Moscow says JPMorgan stops processing Russia grain payments

Payments channel via the American bank was an alternative to SWIFT system for the Russian Agricultural Bank.

Rosselkhozbank was cut off from the SWIFT international payments

BY LEONIE CATER
AUGUST 5, 2023 

U.S. bank JPMorgan has stopped processing payments for the Russian Agricultural Bank, Russia's Foreign Ministry said on Friday.

The Russian Agricultural Bank, or Rosselkhozbank, was cut off from the SWIFT international payments system by the European Union last year following Russia's invasion of Ukraine. According to Reuters, JPMorgan had been handling some Russian grain export payments in recent months.

"The Western capitals and the U.N. tried to present the direct channel established between Rosselkhozbank and American JPMorgan as an alternative to [the SWIFT system], but even this channel was cut off on August 2," Russian Foreign Ministry spokesperson Maria Zakharova said in a statement.

The U.S. State Department and JPMorgan did not immediately respond to requests for comment.

Russia killed off the Black Sea Grain Initiative — a U.N.-brokered accord that had allowed Ukraine to export tens of millions of tons of grains and oilseeds over the past year despite the war — last month, saying the U.N. and Western countries failed to meet Moscow's demands for continuing with the agreement.

In her statement, Zakharova called on countries to "resolve the system-related hurdles" including "reconnecting Rosselkhozbank to SWIFT, ... re-establishing transport logistics and insurance coverage; and restoring Russian companies’ access to their foreign assets." Only then will it "be possible to consider the resumption of the Black Sea Initiative with the announced humanitarian goals," she added.

The EU’s top diplomat, Josep Borrell, has argued that the “main beneficiary of blocking the [Black Sea grain deal] is Russia and its agriculture sector,” in a letter dated July 31, first reported by Reuters and also seen by POLITICO. “Russia will further benefit from higher food prices and increase its own market share in the global grain market by severely limiting its main competitor’s capacity to export," Borrell said in the letter to developing and G20 countries.

Zakharova's statement came ahead of a Ukraine-focused summit being hosted by Saudi Arabia this weekend. According to a briefing document seen by POLITICO, this gathering in Jeddah will revolve around topics including food and energy security; release of prisoners and forcibly deported people, including children; ecological security; and the possibility of a war crimes tribunal.