Moscow/New York/Beijing: Russia decided to stop implementing Black Sea Grain Initiative once the deal expired today. Moscow also terminated its commitment to “facilitate the unimpeded 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.
The Initiative — together with the Memorandum of Understanding on facilitating exports of Russian food products and fertilizers — was seen as a lifeline for global food security amidst a prolonged war between Russia and Ukraine.
Since it was signed by Russia and Ukraine on July 22, 2022, because of the efforts of the United Nations Secretary-General Antònio Guterres and the mediation of Türkiye, it ensured the safe passage of over 32 million metric tons of food commodities from Ukrainian ports. The World Food Programme (WFP) shipped more than 725,000 tons “to support humanitarian operations” — relieving hunger in some of the hardest-hit corners of the world, including Afghanistan, Horn of Africa and Yemen.
The Initiative also helped reduce food prices by over 23 per cent since March last year. However, Russian President Vladimir Putin claimed that just above 3 per cent of the grains were reaching the poorest nations and Europe was consuming the rest. He also was unhappy that the conditions under which Russia agreed to the deal, according to which Russian interests had to be taken into account as well, were not honoured by the West.
Responding to Russia’s decision, the United Nations Secretary-General António Guterres today said it will strike a blow to the hungry and will hurt the people in need everywhere.
China today said it had hoped that the deal will continue to be implemented “in a balanced, full and effective manner”.
Also read: Will Russia extend the Black Sea grain deal?
In a statement, the UN Secretary-General “deeply” regretted the Russian decision to terminate the implementation of the Black Sea Initiative — including the withdrawal of Russian security guarantees for navigation in the North-Western part of the Black Sea.
“Ultimately, participation in these agreements is a choice. But, struggling people everywhere and developing countries don’t have a choice. Hundreds of millions of people face hunger and consumers are confronting a global cost-of-living crisis. They will pay the price. Indeed, we are already seeing a jump in wheat prices this morning,” Guterres said.
The UN Secretary-General disclosed that he had sent a letter to Putin with a new proposal to keep the Black Sea Initiative alive since he was aware of some obstacles that remained in the foreign trade of Russian food and fertilizer products.
In that letter, Guterres underlined that: “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.”
The letter went on to detail action by the United Nations in delivering breakthroughs “even in some of the most challenging areas of trade facilitation”. Guterres highlighted that the United Nations helped to secure the issuance of: United States General License 6B and 6C, which are especially important in light of the extraterritorial nature of United States sanctions as these licenses apply not only to United States imports from the Russian Federation, but also to all countries concerned with their sanctions regime; two United Kingdom 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.
“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,” Guterres wrote in the letter which went on to detail how: “We have built a bespoke payments mechanism for the Russian Agricultural Bank through JP Morgan outside of SWIFT.”
The letter also described 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.”
Guterres also mentioned in the letter that: “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.”
“I am deeply disappointed that my proposals went unheeded. Today’s decision by the Russian Federation will strike a blow to people in need everywhere,” Guterres said but vowed to continue his efforts to facilitate unimpeded access to global markets for food products and fertilizers from both Ukraine and the Russian Federation. “I particularly want to recognize the efforts of the Government of Türkiye in this regard,” he said. He added: “Looking ahead, our goal must continue to be advancing global food security and global food price stability. This will remain the focus of my efforts, taking into account the rise in human suffering that will inevitably result from today’s decision. We will stay fixed on finding pathways for solutions. There is simply too much at stake in a hungry and hurting world.”
– global bihari bureau
