ratified agreement on minerals looks like a standardized investment agreement without discriminatory and disadvantageous provisions, believes the deputy chairperson of the committee of the Ukrainian Bar Association on international law, legal manager of Alter Domus (Luxembourg) Anna Bukvych.

"Almost all the conditions unfavorable for Ukraine regarding the return of the assistance provided were not included in the agreement and currently it looks like the agreement is a more standardized investment agreement without discriminatory or disadvantageous provisions. That is, this is an agreement on investments in Ukraine, in which the United States has priority, but how this right of the United States will be ensured is also not yet known," she told the Interfax-Ukraine agency.

Bukvych called it important that the agreement contains a clearly defined list of minerals and that it cannot be changed unilaterally.

"That is, the US cannot do this without Ukraine's consent. No less important is the fact that the agreement only deals with income from new deposits, which is a matter of principle. Any income from deposits that have already received licenses is not the subject of the agreements. That is, there is no risk of redistribution of funds that are currently being received by the budget," she said.

At the same time, Bukvych believes that currently there are no risks regarding subjectivity in the existing texts of the agreement, and the current version of the agreement is an investment agreement with fairly favorable conditions for Ukraine. The agreement does not provide for additional restrictions on rights or mechanisms for influencing Ukraine. At the same time, the assistance that the US may provide will affect the amount of Ukraine's contribution to the joint investment fund, "but this is more a matter of economic benefit for the US than an impact on subjectivity."

She also drew attention to the fact that "most of the important issues of managing the common fund and investing the income are resolved by the parties (Ukraine and the United States) jointly, income from previous licenses is not included in the common fund."

"I do not exclude that the relevant risks could potentially have been embedded in previous versions of the agreement, but as we know, the text has been significantly changed. Despite the lack of technical documents on cooperation, it is unlikely that they will contain significant deviations from what was signed," she said.

Bukvych assumes that, since the resolution of disputes under investment agreements is regulated by a separate investment arbitration mechanism, "this mechanism will probably be used in the case of disputes arising from the agreement."

At the same time, commenting on the risks of restrictions on sovereign affairs, the expert noted that currently in the current version of the agreement, we cannot speak of any violation of sovereign rights, but we are only talking about joint management of the investment fund with certain preferences for US access to investment.

"It is worth emphasizing and refuting myths: the ownership of the subsoil remains with Ukraine. Moreover, the United States will not have the decisive right to manage the fund and issue licenses. All these issues, as well as the replenishment of the fund, will be carried out jointly. Moreover, the list of deposits cannot be changed unilaterally without the consent of Ukraine. It is important that in the context of replenishing the fund, we are talking only about income from new deposits, which is important for Ukraine, since these payments are currently replenishing the budget," she said.

At the same time, the lawyer noted that "the technical details of the fund's functioning are important, but at this time we are definitely not talking about restricting Ukraine's sovereign rights."

"As part of the agreement, a number of technical documents will be developed and concluded, which will regulate the terms of cooperation in detail. It is in these technical documents that certain risks may be embedded, which are associated with the practical implementation of the agreement and they will occupy many more pages than the text of the main agreement itself. Creating such an investment fund is an extremely long and complex job, and in this case, everything will be decided by the technical details of managing such a fund," Bukvych summarized.