bne IntelliNews – Turkey proposes reconnecting a subsidiary of the Russian Agricultural bank to SWIFT to restart Black Sea Grain Initiative

The United Nations, in collaboration with Turkey, has offered a new proposal to remove the SWIFT sanctions that were imposed only days after Russia’s invasion of Ukraine in February 2022 on a subsidiary of the Russian Agricultural bank (Rosselkhozbank) as a compromise to restart the stalled Black Sea Grain Initiative, Ukrainska Pravda reported on September 3.

The proposals come as Turkey attempts to broker a deal between the West and Russia after the Kremlin pulled out of the agreement, claiming that the West had failed to honour its obligations.

The Kremlin wants the Russian Agricultural Bank reconnected to the SWIFT system and frozen assets of Russian fertiliser producing companies in Europe to be unfrozen. It is also demanding the restoration of agricultural machinery and spare parts supplies to Russia, and the removal of constraints on ship insurance and port access.

Turkish Foreign Minister Hakan Fidan, during a joint press conference with his Russian counterpart Sergey Lavrov in Moscow, announced the UN’s readiness to prepare a new package of proposals involving Turkey, which they deem could serve as a viable foundation for the revival of the initiative.

The ongoing diplomatic efforts by Turkey, aligned with the UN, to rejuvenate the Black Sea Grain Initiative are seen as a preferred course, given the security and cost concerns associated with alternative agreements.

Russia’s partners in Africa, Turkey and China all want to see the deal revived. Africa is vulnerable to a food crisis without Russian and Ukrainian grain exports. China was the biggest importer of Ukrainian corn last year, the main export crop. And Turkey is the world’s biggest producer of flour that relies on Russian and Ukrainian grain as an input.

Moreover, with its own silos full to overflowing, Russia needs to increase its own exports of grain, one of its biggest foreign exchange earners.

Maria Zakharova, representative of the Russian Foreign Ministry, responded to Anadolu’s report, noting that the new set of UN proposals aims to reconnect Rosselkhozbank to SWIFT and unfreeze assets of Russian companies. She highlighted that these points were previously considered, but implementation never transpired.

Earlier this year, Reuters reported that UN Secretary-General António Guterres proposed extending the Black Sea Grain Initiative to Russian President Vladimir Putin, contingent on the reconnection of Rosselkhozbank’s subsidiary to the SWIFT system.