UN calls on Russia’s Putin to extend Black Sea grain agreement: Report

In return, Guterres proposed connecting a subsidiary of Russia’s agricultural bank to the SWIFT international payment system. Russia has threatened to terminate the grain deal, set to expire on Monday, due to unfulfilled demands regarding its own grain and fertilizer exports, Reuters reported.

Currently, the last two ships under the agreement are being loaded with cargo at the Ukrainian port of Odesa before the deadline.

Moscow has made a significant request for the re-establishment of connectivity between the Russian agricultural bank, Rosselkhozbank, and the SWIFT international payment network. The European Union had severed ties with the bank in June 2022 in response to Russia’s invasion of Ukraine. In May, an EU spokesperson stated that the reinstatement of Russian banks was not under consideration.

However, discussions are reportedly underway within the EU to potentially link a subsidiary of Rosselkhozbank to SWIFT, specifically for the purpose of facilitating grain and fertilizer transactions. Three sources familiar with the matter shared this information with Reuters on Wednesday. As of now, the European Commission has not provided an immediate response to requests for comment.

According to two sources familiar with the discussions, UN Secretary-General Antonio Guterres has suggested to President Vladimir Putin that Russia extend the Black Sea grain deal for several months. This proposal would allow the European Union sufficient time to connect a subsidiary of Rosselkhozbank to the SWIFT international payment system.

On Tuesday, Guterres sent a letter to Putin outlining this proposal, aiming to facilitate Russian food and fertilizer exports and ensure the uninterrupted shipment of Ukrainian grain from the Black Sea. A spokesperson from the United Nations confirmed these details on Wednesday.

“The objective is to remove hurdles affecting financial transactions through the Russian Agricultural Bank, a major concern expressed by the Russian Federation, and simultaneously allow for the continued flow of Ukrainian grain through the Black Sea,” U.N. spokesman Stephane Dujarric told reporters.

No additional information was provided regarding the specifics of the proposal, but the spokesperson stated that UN Secretary-General Antonio Guterres is actively engaging with all relevant parties and is open to further discussions with Russia regarding the proposal.

There has been no immediate response from the Kremlin regarding the matter, according to a spokesperson.

The Black Sea Grain Initiative was facilitated by the United Nations and Turkey in July 2022, aiming to address the global food crisis exacerbated by Russia’s invasion and blockade of Ukrainian ports.

As part of the efforts to persuade Russia to accept the continuation of the Black Sea deal, a three-year memorandum of understanding was established. Under this agreement, United Nations officials committed to assisting Russia in exporting its food and fertilizer to international markets.

Although Russian exports of food and fertilizer are not directly affected by Western sanctions imposed following the invasion of Ukraine, Moscow claims that limitations on payments, logistics, and insurance have created obstacles to their shipments.

In order to address the challenges stemming from the lack of access to SWIFT, United Nations officials have managed to secure the involvement of JPMorgan Chase & Co, a US bank, to process certain payment transactions for Russian grain exports. The US government has provided reassurances in this regard.

Furthermore, the United Nations has collaborated with the African Export-Import Bank (Afreximbank) to establish a platform that will aid in processing transactions related to Russian exports of grain and fertilizer to Africa. This initiative was disclosed by the top UN trade official in a statement to Reuters last month.

Updated: 13 Jul 2023, 09:03 AM IST