European Commission and UN Attempt to Extend Black Sea Grain Deal Ahead of Expiration

Strategic Insights -

The European Commission is supporting the United Nations and Turkey's efforts to extend the Black Sea Grain Initiative, a deal brokered in July 2022 to alleviate the global food crisis caused by Russia's invasion of Ukraine. The deal, set to expire on Monday, allows Ukraine to export grain through the Black Sea. The European Commission is considering connecting a Russian bank, Rosselkhozbank, to the international payment network SWIFT to facilitate grain and fertilizer transactions. Meanwhile, UN Secretary-General Antonio Guterres has proposed extending the deal for several months to give the EU time to connect Rosselkhozbank to SWIFT.

Key Takeaways:

  • The Black Sea Grain Initiative, brokered in July 2022, is set to expire on Monday, with the European Commission and UN attempting to extend it to alleviate the global food crisis.
  • The EU is considering connecting a Russian bank, Rosselkhozbank, to the international payment network SWIFT to facilitate grain and fertilizer transactions.
  • UN Secretary-General Antonio Guterres has proposed extending the deal for several months to give the EU time to connect Rosselkhozbank to SWIFT.
  • Russia has threatened to end the Black Sea grain deal due to unmet demands, including reconnection to SWIFT, which was cut off by the EU in June 2022.
  • The EU and UN are working on alternative payment solutions, including a platform with the African Export-Import Bank and a complex payment system in the City of London.
  • Russia has not taken a final decision on whether to exit the grain deal, with President Putin urging the UN to come up with a satisfactory solution.

Statistics:

  • The Black Sea Grain Initiative was brokered in July 2022.
  • The deal allows Ukraine to export grain through the Black Sea, making it one of the world's leading grain exporters.
  • Rosselkhozbank was cut off from SWIFT by the EU in June 2022.
  • JPMorgan Chase & Co has started processing some Russian grain export payments as a workaround to the lack of access to SWIFT.
  • The UN is working with the African Export-Import Bank to create a platform to help process transactions for Russian exports of grain and fertilizer to Africa.

Sources:

  • Reuters: "EU to consider connecting Russian bank to SWIFT to end Black Sea grain deal crisis"
  • United Nations: "UN Secretary-General proposes extending Black Sea grain deal for several months"
  • European Union: "European Commission supports extension of Black Sea Grain Initiative"
  • Russian President Putin's statement on Russian state television, quoted in Reuters.