The Budget Committee for Ukraine’s parliament, the Verkhovna Rada, backed changes to the Budget Code, allowing Ukraine to contribute around Hr.3 billion ($72.2 million) to an investment fund under a new mineral deal with the US.
Roksolana Pidlasa, head of the budget committee, reported the news on her Facebook on Tuesday, May 13.
On Monday, President Volodymyr Zelensky officially signed the minerals deal with the US into law. Zelensky’s signature was the final step needed for it to take effect.
Now, lawmakers are proposing to create a mechanism that will allow Ukraine to transfer a portion of its revenues from mineral extraction to the US-Ukraine Reconstruction Investment Fund.
According to preliminary estimates, Ukraine’s contribution to the fund could amount to about Hr.3 billion ($72.2 million) over five years. This is the amount the country would have transferred if the Agreement had been signed back in 2019, Pidlasa wrote.
Ukraine’s contribution will be formed from half of the revenues received after the mineral deal comes into force. The funds will come from new licenses for the extraction of oil, gas, gas condensate, and other resources listed in the annex to the Agreement.
According to Pidlasa, the calculation will also include new special permits for subsoil use and the state’s share of production under new production sharing agreements.
The money will be credited to a special fund within the state budget. From there, the main budget administrator – likely the Ministry of Economy – will transfer the funds directly to the investment fund.
“I believe this Code should be passed in full, and according to the Law on International Treaties, it should have been adopted together with the ratification of the Agreement – but the factions consistently oppose it,” Pidlasa said.
Multiple steps are needed to make the mineral deal work
On May 8, The Verkhovna Rada ratified the intergovernmental minerals agreement previously signed by Ukraine and the US. A total of 338 lawmakers voted in favor. Presidential Office Head Andriy Yermak called it a “historic decision” at the time.
Prior to ratification, the agreement was reviewed and approved by the Rada’s Foreign Affairs Committee, after the Cabinet of Ministers submitted the necessary documents, including an explanatory note, the agreement text, and registration.
The first deputy head of the Verkhovna Rada’s Committee on Finance, Tax, and Customs Policy, Yaroslav Zheleznyak, said that the committee’s decision included a key safeguard stipulating that “Any additional arrangements on establishing the United States-Ukraine Reconstruction Investment Fund shall not contradict this agreement.”
After Zelensky’s signature, the US and Ukraine will sign two other agreements outlining the specifics of the minerals deal, including the technical parameters required to set up the joint investment fund established via the signed document.
In addition, lawmakers in the parliamentary committees will need to amend relevant laws to make the agreement work.