The Verkhovna Rada of Ukraine has passed in the first reading Bill No. 13256, which amends the Budget Code to implement the newly ratified minerals agreement with the United States. The bill lays out the financial architecture for managing revenues from strategic minerals extraction, a cornerstone of the recently created US-Ukrainian Reconstruction Investment Fund.
What’s Changing in the Budget Code
Under the new rules:
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50% of revenue from new subsoil use licenses, rent payments, and state production shares under production-sharing agreements for minerals (including oil, gas, lithium, titanium, and other strategic resources) will now be channeled into a special fund within the state budget.
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These funds will be allocated to Ukraine’s contribution to the US-backed Reconstruction Investment Fund.
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The bill also stipulates that it will only take effect once the Limited Partnership Agreement officially enters into force.
“If such a system had been in place since 2019, Ukraine would have received approximately $71 million from qualifying resource revenues,” said MP Yaroslav Zheleznyak.
Government vs. Alternative Proposal
Two draft laws were under consideration:
✅ Government Bill No. 13256
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Supported by the Ministry of Finance and the Budget Committee.
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Directs 50% of qualifying revenues to the Reconstruction Fund.
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Leaves the remaining 50% within general and local budgets.
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Focuses on economic recovery and investment without compromising existing budget allocations.
⚖️ Alternative Bill No. 13256-1 (European Solidarity)
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Proposes that both halves of rent income be directed to a special fund.
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Suggests that one half go to the Reconstruction Fund and the other half be allocated specifically to Ukraine’s Armed Forces.
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Adds an explicit focus on defense spending as part of resource revenue usage.
Implementation & Next Steps
The bill passed with 286 votes in favor in the first reading. The second reading is scheduled for early June, where lawmakers will review and possibly reconcile both proposals to ensure legislative clarity and alignment with the broader Budget Code.
The new fund architecture is expected to be activated in sync with the US-Ukraine minerals agreement, ratified by the Rada on May 8 and signed by President Volodymyr Zelensky shortly thereafter.
Strategic Importance
The US-Ukraine agreement, also known as the Rare Earths Deal, will help finance Ukraine’s post-war reconstruction, stimulate foreign direct investment, and leverage the country’s rich subsoil reserves, including titanium, lithium, beryllium, and more.
As global competition for critical minerals intensifies, Ukraine is positioning itself as a reliable long-term partner for Western industrial and defense supply chains. This legislative move reinforces its strategic pivot to the West while ensuring a structured, transparent approach to resource revenue management.
Conclusion
This update to the Budget Code is more than just a technical fix—it’s a foundation for long-term economic resilience. By redirecting mineral wealth into reconstruction and potentially defense, Ukraine is ensuring that its natural resources serve both sovereignty and recovery in the face of Russian aggression.
