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21 Jul, 2023 17:13

Moscow outlines terms for grain deal resumption

The West should “re-SWIFT” Russia’s major agriculture lender, Deputy Foreign Minister Sergey Vershinin has said
Moscow outlines terms for grain deal resumption

The Black Sea grain deal could be resumed if Russia’s major agriculture lender, Rosselkhozbank, is reconnected to the SWIFT international payments system, Deputy Foreign Minister Sergey Vershinin told reporters on Friday.

The European Union is considering reconnecting the sanctioned Russian bank to the global financial network in a bid to rescue the grain deal via the lender’s subsidiary, according to media reports.

When asked about the feasibility of such an initiative, Vershinin noted that the overseas unit of Rosselkhozbank in Luxembourg would terminate its operations in October, and the establishment of a new separate banking structure would require time and “serious investment.”

“There is no such possibility in conditions when Russian banks are banned. It is not even clear how long it will take now, how many years,” he added, noting that in the current situation “we just need a ‘re-SWIFT’ of the bank, without restrictions.”

Rosselkhozbank was cut off from SWIFT as part of the Ukraine-related sanctions imposed on Russia by the West. The reconnection of the lender to facilitate grain and fertilizer transactions has been among Moscow’s demands for the extension of the deal covering exports of Ukrainian and Russian agriculture.

Earlier, Reuters reported that UN Secretary-General Antonio Guterres had proposed to Russian President Vladimir Putin that Moscow agree to extend the grain deal in exchange for partial access to SWIFT. Guterres reportedly suggested that Moscow prolong the agreement for several months to give Brussels time to connect the Rosselkhozbank subsidiary to the payment system.

“We have been receiving promises for an entire year and under these pledges they demanded a concrete decision from us,” Vershinin noted.

He said Russia had expressed its position “quite clearly” and wants to see “not promises, but results. And then we will be able to resume these joint efforts to supply grain to the global market,” he added.

Commenting on reports about alleged insurance discounts for Russian ships, the senior diplomat argued that “all ports of the Russian Federation have been declared a military zone,” which means “an automatic increase in insurance rates, up to a level that is actually prohibitive for any transactions.”

Russia withdrew from the Black Sea Grain Initiative on Monday, complaining that the US had failed to keep its promises to lift some of the restrictions imposed in the wake of its military operation in Ukraine, including reconnecting its banks to SWIFT, restarting key ammonia pipeline, permitting imports of agricultural machinery and parts, and unblocking transportation insurance and other logistics.

Moscow has provided assurance, however, that Russian agricultural exports will continue to those countries that need produce despite the grain deal being scrapped.

For more stories on economy & finance visit RT's business section

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