UNITED NATIONS, July 12 (Reuters) – UN Secretary General Antonio Guterres has proposed to Russian President Vladimir Putin that he extend an agreement allowing the safe export of grain to the Black Sea from Ukraine in exchange for connecting a subsidiary of the agricultural bank of Russia to SWIFT. international payment system, sources told Reuters.
Russia has threatened to abandon the grain deal, which expires on Monday, because various demands to ship their own grain and fertilizer abroad have not been met. The last two ships traveling under the Black Sea deal are currently loading cargo at the Ukrainian port of Odessa ahead of the deadline.
A key demand from Moscow is the reconnection of the Russian agricultural bank Rosselkhozbank to the SWIFT international payment network. It was cut by the European Union in June 2022 due to Russia’s invasion of Ukraine. An EU spokesman said in May that the EU was not considering restoring Russian banks.
However, the EU is considering connecting to SWIFT, a subsidiary of Rosselkhozbank, to specifically allow grain and fertilizer transactions, three sources familiar with the discussions told Reuters on Wednesday. The European Commission did not immediately respond to a request for comment.
Guterres has proposed to Putin that Russia allow the Black Sea grains deal to continue for several months, giving the EU time to connect a Rosselkhozbank subsidiary to SWIFT, two of those sources familiar with the discussions told Reuters.
Guterres sent a letter to Putin on Tuesday proposing a way forward to further facilitate Russian food and fertilizer exports and ensure continued shipments of Ukrainian grain to the Black Sea, a UN spokesman said on Wednesday.
“The goal is to remove obstacles affecting financial transactions through the Russian Agricultural Bank, one of the main concerns expressed by the Russian Federation, and at the same time allow the continuous flow of Ukrainian grain through the Black Sea,” he told journalists UN spokesman Stephane Dujarric.
He did not elaborate on the proposal, but added that Guterres was engaged with all relevant parties on the issue and was willing to further discuss his proposal with Russia.
A Kremlin spokesman did not immediately respond to a request for comment.
The United Nations and Turkey negotiated the Black Sea Grain Initiative with Russia and Ukraine in July 2022 to help alleviate a global food crisis made worse by Moscow’s invasion and blockade of Ukrainian ports.
To convince Russia to agree to the Black Sea deal, a three-year memorandum of understanding was signed at the same time under which UN officials agreed to help Russia bring its food and fertilizer exports to foreign markets.
While Russian food and fertilizer exports are not subject to Western sanctions imposed after the invasion of Ukraine, Moscow says restrictions on payments, logistics and insurance have become a barrier to shipments.
As a solution to the lack of access to SWIFT, UN officials have gotten US bank JPMorgan Chase & Co JPM.N to start processing some Russian grain export payments with guarantee of the US government
The United Nations is also working with the African Export-Import Bank (Afreximbank) to create a platform to help process transactions for Russian grain and fertilizer exports to Africa, the top UN trade official told Reuters last month.
Reporting by Michelle Nichols; edited by Kanishka Singh, Mark Heinrich and Diane Craft
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