September 22, 2023

Photo of Vladimir Putin addressing the general debate of the United Nation General Assembly’s seventieth session. C/O United Nations.

The United Nations Secretary General Antonio Guterres has offered Vladimir Putin a trade: a (partial) return to the international SWIFT banking system in exchange for shipping guarantees on grain transports in the Black Sea, reports Reuters.

Russia and the U.N. agreed upon the Black Sea Grain Initiative in July 2022. Turkey brokered the deal, which allows shipments of grain to leave the Ukraine’s three Black Sea ports in Odesa undisturbed.

Wheat shipments from Ukraine to Africa constituted 12% of the continent’s total wheat imports in 2022, with an additional 37% coming from Russia, according to the U.N. The Initiative assumes all parties will provide “maximum assurances regarding a safe and secure environment for all vessels.”

The parties agreed to a 120 day period of safe transport on July 22, 2022, renewing the deal in November 2022 and March 2023. Now Russia is threatening to decline a third renewal over concerns about their own grain and fertilizer exports’ access to foreign markets as originally promised in the deal, according to Reuters.

In tandem with the Initiative, the U.N. and Russia agreed upon the Memorandum of Understanding between the Russian Federation and the Secretariat of the United Nations on promoting Russian food products and fertilizers on the world markets. The three year deal provides that the U.N. will institute a number of measures “to facilitate the unimpeded access to global markets for food and fertilizers, including the raw materials required to produce fertilizers (including ammonia), originating from the Russian Federation.”

Though hundreds of individuals, businesses and entire industries in Russia have been sanctioned by the West in the wake of the Ukrainian invasion, fertilizer and agriculture have not been included. Russia argues that restrictions on payments and insurance amount to a de facto ban on that sector anyways. The United States’ Ambassador to the U.N. Linda Thomas-Greenfield dismissed Russia’s concerns saying Russia “is exporting grain and fertilizer at the same levels, if not higher, than before the full scale invasion.”

Russia is exporting more grain than prewar levels – Putin estimates they’ll push nearly 60 million tons of grain this year compared to 38.1 million last year. However, their exports of potassium-based fertilizers, or potash, went down 37% in 2022 according to Reuters. In June Putin told reporters “Unfortunately, we were once again cheated – nothing was done in terms of liberalising the supply of our grain to foreign markets. There were a lot of conditions that the Westerners had to fulfill under the leadership of the U.N. Nothing has been done.”

In a March letter to the U.N. Russia demanded their agricultural bank Rosselkhozbank be reconnected to the global SWIFT payment system. It appears the U.N. is now ready to appease that demand.

Russia was cut off from the SWIFT system by the EU in June 2022 in response to the ongoing war in Ukraine. SWIFT stands for Society of Worldwide Interbank Financial Telecommunications. It is a secure, globally centralized messaging network that allows banks and financial institutes to communicate with each other. Used by over 200 countries, it averages 42 million messages per day. Half of the world’s high value payments that cross international borders, according to the Canadian Broadcasting Company.

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