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Çarşamba, Eylül 27, 2023

Grain Delivery Will Continue Despite Russia’s Withdrawal From Grain Deal

Mutlaka Oku

By Janet Ekstract

ISTANBUL- On Monday, U.N. Secretary-General Antonio Guterres issued a formal statement regarding Russia’s termination of the Black Sea Grain Initiative, expressing his “deep regret” with Russia’s decision. Guterres warned about the dangers, particularly amidst soaring global inflation and extreme climate change events – that global food security for millions who are in desperate need of Ukrainian and Russian grain and foodstuff is in jeopardy. As Guterres stated: “This Initiative has ensured the safe passage of over 32 million metric tons of food commodities from Ukrainian ports.” He added: “The Black Sea Initiative – together with the Memorandum of Understanding on facilitating exports of Russian food products and fertilizers – have been a lifeline for global food security and a beacon of hope in a troubled world.”

As the U.N. chief’s statement further explained: “With the decision to terminate the Black Sea Initiative, the Russian Federation also terminated its commitment to “facilitate the unimpreded export of food, sunflower oil, and fertilizers from Ukrainian controlled Black Sea Ports” – as expressed in Paragraph 1 of the Memorandum of Understanding between the Russian Federation and the United Nations.” Guterres said that “struggling people everywhere and developing countries don’t have a choice.” The secretary-general, referring to the letter he sent Putin last Friday, said he is “aware of some obstacles that remained in the foreign trade of Russian food and fertilizer” but that he outlined a “new proposal” in his letter to Putin. A significant portion of what Guterres wrote Putin is stated as follows: “Since the signing of the Memorandum of Understanding, and also taking into account the measures adopted by the Russian Federation, Russian grain trade has reached high export volumes and fertilizer markets are stabilizing with Russian exports nearing full recovery, as stated by the Russian Union of Grain Exporters and Russian Fertilizer Producers Association.”

Guterres said: “I am deeply disappointed that my proposals went unheeded.” The U.N. chief went on to detail in his statement that Russian demands have been met and that previously frozen assets of fertilizer companies and others were actually unfrozen to facilitate the speedy movement of grain export for Russia and Ukraine. As Guterres stated: “Namely that we have: “also delivered breakthroughs even in some of the most challenging areas of trade facilitation.  The United Nations has helped to secure the issuance of: U.S. General License 6B and 6C, which are especially important in light of the extraterritorial nature of US sanctions as these licenses apply not only to US imports from the Russian Federation but also to all countries concerned with their sanctions regime; two UK General Licenses on finance and trade in food and fertilizers, which are especially important for the insurance market; and the derogation by the European Union in its ninth sanctions package, which allowed, for example, the unfreezing of assets of fertilizer companies, as well as a range of clarifications, Frequently Asked Questions, fact sheets and other guidance to the private sector. “

Though Russia claims nothing has been done to facilitate its grain and fertilizer exports, U.S. Secretary of State Antony Blinken said that was patently not true. And as further information indicates in Guterre’s statement, everything is being done with Russia in mind. As the statement goes to express: “These regulatory frameworks, as well as extensive engagement with the private sector to find dedicated solutions across banking and insurance sectors have led to the progressive normalization of trading conditions since July 2022, including declining freight and insurance rates.  Bulk vessel port calls at Russian ports have also remained mostly steady.” 

In addition, the U.N. chief’s statement said: “We have built a bespoke payments mechanism for the Russian Agricultural Bank through JP Morgan outside of SWIFT.” While also describing how: “The United Nations also has worked closely with the key Russian fertilizer groups to unblock assets … amounting to over 70 per cent of the frozen assets in the original list submitted to us by the Russian Federation in November 2022.  Moreover, the United Nations has facilitated… the humanitarian donations of fertilizer to most in-need countries in Africa – overcoming profound complexities of the operation.”

Contrary to Putin’s claims, the Guterres statement commented: “the Russian Federation has highlighted the issue of access to SWIFT by the Russian Agricultural Bank as a key factor influencing its decisions.  On this front, the United Nations recently brokered a concrete proposal to enable a subsidiary of the Russian Agricultural Bank to regain access to SWIFT with the European Commission.  The key element underpinning this proposal’s political viability is that it can be implemented within existing regulations.  We see this as a unique political opening, stemming from a genuine desire to protect global food security beyond 17 July.” Guterres made it clear that efforts “will not stop” to “facilitate the unimpeded access to global markets for food products and fertilizers from both Ukraine and the Russian Federation.” Meanwhile, Guterres lauded the Turkish government for being instrumental in facilitating the Black Sea Grain Initiative and said that his efforts will be “taking into account the rise in human suffering that will inevitably result from today’s decision.” Guterres added that the focus will be on finding solutions for delivery of all the foodstuff from both countries. He added this caveat: “At a time when the production and availability of food is being disrupted by conflict, climate change, energy prices and more, these agreements have helped to reduce food prices by over 23 per cent since March last year.”

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