Russian Agricultural Bank not considering creating subsidiary to connect to SWIFT as part of grain initiative - first deputy chairman
ST. PETERSBURG. July 6 (Interfax) - Russian Agricultural Bank (RusAg) has not advanced the idea of resolving the settlement matter as part of the Black Sea Grain Initiative by creating a new entity in order to connect to SWIFT, nor is the bank considering the idea, Russian Agricultural Bank First Deputy Chairman Kirill Levin said.
The Financial Times reported the story on Monday. According to the FT's sources, Moscow had advanced the idea, and it was discussed at a summit of European Union leaders in Brussels last week. The parties said that the idea of creating a subsidiary of the state bank, which would be connected to SWIFT, was "the least worst option" in order to secure support for extending the grain initiative, the FT reported.
"We are not considering the option of creating a Russian Agricultural Bank subsidiary to connect to SWIFT as part of the grain initiative in principle. These are all the fantasies of the source that posted the information. We have never proposed the option of opening a subsidiary within an 'unfriendly' jurisdiction. However, the sanctions text does mention that SWIFT could be used by bank subsidiaries located abroad, and by those subsidiaries in which Russia has less than 50% financial participation," Levin told Interfax on the sidelines of the Financial Congress of the Bank of Russia.
Levin said that the bank currently renders payments through JP Morgan via a dedicated line, and payments are rendered in dollars. "Time will tell how the situation could develop going forward," he concluded.
The Russian Foreign Ministry has said, commenting on the FT story, that such reports look like "an attempt to create the appearance of a breakthrough in normalizing Russian agricultural exports, as envisioned by the Russia-UN Memorandum." "In fact, however, there has been no progress in implementing this agreement. Russian food and fertilizer deliveries to global markets remain blocked due to numerous unlawful unilateral sanctions imposed on our country by the United States, the EU, and Britain," the ministry said.
The grain deal was concluded in Istanbul on July 22, 2022. The UN, Russia, Turkey and Ukraine signed two documents to open a grain corridor from three Ukrainian ports Chernomorsk, Odessa and Yuzhny, and to lift restrictions on Russian food and fertilizer exports.
The initiative was prolonged in November 2022 for 120 days, until March, and then it was prolonged again twice for two months - it is now effective until July 17.
The Russian Foreign Ministry said in late May that the sides would have to consider an alternative to the Black Sea Grain Initiative unless Russian Agricultural Bank is reconnected to SWIFT and progress is made in resolving other "systemic" problems blocking Russian agricultural exports.
UN Secretary-General Antonio Guterres said in June that he was working hard on extending the grain deal and expressed concern about Russia's possible withdrawal from it in July.
Russian President Vladimir Putin said later that Moscow was considering its possible withdrawal from the Black Sea Grain Initiative. He said over 40% of Ukrainian grain went to wealthy EU countries instead of the poorest nations. As the main recipients of Ukrainian grain, they benefit from lower prices and Ukraine receives payment, he said.