MOSCOW: The United States gave JPMorgan Chase & Co permission to process payments for the Russian Agricultural Bank, but the temporary arrangement was no substitute for reconnecting the bank to the SWIFT payment system, a Russian source told Reuters.
Access to SWIFT is one of Russia’s main demands in negotiations over the future of the Black Sea grain deal. Moscow has also repeatedly said a deal depends on the West removing obstacles to Russian grain and fertiliser exports.
The Russian source, who spoke on condition of anonymity, said the U.S. Office of Foreign Assets Control had allowed the transactions.
“The transactions are difficult,” said the Russian source, who has knowledge of the situation.
The JPMorgan route was proposed as an alternative to reconnecting Russian Agricultural Bank (known as Rosselkhozbank) to SWIFT, but could be terminated at any time, the source said.
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“This cannot replace SWIFT,” the source said.
JPMorgan did not reply to requests for comment.
Russian Foreign Minister Sergei Lavrov on Tuesday told a briefing at the United Nations that one bank “kindly consented to finance one operation,” but that this was not an acceptable long-term solution. Lavrov did not name the bank.
A different source familiar with the transaction said the U.S. State Department and U.S. Treasury had asked JPMorgan to carry out the “very limited and highly monitored” transaction in relation to the export of agricultural materials, which occurred this month.
Russia is usually the top exporter of wheat.
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Together with Ukraine, it is one of the world’s biggest agricultural producers. Both are major players in the wheat, barley, maize, rapeseed, rapeseed oil, sunflower seed and sunflower oil markets. Russia is also dominant in the fertiliser market.
The conflict in Ukraine has significantly changed the flow of exports. Both Ukraine and Russia say the Black Sea grain deal, which allowed Ukrainian exports via the Black Sea, is in danger of collapsing.
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