The second signed US-Ukraine minerals agreement

On the evening of 30 April 2025 in Washington, DC the United States and Ukraine signed a second US-Ukraine minerals agreement, after several days of angst and consternation as to whether there would be last-minute changes and seemingly interminable discussions about what it would say. The document as signed has been published by the Ukrainian government, and a copy of it is here (in English):

68133ce8f2e82842702204.pdf

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It is also here, in Ukrainian:

681339e31d3dd033825712.pdf

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It is reported that the Ukrainian government hired a major Anglo-American law firm, where this author used to work, to negotiate the agreement for them; and that law firm has done an extremely good job for the Ukrainian government. The agreement achieves virtually everything Ukraine wants from such an agreement, yet it gives the Trump administration political cover to continue supplying arms to Ukraine (the first batch of which was authorised by the US Department of State yesterday) and demonstrates cooperation on the part of the Ukrainian government with the mediation efforts, such as they are, while the Russians are continuing to stall.

Although there has been much written in the media about the agreement, it has not been written by lawyers and a lot of it is inaccurate or misleading. It is a curious hybrid text, formally a treaty between the United States and Ukraine and so governed by international law, but drafted in the style of an outline investment partnership agreement found in US law when two investors want to invest in a project jointly using special purpose vehicles as a means to do so. Thereby it mixes two quite different areas of law and the outcome is rather extraordinary.

The first thing to note is the recitals (the preambular paragraphs to the agreement) which seem to be more of a correction of the historical record than anything else. The most important thing is that the recitals commit the United States Government to a policy of Ukrainian territorial unity, including Crimea. It had been thought that the US Government's position towards Crimea was that the peninsula's annexation by Russia ought to be recognised by the United States. This agreement suggests otherwise, when it refers to "international law" providing "sovereignty [for Ukraine over ...] its territory, in addition to sovereign rights in its exclusive economic zone and economic shelf". Any international lawyer knows what these words refer to: the international law of the sea, and the parts of a country's waters that it is allowed to exploit for commercial purposes exclusively in accordance with that country's internationally recognised borders. This inclues all the waters around Crimea and the Sea of Azov, such as the waters off occupied Mariupol and Berdiansk. These are currently under Russian occupation. So the United States has implicitly recognised that Ukraine should have these territories back.

The recitals also recognises the importance of investment by the United States, the European Union and other states "supporting Ukraine's defense against Russia's full scale invasion". This makes it clear that the United States agrees that Russia's invasion of Ukraine was unlawful and that the West ought to coordinate together to resist it.

The first paragraph of the agreement states that "it is the policy of the Parties" to have the US Development Finance Corporation and a US government partner create a limited partnership forming a United-States-Ukraine Reconstruction Investment Fund. Already the language of ambiguity ("it is the policy ...") is creeping in. The "LP Agreement", which would establish the limited partnership, has not yet been drafted and is to be agreed later. So this is an agreement to agree, which as all lawyers know is unenforceable. Exactly how the LP Agreement is to work, who is to invest what and who is to get what, subject to what deductions and expenses and the like, is to be discussed later. Critically, the identities of the private investors in Ukraine's mineral and rare earth exploitation have yet to be identified. It seems unlikely that any private investors will step forth and participate while there is a hot war undergoing on Ukraine's soil (particularly in the areas where Ukraine's natural resources are predominantly located), but once the war ends those investors would likely step forward anyway as a new market opens up.

Most of the rest of the document is either boilerplate provisions (the US will not tax the limited partnership; Ukraine will allow conversion of revenues from Hryvnias into US Dollars; Ukraine will not permit its legislation to frustrate the effect of the agreement; the Ukrainian government will issue relevant licences and permits, etcetera) or statements of political support by the United States for Ukraine's future as a free, independent, democratic state governed by the rule of law and all sorts of things that all Ukraine's other allies agree upon anyway.

The agreement provides that US military aid by the United States after the date of the agreement (which mysteriously remains undated, like its predecessor one-page statement of intent, but which we know was signed on 30 April 2025) will be deemed as a capital contribution to the fund created by the LP Agreement. This is fine; but given that the LP Agreement does not yet exist and has no assets and there is no investments and no revenues, these are rather empty words.

Paragraph 1(d) of Article VII refers to more "good faith negotiations" with the proposed recipient of Partnership Funds for investment in infrastructure, something which again is unenforceable as an agreement to agree. The same sort of ambiguous language is found in Article VIII(1).

There is no choice of law clause found in typical investment agreements. More fundamentally, there is no dispute resolution clause. No courts or arbitration tribunals have jurisdiction to enforce this agreement (were it to contain any content), and Article IX(2) provides that disputes shall be "resolved by mutual consultation".

Article XI(2) provides that the agreement shall come into force upon ratification of the Ukrainian parliament; but given that this agreement creates no enforceable legal obligations whatsoever upon Ukraine and contains a series of political commitments by the United States which align precisely with Ukraine's political goals, that ratification will surely be automatic.

In conclusion, this is not a legal agreement at all put a political pretext for the United States to continue her unconditional support for Ukraine pursuant to the Biden administration's policies. And yesterday the US Government continued the release of military hardware to Ukraine to help her fight off Russian aggression. Russia, not agreeing anything yet with the United States but just engaged in interminable talks via the US intermediary Steve Witkoff, needs some pressure applied by the United States and this agreement is aimed at doing that. The next step can and should be secondary sanctions, and then still further supply of military hardware to Ukraine. In the meantime Ukraine has not created any legal obligations upon herself; she has not granted any political concessions; and she has gained a political advantage by signing this agreement - as has the United States.

Now President Trump is busy reshuffling his foreign policy administration, and we will see how the summer fighting season plays out. While the agreement signed on 30 April 2025 is formally and legally meaningless, it represents a major tactical political victory for both President Zelenskyy and for President Trump. And where those two men's interests co-align, that is surely a good thing.