Russia seeks to lift sanctions from one of its state banks

4 November 2022, 11:43 PM
Russia asks to lift sanctions against Rosselkhozbank (Photo:Website of Rosselkhozbank)

Russia asks to lift sanctions against Rosselkhozbank (Photo:Website of Rosselkhozbank)

During negotiations to extend the agreement on food exports from Ukraine via the Black Sea, Russia signaled it wants sanctions lifted from the state-owned Russian Agricultural Bank, Reuters reported on Nov. 4, citing four informed sources.

According to the sources, Russia asked Western countries to allow Russian Agricultural Bank to be allowed access to its correspondent accounts in foreign banks, making an exemption from U.S. and EU sanctions.

Two of the Reuters sources said that would allow the bank to make payments for Russian grain and other food products. Prior to latest round of sanctions, such payments were handled by international banks and subsidiaries of other Russian banks in Switzerland.

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Russia said sanctions imposed after the invasion of Ukraine make it difficult for Russian grain and fertilizer traders to process transactions related to freight, insurance, and port services. Moscow says that while food exports from Russia are not subject to Western sanctions, banking restrictions effectively undermine the ability of Russian agricultural companies to sell their produce abroad.

The report did not specify whether Russia’s request was granted or not.

Reuter’s source at the UN, speaking on conditions of anonymity, said that simplifying payments for Russian food and fertilizers through Russian Agricultural Bank is being discussed with the EU and other parties.

If Russia's request is granted, the role of Russian Agricultural Bank in the grain trade in Russia could increase significantly.

Eduard Zernin, chairman of the board of the Union of Grain Exporters of Russia, says that the United States and the EU are proposing to appoint one authorized correspondent bank for Russian Agricultural Bank to make payments through.

From 2010 to 2018, Dmitry Patrushev – Russia’s Security Council Secretary Nikolai Patrushev’s son – served as the Chairman of the Board at Russian Agricultural Bank. Patrushev and his son were both sanctioned by the United States and the EU over the Russian invasion of Ukraine.

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