Reuters: Russian Bank Could Return to SWIFT Banking System

On September 8, Reuters news agency reported that Russia’s major agricultural lender, Rosselkhozbank, might obtain access to the SWIFT international banking system as early as this month, according to a UN letter dating back to late August. The news agency elaborated that the move was to prompt Moscow to return to the Black Sea grain deal suspended in July this year.

Rosselkhozbank would be able to conduct international banking transactions through its subsidiary in Luxembourg, which would function as an intermediary between the Russian lender and foreign banks, Reuters said, quoting a letter from UN Secretary-General Antonio Guterres to Russian Foreign Minister Sergey Lavrov dated August 28.

The Luxembourg subsidiary, RSHB Capital SA, might ask SWIFT to “effectively enable access” for the bank to its system “immediately,” Guterres supposedly told Lavrov.

“SWIFT has confirmed that RSHB Capital SA would be eligible to apply for membership and access to SWIFT for food and fertilizer transactions, based on its current status as an issuer of debt securities,” the secretary-general stated. “SWIFT has already confirmed that an expedited application process could be possible, bringing the time for effective access within 30 days.”

The Belgium-based financial cooperative society has not published any official statements on the matter thus far.

The UN letter from Guterres reportedly contained other topics, such as a UN co-sponsored insurance facility for Russian food and fertilizer exports. The facility, set up together with the Lloyd’s of London insurance company, could be “ready for operationalization within four to six weeks,” the UN head declared.

Lloyd’s CEO John Neal revealed to Reuters that his company was in discussions with the UN over offering insurance for Ukrainian grain shipments as part of the grain deal.

Although the international organization also pledged to continue attempts to unfreeze Russian assets in the EU related to agriculture and fertilizer trade, it added that Russian companies would still have to request for sanctions exemptions from EU member states individually.

Moscow had previously voiced doubts over the UN proposals, slamming them as yet another series of empty promises and pointing out that no similar measures had been implemented before, based on a statement by the Russian Foreign Ministry.

“Instead of actual exemptions from sanctions, all Russia got was a new dose of promises from the UN Secretariat,” a ministry statement posited. “These recent proposals do not contain any new elements and cannot serve as a foundation for making any tangible progress in terms of bringing our agricultural exports back to normal.”

Russian Foreign Ministry spokeswoman Maria Zakharova posted on her Telegram channel that she did not anticipate the “new” proposals would be effective.

“The new package of UN proposals on the grain deal implies reconnecting Rosselkhozbank to SWIFT and unfreezing the assets of Russian companies…. This was all ‘implied’ before, only it never worked,” she stated.

While alluding to the letter from Guterres and Lavrov, a Russian diplomat linked to Lavrov told Reuters as well that “there are no revelations” in Guterres’ letter, and it merely “summed up previous UN ideas, which didn’t fly.”

In mid-July this year, Russia suspended its involvement in the Black Sea Grain Initiative, a deal facilitated by the UN and Turkey last year to enable the delivery of Ukrainian grain to international markets amid the Russo-Ukrainian conflict. The deal was also meant to reverse Western sanctions that restricted the amount of Russia’s agricultural exports.

Russia constantly lambasted the fact that the part of the deal associated with enabling Russian exports and lifting the sanctions on relevant companies was unfulfilled, notwithstanding Moscow’s persistent warnings that it would withdraw from the deal unless the concessions were enforced.

On September 2, Turkey’s Anadolu news agency reported that the aforementioned UN plan to reconnect the Russian bank to the SWIFT system was facilitated with Turkish mediation and would “constitute a suitable basis for the revival of the deal,” quoting Turkish Foreign Minister Hakan Fidan.

For weeks, Ankara had been attempting to revive the deal, contending that it could become the foundation for a truce or even a peace deal between Russia and Ukraine.

In July this year, the head of the Coordinating Committee for Economic Cooperation with African Countries (AFROCOM), Igor Morozov, claimed in an interview with media outlet Russia Today (RT) that following U.S. and EU seizures of Russia’s foreign exchange reserves, countries realized that the SWIFT payment system was not merely a “political weapon,” but a means of financial coercion on the external and internal policy of any country and any continent by the West.

Speaking with RT on the fringes of the Russia-Africa summit in St. Petersburg, Morozov declared that the decline of the U.S.-led unipolar world and the emergence of a new multipolar one with Africa’s participation in the BRICS alliance would pave the way for an emergent middle class to propel consumer demand in the near future.

The U.S. has weaponized its dollar, thus countries will slowly shift away from it in trade, Morozov claimed. Also, the BRICS payment system will act as a substitute for the SWIFT financial messaging network in a “new non-Western world.”

“African leaders are also concerned about further use of the dollar and euro. In this regard, the number of countries wishing to join BRICS is growing rapidly, because this is an alternative payment system that is due to emerge within half a year,” he said.

The BRICS grouping of countries, comprised of Brazil, Russia, India, China, and South Africa at the moment, has been lobbying for trade in national currencies and has begun to set up a joint payment network to reduce its dependence on the Western financial system, especially the dollar. Russian trade ties with African countries have been warming up in recent years, with more potential for growth via free-trade zones that are emerging in Africa, Morozov said.

“We are ready and we will supply annually through humanitarian aid everything that we have in the agro-industrial complex. Our tractors, aggregates, mineral fertilizers and technologies. We’ve achieved amazing results in ten years and we want to share this experience with our African partners,” he asserted. He added that Russia would “do everything” to enable Africa to have access to innovative technologies.

Echoing Morozov’s claims, Andrey Kostin, the CEO of Russia’s second-largest bank, VTB, told journalists at the same Russia-Africa summit that as the greenback has been weaponized, countries will gradually avoid using it in trade.

“Structural changes are bound to happen. African countries are also acting on this. They have already started to create their own systems of information exchange and settlements in national currencies. This is a promising trend,” he said.