UN asks Putin to extend Black Sea deal in exchange for access to SWIFT payment system

Accordingly, the leader in Moscow may consider extending the agreement to allow safe grain exports from Ukraine across the Black Sea in exchange for connecting a subsidiary of Russia's agricultural bank to the international payment system SWIFT.

Russia had threatened to scrap the grain deal, which expires on July 17, because some of its requirements for grain and fertilizer exports had not been met. Two Black Sea vessels are currently loading cargoes at the Ukrainian port of Odessa ahead of the deal's deadline.

A key demand from Moscow is to reconnect Russian agricultural bank Rosselkhozbank to the international payment network SWIFT, which the European Union severed in June 2022 after the conflict in Ukraine broke out. An EU spokesman said in May that the EU was not currently considering restoring connections for Russian banks.

However, according to three Reuters sources, the EU is considering a SWIFT connection for a subsidiary of Rosselkhozbank to facilitate grain and fertilizer transactions. The European Commission has not yet responded to this information.

Two of the three sources also revealed that Mr. Guterres proposed to Mr. Putin that Russia allow the Black Sea grain deal to continue for a few months, giving the EU time to connect a subsidiary of Rosselkhozbank to SWIFT.

On July 12, a UN spokesman said that Secretary-General Guterres sent a letter to Putin on July 11, proposing further steps to further facilitate Russian food and fertilizer exports and ensure continued shipments of Ukrainian grain across the Black Sea.

“The goal is to remove barriers affecting financial transactions through the Russian Agricultural Bank, a major concern of the Russian Federation, and to allow the continued flow of Ukrainian grain through the Black Sea,” UN spokesman Stephane Dujarric told reporters.

He did not provide further details about the proposal, but added that Mr. Guterres had been in contact with all relevant parties on the issue and was ready to discuss his proposal further with Russia.

A Kremlin spokesman has not yet responded to a request for comment on the report.

The United Nations and Türkiye have brokered the launch of the Black Sea Grains Initiative with Russia and Ukraine in July 2022 to help ease the global food crisis worsened by the Russia-Ukraine conflict and blockades of many ports.

To persuade 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 support Russia’s exports of food and fertilizer to foreign markets. Russia’s food and fertilizer exports are not subject to Western sanctions, but payment, logistics and insurance restrictions have become barriers to shipments.

Seeking an alternative to the lack of access to the SWIFT system, UN officials have asked US bank JPMorgan Chase to begin processing some Russian grain export payments with guarantees from the US government.

Last month, a senior UN trade official also revealed that they were working with the African Export-Import Bank (Afreximbank) to create a platform to help process Russian grain and fertilizer exports to Africa.