EU weighs concession to Russian bank over Black Sea grain deal

The European Union is considering a proposal for Russian Agricultural Bank to set up a subsidiary to reconnect to the global financial network as a sop to Moscow, the Financial Times said on Monday.

With the bank, also known as Rosselkhozbank, under sanctions, the move aims to safeguard the Black Sea grain deal that lets Ukraine export food to global markets, the newspaper said.

The step comes after Russia said last week it saw no reason to extend the grain deal beyond July 17, as the West had acted in an “outrageous” way over the agreement, though it assured poor countries that Russian grain exports would continue.

Moscow’s plan, proposed through U.N.-brokered talks, would let the bank unit handle payments related to grain exports, the paper said, citing sources with knowledge of the matter.

The new unit would be allowed to use the SWIFT global financial messaging system, which was closed to the largest Russian banks after the invasion of Ukraine last year, it added.

As two of the world’s top agricultural producers, Russia and Ukraine are major players in grain and oilseed markets ranging from wheat and barley to rapeseed and sunflower oil. Russia is also dominant in the fertiliser market.

Apart from the restoration of SWIFT access, Russia is also seeking resumption of supplies of farm machinery and parts, and removal of curbs on insurance and reinsurance.