EU Considers Concession to Rosselkhozbank to Safeguard Black Sea Grain Deal

In an effort to safeguard the Black Sea grain deal, Brussels is considering a proposal for Russian Agricultural Bank, also known as Rosselkhozbank, to set up a subsidiary to reconnect to the global financial network, the Financial Times reports.

Citing sources with knowledge of the matter, the paper said that the bank unit would be allowed to handle payments related to grain exports.

Rosselkhozbank’s new unit would be allowed to use the SWIFT global financial messaging system despite the US and Europe’s sanctions last year that closed SWIFT to the largest Russian banks due to the invasion of Ukraine.

Since the bank under sanctions, the move is considered as a sop to Moscow which noted said last week it sees no reason to extend the deal beyond July 17 whereas Russia’s envoy to the UN in Geneva, Gennady Gatilov, stressed Monday there were no grounds to maintain the “status quo” of the grain deal since the implementation of Moscow’s conditions for the extensions of the agreement was “stalling.”

Russia is demanding, among other things, resumption of supplies of its farm machinery and parts, and removal of curbs on insurance and reinsurance.

Brokered between Russia and Ukraine by the UN and Turkey in July 2022, the Black Sea grain deal that allows Ukraine to safely export food from Black Sea ports trapped by Russia’s invasion to global markets, aimed to prevent a global food crisis.

UN expressed concern last week that despite applications being made by 29 vessels, no new ships had been registered under the Black Sea deal since June 26.

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