On Friday, Russian Deputy Foreign Minister Sergey Vershinin told reporters that Russia is open to resuming the Black Sea grain deal, if Russia’s primary agricultural lender Rosselkhozbank is reconnected to the SWIFT international payments system.
According to reports in the media, the European Union is considering reconnecting only a subsidiary of the Russian bank to the global financial network in an effort to resume the grain deal.
When Vershinin was asked about the feasibility of using only the subsidiary in this way, he noted that the overseas unit of Rosselkhozbank in Luxembourg which would be used is set to terminate its operations in October. He went on to add, that standing up a new separate banking structure would require both time, and a “serious investment.”
He said, “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,” adding that given the current situation, “we just need a ‘re-SWIFT’ of the bank, without restrictions.”
Rosselkhozbank was disconnected from the SWIFT system as part of sanctions imposed on Russia by the Western powers over the war in Ukraine. As the West has sought to produce an extension of the Black Sea grain deal to allow Ukrainian grain to enter the global market, Russia has demanded the reconnection of the lender as a precondition of securing its agreement.
Reuters has reported that UN Secretary-General Antonio Guterres has made a proposal to Russian President Vladimir Putin that the EU would support giving partial access to SWIFT in return for the resumption of the grain deal. Guterres also proposed that the Kremlin allow the agreement to be prolonged for several months while the EU looks to reconnect the subsidiary of Rosselkhozbank to the payment system.
Vershinin responded, “We have been receiving promises for an entire year and under these pledges they demanded a concrete decision from us.”
He went on to say, that Russia has laid out its position “quite clearly” and now it wants, “not promises, but results. And then we will be able to resume these joint efforts to supply grain to the global market.”
When addressing the issue of acquiring insurance discounts for Russian ships, the Deputy Foreign Minister noted that “all ports of the Russian Federation have been declared a military zone,” and that produces “an automatic increase in insurance rates, up to a level that is actually prohibitive for any transactions.”
On Monday, Russia withdrew from the Black Sea Grain Initiative, noting that the United States had not lifted restrictions which had been imposed as a result of the Russian military action in Ukraine, including reconnecting Russian banks to the SWIFT system, restarting a key ammonia pipeline to allow Russia to transfer ammonia for sale, allowing the import into Russia of agricultural machinery and parts, and removing restrictions on transportation insurance and other logistical services for shipping.
Russia has guaranteed nations which require access to Russian agricultural exports, that its deliveries will continue, despite the scrapping of the grain deal.
