According to the Financial Times, the European Union (EU) is contemplating a proposition that would involve the establishment of a subsidiary by the Russian Agricultural Bank. This move is seen as an attempt to restore the bank’s connection to the global financial network, serving as a gesture to Moscow.
The primary goal of this initiative is to protect the Black Sea grain deal, which enables Ukraine to export food to international markets.
The Russian Agricultural Bank currently faces sanctions, prompting the EU to explore potential measures to ensure the continuity of the grain deal. Russia recently expressed its reluctance to extend the agreement beyond July 17, citing the “outrageous” behavior of the West regarding the agreement. Nevertheless, Russia reassured poorer nations that it would continue exporting grain.
As per undisclosed sources mentioned by the Financial Times, Moscow has proposed the creation of a bank subsidiary to manage payments related to grain exports. This new unit would be granted access to the SWIFT global financial messaging system, which had previously been closed off to major Russian banks due to Russia’s invasion of Ukraine.
In response to the Financial Times report, Olha Trofimtseva, Ukraine’s foreign ministry ambassador at large, acknowledged the EU’s intention to facilitate the grain deal. She expressed mixed sentiments, stating, “On one hand, any opportunities for agricultural exports are beneficial.
On the other hand, making concessions to a blackmailer would only encourage further blackmail.” Trofimtseva emphasized the well-known principle that fulfilling a blackmailer’s demands does not deter them but prompts them to make new demands.
Russia and Ukraine are significant players in global grain and oilseed markets, as two of the world’s leading agricultural producers. They contribute to the trade of commodities such as wheat, barley, rapeseed, sunflower oil, and fertilizers.
Besides the restoration of SWIFT access, Russia is also seeking the resumption of farm machinery and parts supplies, as well as the removal of insurance and reinsurance restrictions.
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