The European Union (EU) is reportedly considering a proposal to reconnect a sanctioned Russian bank to the SWIFT global financial network in order to salvage the Black Sea grain deal. The Financial Times has reported that sources close to the discussions have revealed the plan, which involves major Russian agricultural lender Rosselkhozbank creating a subsidiary that would be reconnected to SWIFT to handle the country’s grain export payments. The proposal was allegedly put forward by Moscow through UN-brokered negotiations.
Rosselkhozbank was cut off from SWIFT as a result of Ukraine-related Western sanctions against Russia. Moscow has made the reconnection of the bank to SWIFT one of the conditions for extending the agreement for exporting Ukrainian grain, known as the Black Sea Grain Initiative. The deal, which was signed in July 2022 with mediation from the UN and Turkey, is set to expire on July 18.
According to the Financial Times, the proposal regarding Rosselkhozbank was discussed by EU leaders at a summit in Brussels last week, and it was considered to be the least worst option to secure an extension for the grain deal. EU officials are currently examining the legality and feasibility of the plan.
Russian Foreign Minister Sergey Lavrov has reiterated that Moscow sees no grounds to agree to an extension of the grain deal, accusing the US and EU of adopting an outrageous attitude by claiming that their sanctions do not explicitly target Russian agricultural shipments. Lavrov argued that the restrictions applied to Rosselkhozbank, as well as Russia’s shipping industry and other allegedly technical but actually prohibitive actions, have created significant obstacles to Russian exports. He stated that he doesn’t see any arguments for those who would like to continue the Black Sea Grain Initiative.
The potential reconnection of Rosselkhozbank to SWIFT could be a crucial development in salvaging the grain deal between Russia and Ukraine. However, the proposal still needs to be thoroughly examined by EU officials to ensure its legality and feasibility.
In related news, Moscow has warned that it will withdraw from the grain deal if Rosselkhozbank is not reconnected to the payment system. This highlights the importance of resolving the issue in order to maintain trade relations between Russia and Ukraine.
The fate of the Black Sea Grain Initiative remains uncertain as the deadline for its expiration approaches. Both sides will need to find a mutually agreeable solution to ensure the continuation of the trade agreement.
Overall, the potential reconnection of Rosselkhozbank to SWIFT represents a potential breakthrough in the efforts to salvage the grain deal between Russia and Ukraine. However, further discussions and examinations are needed before a final decision can be reached. The outcome of these negotiations will have significant implications for trade relations between the two countries.