More than a month after Washington and Kiev first acquired a contract to grant the US large stake in Ukrainian mineral, oil and gas development projects, the two sides are back square in negotiations.
Washington has sent new proposals to Kiev to amend the drastic financial demands from the early draft agreement rejected by Ukraine, adding new ones that could strain the country's finances over the years. Several Ukrainian lawmakers have suggested that Ukraine is unable to accept such deals and that new negotiations are needed.
President Volodymyr Zelensky told reporters in Paris on Thursday that the new proposal would require “detailed research,” suggesting that the final agreement is still far away. But he also said, “Ukraine doesn't want to leave the US with the feeling that it is generally against it.
“We're helping to work with the United States,” Zelensky said. “We don't want to send any signals that could lead the US to stop aid to Ukraine.”
It was a clear attempt to avoid angering the White House, as he did last month after rejecting his previous proposal.
What reflects the previous proposal?
The new proposal returns to President Trump's first demand that billions of Kiev have paid off the US with military and financial aid since Ukraine's full-scale invasion of Russia three years ago.
The new draft repeats the previous version by omitting a mention of Ukraine's security guarantees, which was long approaching last month's draft but Washington had long resisted.
As in previous proposals, Ukraine will need to donate half of its revenues from natural resource projects and related infrastructure such as ports and pipelines to US managed investment funds. Profits from the fund will be reinvested in Ukraine's natural resource projects, but the exact share of such profits remained unknown.
what's new?
The new proposals are more specific about how benefits are shared. Washington will claim all profits from the fund until Kyiv repays 4% annual interest and pays off at least the equivalent of US aid received during the war.
The United States also retains the “right to first offer” of the new project and the authority to refuse the sale of Ukrainian resources to third countries. Additionally, in the first year of the contract, Ukraine is prohibited from offering third parties investment projects with better financial or economic conditions than those offered to the United States.
The new proposal also outlines the role of International Development Finance Corporation, the US government agency responsible for investing in companies and projects overseas. The agency manages the fund by nominating three board members, but Ukraine only has two. The agency also oversees each project where revenue from the fund is invested.
Why is Trump reviving even more stringent conditions?
Trump has long been interested in Ukrainian mineral resources, including lithium and titanium, which are important for the production of modern technology.
After intense negotiations over the mineral trade, Ukraine reached an agreement last month that Kiev thought could ease some of Washington's toughest demands, and that it would be more acceptable. However, the deal collapsed after a disastrous oval office meeting between Trump and Zelensky.
Now, that Kyiv has successfully removed it before – Washington has retained control of the fund, demanding that Ukraine be repaid past US aid – has resurfaced with the latest proposal that Zelensky said he received a few days ago. The security guarantee has also disappeared.
The new proposal “effectively transforms Ukraine into an American colony,” wrote Rome Sheremeta, Ukrainian economist and founding president of the American University in Kiev, in X.
The new proposal was first reported by American and UK news outlets on Thursday evening, including the Financial Times, which released a new 55-page draft. Three current and former Ukrainian officials confirmed the credibility of the document.
What happens next?
Yaroslav Zhelezniak is an opposition to Ukrainian lawmakers who got a new draft and revealed its key points in the video on Thursday, saying the new demand is considering opening a new round of negotiations.
“I'm sure it will be updated,” he said in an interview Thursday afternoon. “There's no chance that it will be approved like it is now.”
Still, Kiev officials on Friday were careful not to reject the new US demands completely, keeping in mind that their previous denial had strained relations between the US and Ukraine.
“It is irresponsible to criticize this document as it is still under negotiation,” Olexi Mochan, a member of Zelensky's party and vice-chairman of the Parliamentary Committee on Economic Development, said in a call Friday. “The goal is to continue negotiations and find a compromise.”
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