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JPMorgan Bank stopped handling Russian Agricultural Bank transactions

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Russia said the US bank JPMorgan stopped processing payments to the Russian Agricultural Bank this week. Moscow demanded that Washington take action to help Russian grain and fertilizer reach global markets.

JPMorgan has been handling some Russian grain export payments for the past few months with assurances from Washington. However, this cooperation was discontinued this week, it announced on Friday Russian Ministry of Foreign Affairs.

“The direct channel between the Russian Agricultural Bank and JPMorgan… was closed on August 2,” Foreign Ministry spokeswoman Maria Zakharova told Russian media.

United NationsDepartment of State USA and JPMorgan declined to comment.

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JPMorgan HeadquartersShutterstock

Moscow allowed the safe export of Ukrainian grain through the Black Sea for the past year under an agreement it terminated on July 17. Russia has a list of demands it demands before it comes back to an agreement.

As part of a related pact – also negotiated in July 2022 – UN officials agreed to help Russian food and fertilizer exports reach global markets.

“As soon as that happens, the deal will be renewed immediately,” a Kremlin spokesman told reporters on Friday Dmitry Peskov.

Russia’s demands under the Grain Pact

A key Russian demand was to reconnect the Russian Agricultural Bank to the international SWIFT payment system. It was cut off from this system by the European Union in June 2022 after Russia invaded Ukraine.

Zakharova reported that the West and the UN “tried to present (JPMorgan payment processing) as a working alternative to SWIFT.”

US Secretary of State Anthony Blinken he told reporters on Thursday that Washington would continue to do “whatever is necessary” to ensure Russia’s free food exports if the Black Sea grain deal was resumed.

Photo from August 4, 2023.

Grain from UkrainePhoto from August 4, 2023.PAP/EPA/SERGEY DOLZHENKO

While Russian food and fertilizer exports are not subject to Western sanctions imposed after Russia invaded Ukraine in February 2022, Moscow says restrictions on payments, logistics and insurance hinder supplies.

Let Russia be clear

The US State Department’s top sanctions official, James O’Brien, said on Friday that Russia needs to be clear about what it is asking for and what will constitute success, suggesting that it should be determining how much food and fertilizer is to be exported.

“A number of different demands have been made, and they all involve various Russian institutions that do not have access to private sector services,” he told reporters. “We have made it clear that we are ready to help with any of these issues,” he added.

O’Brien said that “Russia is exporting record amounts of grain.” He added that if “the measure is the world’s food … Russia’s complaints amount to minor allegations about a system that works very well.”

Last month, the Russian Grain Union said Russia could export at least 55 million tons of grain in the 2023/24 trading season, slightly less than the estimated record high of 57 million tons in the 2022/23 season.

According to data from the Ministry of Agriculture, Ukrainian exports for the 2022/23 season amounted to almost 49 million tons. Almost 33 million tons of this were shipped under the Black Sea Agreement.

Western countries have accused Russia of using food as a weapon by abandoning the Black Sea deal that helped lower global food prices, and then carrying out repeated raids on Ukrainian ports and grain warehouses.

The United Nations recently indicated that the deal helped everyone as it lowered prices by 23%. compared to the record-high weeks following the Russian invasion.

Main photo source: EPA/YURI KOCHETKOV

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