What is the agreement about?
On the evening of 25 February, foreign media reported, citing the Financial Times, that Ukraine and the US had agreed on the terms of a subsoil deal. Donald Trump said that he might sign the agreement in Washington with Ukrainian President Volodymyr Zelenskyy on 28 February.
- The version of the agreement dated 24 February provides for the creation of a joint fund to which Ukraine will contribute 50% of the revenues from the future monetisation of natural resources, including oil and gas, as well as related logistics, i.e. oil and gas pipelines.
- The fund will not be replenished with revenues from natural resources that are already going to the state treasury. This means the current activities of Naftogaz or Ukrnafta, the largest gas and oil producers in Ukraine.
- The agreement makes no reference to security guarantees from the United States. Important issues such as the size of the US share in the fund and the terms of joint ownership are also open, and should be settled in subsequent agreements.
- The United States will have the authority to make decisions within the framework of its legislation.
- The signatories will not have the right to sell or transfer their share in the fund without the prior written consent of the other party.
- The money received in the fund will be reinvested at least once a year in the Ukrainian economy.
The Servant of the People is waiting for the president's submission to ratify the agreement
Oleksandr Merezhko (Servant of the People), chairman of the Parliamentary Committee on Foreign Affairs, explained that, according to the procedure, the president or the Cabinet of Ministers submit treaties to parliament for ratification.
"And if an international treaty is finally signed, rather than a memorandum of intent, it must be submitted for ratification. Moreover, we are talking about the natural resources of Ukraine, and there is Article 13 of the Constitution (‘Land, its subsoil, atmospheric air, water and other natural resources located within the territory of Ukraine, natural resources of its continental shelf, exclusive (maritime) economic zone are the objects of property rights of the Ukrainian people’)," Merezhko commented to LB.ua.
In his opinion, it is also politically expedient to ratify the agreement in the Rada.
"Because always in the parliament, certain factions and groups can manipulate and accuse them of 'selling the Batkivschyna', as it was with the opening of the land market (the Batkivschyna faction blocked the rostrum and the presidium of the Verkhovna Rada during the long consideration of the law on the land market)," the MP warned.
By the way, answering a question from LB.ua at a press conference, Volodymyr Zelenskyy said that he supported the option of ratification in the Verkhovna Rada.
At the same time, Volodymyr Zelenskyy did not rule out that MPs might traditionally ‘play on this’.
Vitaliy Bezgin, deputy chairman of the Servant of the People faction, also predicts that there will be political confrontation in parliament. "Even if/when a consensus is found between the states, I assume that not all factions will be ready to vote. Some for ideological reasons, like Batkivshchyna. And some for political reasons, like European Solidarity," he told LB.ua.
Batkivshchyna is undecided
"Bankova Street does not communicate with MPs and does not communicate the progress of the negotiations, what kind of agreement will be signed. Therefore, we need to wait for the final stage and the text that will be signed by the president on Friday," Vadym Ivchenko (Batkivshchyna) told LB.ua.
At the same time, he suggested that the government would accuse the factions that do not vote of being ‘against peace’ and ‘against the US business in Ukraine, which will defend itself’.
"Therefore, the faction will still be determined. I am personally more inclined to support it," Ivchenko added.
European Solidarity criticises agreement for lack of security guarantees
The EU faction also confirmed that representatives of the government or the President's Office did not communicate with MPs about the text of the agreement.
Iryna Friz assured LB.ua that the ‘lack of security guarantees’ would be the red line.
At a Rada meeting on 26 February, MP Oleksiy Honcharenko already stated that the US would not provide them.
His colleague in the faction and head of the parliamentary committee on Euro-Atlantic integration Ivanna Klympush-Tsyntsadze rejected the Servant of the People's allegations that the faction would not support the agreement solely for political reasons and because of sanctions against its head Petro Poroshenko.
"Let the Servants go about their business. They can even rub everyone's noses in it and show that they have 226 votes for at least some decision. We need to wait until the final version of the agreement is signed. We need to analyse it. And we will make any decision on voting at a faction meeting after discussion," the European Solidarity representative stressed.
Holos has questions about the numbers
In a conversation with LB.ua, Yuliya Klymenko insisted that any agreements on state subsoil must be ratified by the Verkhovna Rada.
"What is circulating in the international media looks more like a commercial agreement than an interstate agreement, which raises many questions. First of all, the amount of the deal, the absence of any US commitments to investment and security guarantees, etc. We have to pay for something that happened in the past, and there is nothing about future arms supplies and US investments," she said.
The MP recalled that, according to the Pentagon, Ukraine received $65 billion worth of weapons, as well as approximately $30 billion in direct grants/loans. And it is unclear why the agreement initially talked about $500 billion, and now Trump insists on returning $350 billion.
In addition, she said, there are questions about the inclusion in the agreement of not only rare earth metals, but also gas, oil, and infrastructure.
"Most of the above has been privately owned for many years. The government has been planning to take it all away for years. But it is also unclear how it will implement this. According to my estimates, 50% of these assets are in the occupied territories, in the war zone or nearby. And de facto, Ukrainian subsoil and resources were explored back in Soviet times, so this information may be outdated and irrelevant," said Yuliya Klymenko.
It is worth conducting an audit of the grants/loans/weapons received from the US and calculating their total value, the MP believes. Ukraine is not obliged to return grants, but in exchange for loans, it could offer investment projects to the United States. And to provide Washington with a clear and realistic proposal with a list of weapons needed to free up subsoil and resources in the occupied territories.
"And here Ukraine can give all the liberated subsoil and resources to a joint fund with the US as its share, and the US should provide investments to restore and develop these subsoil and resources," suggested Yuliya Klymenko.
Groups are waiting for the final text
Two groups - the fragments of the banned pro-Russian faction of the OPFL - systematically vote with the Servant of the People. In the end, there is no point in asking Medvedchuk's associates about their position - as the presidential faction likes to say, they are ‘hostages’.
Representatives of business groups in the parliament have not decided on their position - they are waiting for the final text of the agreement.
"We will vote only for the text we see. The common interest of Ukraine and the United States, joint investments, must be enshrined," Volodymyr Areshonkov (Dovira group) told LB.ua.
Taras Batenko, co-chair of the Za Maybutnye group, also stressed that MPs would make up their minds only when the final text signed by the president is published.
However, former Speaker Dmytro Razumkov's group, most of whose representatives are still members of the Servant of the People faction, is likely to vote against the bill. Razumkov said at the Rada's morning meeting on 26 February that the current government has no right to ‘squander everything that belongs to the Ukrainian people on its last day’.
Consensus will be needed not only for ratification. Legislative changes will be needed
Yaroslav Zheleznyak (Holos), First Deputy Chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, added that the political part of the subsoil agreement is clear. However, there is a question of how to ensure its implementation in law: in addition to ratification, additional laws need to be adopted and amendments to the current legislation.
"To implement the same idea with the fund, at least the Tax Code should be amended in terms of rent, the Budget Code in terms of rent/dividend distribution, and the annual budget. Most likely, corporate legislation on privatisation should also be changed. The fund itself also needs separate legislation, at least a framework," he said.
The meeting on 26 February showed that political games and confrontations in the parliament would continue.
The European Solidarity and Holos factions demanded that a motion to summon Prime Minister Denys Shmyhal and First Deputy Prime Minister Yuliya Svyrydenko to parliament to report on the details of the agreement be put to a vote. However, the motion failed to receive the required number of votes twice.