The United States has permitted JPMorgan Chase & Co to process payments for the Russian Agricultural Bank, according to a Russian source who spoke to Reuters. However, the temporary arrangement is not a suitable alternative to reconnecting the bank to the SWIFT payment system.
Russia's access to SWIFT is a key demand in negotiations over the future of the Black Sea grain export deal, which the United Nations says helps address the global food crisis exacerbated by the Ukraine conflict. The Kremlin has repeatedly warned that the deal will not be renewed beyond May 18 unless the West removes barriers to Russian grain and fertilizer exports, including financing and insurance.
The anonymous Russian source disclosed that the U.S. Office of Foreign Assets Control had authorized the transaction. "The transactions are difficult," the source stated. The source added that the JPMorgan route, proposed as an alternative to reconnecting Rosselkhozbank (Russian Agricultural Bank) to SWIFT, could be terminated at any moment. "This cannot replace SWIFT," they emphasized.
Both JPMorgan and Russian Agricultural Bank have not commented on the matter.
Russian Foreign Minister Sergei Lavrov, during a briefing at the United Nations, mentioned that one bank "kindly consented to finance one operation," but did not consider it a viable long-term solution. Lavrov did not name the bank involved.
Another source familiar with the transaction revealed that the U.S. State Department and U.S. Treasury had requested JPMorgan to conduct the "very limited and highly monitored" transaction concerning the export of agricultural materials earlier this month. The U.S. Treasury declined to comment.
Russia, typically the world's top wheat exporter, signed a deal in July with the United Nations to help eliminate obstacles to grain and fertilizer exports. While these exports are not subject to Western sanctions imposed after the February 2022 invasion of Ukraine, Moscow argues that restrictions on payments, logistics, and insurance hinder shipments.
One of Russia's primary demands is for Rosselkhozbank to be reconnected to the SWIFT banking system. Other demands include access to ports, resumption of the Togliatti-Odesa ammonia pipeline, and unblocking assets and accounts of Russian companies involved in food and fertilizer exports.
U.N. Secretary-General Antonio Guterres sent a letter to President Vladimir Putin outlining a way forward aimed at improving, extending, and expanding the Ukraine Black Sea grain deal. The Kremlin confirmed on Wednesday that the letter was received through diplomatic channels and is under consideration.
