The name conceals the main dispute
President Volodymyr Zelenskyy said on 25 August that a one-page framework prepared with American and European officials contains three broad elements: a ceasefire, a US proposal for a free economic zone in Donbas under third-party administration, and roles for the EU and NATO. The public description names no administrator, draws no boundary and sets out no enforcement rules. Those omissions do not prove that safeguards are absent from the talks. They do mean that the proposal cannot yet be assessed as an operational settlement.
The economic label is misleadingly narrow. A conventional special economic zone adjusts taxes, customs or regulation inside a state. This proposal would also decide where armed forces may stand, who exercises public authority and how an internationally recognised part of Ukraine is governed during a ceasefire. Legal scholar Helmut Philipp Aust therefore distinguishes an ordinary domestic zone from an arrangement embedded in a peace settlement. The harder questions come before investment incentives.
Key takeaways
- The public description of the current proposal identifies a ceasefire and third-party administration but leaves the zone's boundaries, governing authority and enforcement mechanism undisclosed.
- Any Ukrainian withdrawal would need to be reciprocal, verified and backed by a defined response to Russian violations rather than political assurances alone.
- Economic preferences are credible only after the agreement preserves Ukrainian sovereignty, residents' rights and a workable legal order.
Withdrawal has to be reciprocal and enforceable
An earlier version of the idea gives one useful benchmark, although it cannot be assumed to survive in the unpublished August paper. In December 2025, Zelenskyy said he could consider a demilitarised zone if Russian forces also withdrew and international forces monitored it. He also identified unsettled questions about the depth of the pullback and the position of monitors. The current framework needs to answer them with a map, a timetable and a sequence that does not require Ukraine to move first and trust Russia to follow.
Verification must cover more than uniformed units. Zelenskyy previously warned that Russian personnel could enter disguised as civilians after a Ukrainian withdrawal. A credible mandate would therefore need access to roads, settlements and suspected military sites, as well as a procedure for investigating violations. It would also need a predetermined response if Russia re-entered the zone or used proxy structures there. A monitor that can record a breach but cannot trigger consequences would document the collapse of the arrangement rather than prevent it.
“A tax incentive cannot stop an armed incursion or decide which court has jurisdiction.”
Administration must preserve Ukrainian sovereignty
Third-party administration is not self-explanatory. The agreement would have to identify who appoints the administrator, which law remains in force, which courts hear disputes, who polices the territory and when the mandate ends. It should explicitly preserve Ukrainian sovereignty and the EU's policy of non-recognition of Russia's attempted illegal annexation. Russia's immediate response shows why. Kremlin spokesperson Dmitry Peskov rejected outside administration by calling Donbas Russian territory. That is a claim by the state waging the war of aggression, not a lawful basis for governing Ukrainian land.
Ukraine also needs control over the political consent that creates the arrangement. Zelenskyy said in December that a territorial concession would require an election or referendum. The current proposal's ratification route is unknown. The final text must identify which Ukrainian institutions approve it and how citizens can challenge its operation. Those rules determine whether a temporary ceasefire mechanism remains accountable to Ukraine or becomes an externally designed territorial regime. International law adds another constraint: Article 52 of the Vienna Convention says a treaty procured through unlawful threat or force is void. Whether that provision would apply depends on the terms and circumstances of any eventual agreement, but coercion cannot be treated as irrelevant to its legitimacy.
Investment comes after jurisdiction
Only after those security and legal questions are settled does the economic design become credible. Investors would need enforceable contracts, predictable courts, property records, customs rules and physical access. Residents would need protections for political participation, return and property claims. A tax incentive cannot stop an armed incursion or decide which court has jurisdiction. Nor should Russia receive administrative or commercial benefits from territory seized through aggression without verified withdrawal and restoration provisions.
The proposal may still be a negotiating placeholder rather than a finished institutional plan. Moscow's rejection means the parties have not agreed on who could administer the zone. A free economic zone could pause fighting without weakening Ukrainian sovereignty only if it combines reciprocal withdrawal, monitors with access and enforcement powers, explicit non-recognition of Russia's annexation claims, Ukrainian democratic approval and enforceable rights for residents. Publication of the zone's map, governing mandate and automatic consequences for violations would justify a more favourable judgment. Without those provisions, the proposal remains an undefined territorial settlement carrying an economic name.



