FT: EU mulls concession to Russia to salvage ‘grain deal’

The European Union is considering allowing Rosselkhozbank [Russian Agricultural Bank], a sanctioned Russian bank, to set up a subsidiary to reconnect to the SWIFT global financial network, thus safeguarding the threatened Black Sea grain deal, the FInancial Times reports.

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The plan was proposed by Moscow through negotiations brokered by the UN and discussed by EU leaders at a summit in Brussels last week, "as a potential means to convince Moscow to extend the Black Sea agreement beyond its July 17 expiry date", per the FT.

The idea was seen by its supporters as "the least worst option" to secure Russia’s support for the deal’s extension, two people told the publication.

Connecting Rosselkhozbank to SWIFT, from which the bank was cut off under sanctions, is one of Russia’s key demands to salvage the so-called grain corridor.

Back in September 2022, Russian foreign minister Sergei Lavrov said Rosselkhozbank was handling "the lion's share of all fertiliser and food transactions".

Complicating the issue is that the bank is fully owned by the Kremlin, the Financial Times notes.

Until 2018, its chairman of the board was Dmitry Patrushev, Russia’s current agriculture minister and the son of Russian security council secretary Nikolai Patrushev, who has been instrumental in pushing the war against Ukraine.

Sberbank, Rosselkhozbank, and Moscow Credit Bank were disconnected from the SWIFT system as part of the EU’s sanctions against Russia adopted last June.

Before that, Russia had been one of the top three countries in terms of SWIFT transactions, and ranked tenth in terms of their volume.

The Black Sea grain initiative, which allowed for safe passage of agricultural products from three Ukrainian ports, is set to expire on 17 July.