The United Nations Secretary-General, Antonio Guterres, has reportedly offered a proposal to Russian President Vladimir Putin regarding the extension of a grain-movement deal. In exchange for the extension, Guterres suggested that Russia be granted partial access to the SWIFT international payment system. This news, sourced from Reuters, indicates a potential softening of anti-Russia sanctions by the West.
The agreement, facilitated by the UN, currently allows for the secure export of grain from Ukraine via the Black Sea. However, this deal is set to expire on Monday, prompting discussions of its potential extension. Russia has expressed skepticism about prolonging the agreement, citing its failure to meet the original objectives of redirecting grain towards impoverished nations. Additionally, Moscow claims that it has not received its entitled benefits under the deal. One of Russia’s main requests is to have its agricultural bank, Rosselkhozbank, reconnected to the SWIFT international payment system. Despite this, the European Union (EU) has previously stated that lifting restrictions on Russian banks is not on their agenda.
It is important to note that Western sanctions do not currently apply to Russian food and fertilizer exports. However, Russia has argued that restrictions on payments, logistics, and insurance still hinder these shipments. One potential solution being considered by the EU is to connect a subsidiary of Rosselkhozbank to the SWIFT system, specifically for grain and fertilizer transactions.
The proposal put forward by Guterres suggests that Moscow extend the Black Sea grain deal for a few more months, allowing Brussels time to connect the Rosselkhozbank subsidiary to SWIFT. The details of the proposal have not been disclosed, but it is seen as a potential compromise to ensure continued shipments of Ukrainian grain and facilitate Russian food and fertilizer exports.
In response to these developments, a UN spokesperson confirmed that Secretary-General Guterres had sent a letter to President Putin outlining his proposal. However, no further information was provided regarding the specific contents of the letter.
To provide background, the grain deal was initially signed on July 22, 2022, with a planned duration of three months. Despite concerns expressed by Moscow over the past year regarding the agreement’s failure to fulfill its promised benefits for Russia, it has been extended multiple times.
As this situation unfolds, it is worth keeping a close eye on any updates regarding the extension of the grain-movement deal and the potential loosening of anti-Russia sanctions on SWIFT inter-state payments. These developments could have significant impacts on both the grain trade and Russia’s access to the international monetary system.
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