A leaked 28‑point US proposal to end the war in Ukraine reads less like a ceasefire outline and more like an economic reset. It pairs battlefield trade‑offs with a financial package that would channel $100bn of frozen Russian assets into US‑led reconstruction and sketch a path to phased sanctions relief and even a G8 return for Moscow. Several major outlets, including Axios, Reuters and the Guardian, have published overlapping summaries after officials on all sides acknowledged talks.

On the security side, the draft would see Ukraine cede the remaining Donbas cities it still holds into a demilitarised zone recognised de facto as Russian territory, freeze lines in parts of Kherson and Zaporizhzhia, cap Ukraine’s armed forces at 600,000 personnel, bar NATO membership and keep foreign troops out of Ukraine. A non‑aggression pact, elections in 100 days, and European fighter jets stationed in Poland are also listed, alongside a snap‑back of sanctions and a coordinated military response if Russia attacks again.

Kyiv’s initial response sets clear limits. At the UN, Ukraine’s deputy ambassador Khrystyna Hayovyshyn reiterated red lines: no recognition of occupied territories as Russian, no limits on Ukraine’s defence or force size, and no curbs on alliance choices enshrined in Ukraine’s constitution since 2019. Those positions clash with the draft’s territorial and military caps.

Europe is pushing back on process and substance. Germany’s foreign minister Johann Wadephul called the document “not a real plan… simply a list of topics,” while EU capitals stressed they must be in the room if Europe is being asked to guarantee any settlement. The White House message is that this is a working document. Secretary of State Marco Rubio said Washington is developing “a list of potential ideas” rather than presenting a finished deal.

Timing adds pressure. The Washington Post reported a soft deadline of Thanksgiving for Kyiv to signal acceptance or risk a downgrade in US support. Yet the Kremlin says it has not officially received the text, undercutting the sense of an imminent signing. Markets should treat any timeline as political signalling rather than a firm schedule.

For investors, the money mechanics are the hinge. The EU has already legislated to skim windfall profits earned on immobilised Russian sovereign assets-mostly parked at Euroclear in Belgium-and channel them to Ukraine, largely for military support. Brussels estimates about €2.5–€3bn per year; the first multi‑billion payments landed in July 2024, with more flowing in 2025. Euroclear’s own disclosures show interest income and windfall contributions running into the billions, though falling as rates ease.

The leaked US draft goes much further than EU law by proposing $100bn from frozen assets into a US‑led rebuild fund where the US takes 50% of profits, Europe kicks in another $100bn, and the remainder of Russian assets seed a US‑Russian investment vehicle. That would require unfreezing principal-well beyond the EU’s current “profits only” approach-and would test legal risk appetites in Brussels and national capitals.

Scale matters. The World Bank, European Commission and UN peg Ukraine’s reconstruction and recovery bill at $524bn over the next decade as of 31 December 2024, up from $486bn a year earlier. Even if the $100bn line item were politically possible, it covers only a slice of requirements and would need to crowd in private capital.

UK readers should watch the domestic sanctions plumbing. HM Treasury’s OFSI says £22.5bn of Russia‑linked assets are frozen in the UK (and £28.7bn reported since February 2022 across the regime). Any principal unfreeze would collide with the Russia (Sanctions) (EU Exit) Regulations 2019, requiring UK decisions that align with, or diverge from, EU‑US moves. Compliance risk is not abstract: OFSI fined a City law firm £465k this year for Russia breaches.

Market take, in brief: a credible path to sanctions easing would initially pressure oil and defence names and support Ukrainian sovereigns, while uncertainty over asset‑release litigation could weigh on Euroclear‑exposed intermediaries and EU risk premia. The FT flagged an early pop in Ukrainian bonds on the leak, but pricing depends on whether Europe endorses any asset‑principal deal and how courts view ownership claims.

Security guarantees remain the other moving part. The draft hints at US guarantees with conditions-including a clause that firing a missile at Moscow or St Petersburg without cause would void them-while excluding NATO troops in Ukraine. In parallel, a UK‑France “coalition of the willing” has been designing a reassurance force for the day after a ceasefire, underscoring the gap between European planning and the draft’s troop ban.

The bottom line for UK investors: treat this as a live negotiation, not a template. Watch three signposts over the coming weeks-any EU verdict on using more than profits from frozen assets (Belgium’s legal concerns are pivotal), whether Kyiv and Washington narrow differences on territorial wording, and whether Moscow engages beyond press lines. If those align, sanctions policy-and exposures tied to it-could shift quickly.