UN is offering Putin SWIFT access in exchange for expanding Black Sea grain expansion, sources say Ship’s crew

Reuters

By Michelle Nichols

UNITED NATIONS, July 12 (Reuters) – UN Secretary-General Antonio Guterres has proposed to Russian President Vladimir Putin to extend an agreement that would allow Ukraine’s grain to be safely exported from the Black Sea in exchange for attaching a subsidiary of the Russian Agricultural Bank to SWIFT international payment system, sources told Reuters.

Russia has threatened to pull out of the grain deal, which expires on Monday, because several demands The requirements to send their own grain and fertilizers abroad were not met. The last two vessels underway under the Black Sea Agreement are currently loading cargo in the Ukrainian port of Odessa ahead of the deadline.

One of Moscow’s central demands is the reconnection of the Russian agricultural bank Rosselkhozbank to the international payment network SWIFT. It was cut off by the European Union in June 2022 because of the Russian invasion of Ukraine. An EU spokesman said in May the EU was not considering restarting Russian banks.

However, the EU is considering connecting a subsidiary of Rosselkhozbank to SWIFT specifically to facilitate grain and fertilizer transactions, three sources familiar with the discussions told Reuters on Wednesday. The European Commission did not immediately respond to a request for comment.

Guterres has suggested to Putin that Russia should allow the Black Sea Grains Agreement to continue for several months to give the EU time to connect a subsidiary of Rosselkhozbank to SWIFT, two sources familiar with the discussions told Reuters.

Guterres sent a letter to Putin on Tuesday suggesting a way to further ease Russia’s food and fertilizer exports and ensure continued Black Sea shipments of Ukrainian grain, a UN spokesman said on Wednesday.

“The goal is to remove obstacles to financial transactions through the Russian Agricultural Bank, a major concern of the Russian Federation, while allowing the continued flow of Ukrainian grain through the Black Sea,” UN spokesman Stéphane Dujarric told reporters.

He gave no further details on the proposal, but added that Guterres has worked with all relevant parties on the issue and is ready to discuss his proposal further with Russia.

A Kremlin spokesman did not immediately respond to a request for comment.

The United Nations and Turkey negotiated the Black Sea Grains Initiative with Russia and Ukraine in July 2022 to help alleviate a global food crisis exacerbated by Moscow’s invasion and blockade of Ukrainian ports.

At the same time, to persuade Russia to agree to the Black Sea Agreement, a three-year memorandum of understanding was signed in which UN officials agreed to help Russia get its food and fertilizer exports to foreign markets.

While Russian food and fertilizer exports are not subject to Western sanctions imposed in the wake of the invasion of Ukraine, restrictions on payments, logistics and insurance are impeding supplies, Moscow said.

To circumvent the lack of access to SWIFT, UN officials set up the US bank JPMorgan Chase & Co. JPM.N Processing some Russian grain export payments with assurances by the US government.

The United Nations also works with the African Export-Import Bank (Afreximbank). to create a platformto help settle transactions for Russian grain and fertilizer exports to Africa, the top UN trade official told Reuters last month.

(Reporting by Michelle Nichols; Editing by Kanishka Singh, Mark Heinrich and Diane Craft)

(c) Copyright Thomson Reuters 2023.

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