Critical approval from the US for Russia’s agriculture payments

The US has authorized investment bank JPMorgan Chase & Co to process payments to Russian Agricultural Bank (Rosselkhozbank), but this facility will not replace the SWIFT messaging system.

The reintegration of Ziraat Bank in the SWIFT messaging system was one of Russia’s main demands for the renewal of the Black Sea grain corridor agreement. Russia has stated that it will not extend the agreement unless the West lifts restrictions on Russian grain and fertilizer exports.

The Russian source told Reuters, “JPMorgan has licensed OFAC (US Office of Foreign Asset Control) to process payments for agricultural exports, but the process is difficult. This (method) cannot replace SWIFT.”

The US State Department and the US Treasury requested JPMorgan to conduct “very limited and closely observed” transactions on this month’s exports of agricultural products, another source familiar with the transactions said.

Gennady Gatilov, Russia’s representative to the United Nations (UN), announced that they demanded the reintegration of the Russian Ziraat Bank into the SWIFT system and that they did not want the bank’s authority to transact in different cases “on a case-by-case basis”.