Russia’s major agriculture lender, Rosselkhozbank, could be reconnected to the SWIFT international payments system, leading to the resumption of the Black Sea grain deal, according to Deputy Foreign Minister Sergey Vershinin. The European Union is reportedly considering reconnecting the sanctioned Russian bank to the global financial network through its subsidiary, with the aim of rescuing the grain deal. However, Vershinin noted that setting up a new banking structure would require time and significant investment.
The disconnecting of Rosselkhozbank from SWIFT was part of the Ukraine-related sanctions imposed on Russia by the West. Since then, Moscow has demanded the reconnection of the lender to facilitate grain and fertilizer transactions as a condition for extending the deal covering exports of Ukrainian and Russian agriculture.
Media reports have also highlighted that UN Secretary-General Antonio Guterres proposed to Russian President Vladimir Putin that Moscow agree to extend the grain deal in exchange for partial access to SWIFT. The suggestion is that Moscow prolong the agreement for several months to give Brussels time to connect the Rosselkhozbank subsidiary to the payment system.
Commenting on these developments, Vershinin stated that Russia has been receiving promises for an entire year and now wants to see concrete results. He emphasized the need for clear actions instead of mere pledges. Once there are tangible outcomes, Russia will be willing to resume efforts to supply grain to the global market.
In relation to reports about alleged insurance discounts for Russian ships, Vershinin explained that all ports in Russia have been declared military zones, leading to an automatic increase in insurance rates. These increased rates have become prohibitive for any transactions.
The decision to withdraw from the Black Sea Grain Initiative was announced by Russia on Monday, citing the US’s failure to fulfill its promises to lift certain restrictions imposed after the military operation in Ukraine. These promises included reconnecting Russian banks to SWIFT, restarting a key ammonia pipeline, allowing imports of agricultural machinery and parts, and unblocking transportation insurance and other logistics.
Despite the cancellation of the grain deal, Moscow has assured that Russian agricultural exports will continue to countries in need of produce.
In order to address the current situation, several crucial steps need to be taken. Firstly, the European Union should seriously consider reconnecting Rosselkhozbank to SWIFT, thus allowing the resumption of the grain deal. This would require the establishment of a new banking structure, which would need time and considerable investment. Secondly, it is imperative that the promises made by the West to Russia are fulfilled. Concrete actions need to be taken to lift the restrictions imposed on Russian banks and restart key pipelines and imports. This would create a favorable environment for trade and allow both sides to benefit.
The possible reconnection of Rosselkhozbank to SWIFT is a significant development that could potentially restore the grain deal and improve economic relations between Russia and the West. It is crucial that all parties involved work towards finding a solution that is mutually beneficial. By resuming the joint efforts to supply grain to the global market, both Russia and the EU can strengthen their economies and contribute to global food security.