JPMorgan allowed to process payment for Russian grain

MOSCOW — The United States gave JPMorgan permission to process payments for agricultural exports via the Russian Agricultural Bank, but the arrangement was no substitute for reconnecting the bank to the SWIFT system, two Russian sources told Reuters.

Access to the SWIFT payment system for the Russian Agricultural Bank is one of Moscow's main demands in negotiations over the future of the Black Sea grain export deal, which the United Nations said helps to tackle a global food crisis that has been aggravated by the Russia-Ukraine conflict.

The Kremlin has repeatedly warned the deal will not be renewed beyond May 18 unless the West removes obstacles to Russian grain and fertilizer exports.

Russia's envoy to the United Nations said in Geneva on Wednesday that "no real progress" had been achieved in resolving issues raised by Moscow over the Black Sea grain deal.

"As of today, we regret to say that no real progress was reached in resolving this problem," envoy Gennady Gatilov said at the Russian permanent mission in Geneva.

Russia's grain and fertilizer exports are not subject to Western sanctions imposed following the conflict, but Moscow said Western restrictions on payments, logistics and insurance are a barrier to shipments.

European Union and US sanctions on Russia have also had a general chilling effect that has left the private sector wary of any dealings with Russia even if it is permitted.

A Russian source, who spoke on condition of anonymity, said the US Office of Foreign Assets Control had allowed JPMorgan to process the transaction.

"But the process is difficult," the first Russian source said.

A second Russian source said JPMorgan and Russian Agricultural Bank were both specifically given exemptions to execute a single transaction. It involved grain and was denominated in US dollars, according to the second Russian source.

Reuters could not ascertain who the exporter was or the destination of the supply.

The JPMorgan route was proposed as an alternative to reconnecting Russian Agricultural Bank to SWIFT, but could be terminated at any time, the first Russian source said. "This cannot replace SWIFT," the source said.

In another move, Ukraine retrieved 44 prisoners from Russian custody, a senior Ukrainian presidential adviser said on Wednesday.

Andriy Yermak wrote on Telegram that 42 were soldiers and two were civilians. The two sides have held regular prisoner exchanges during the conflict, now in its 15th month.

Also on Wednesday, Russia declared 10 diplomats working at the Norwegian embassy and military attache's office in Moscow persona non grata, the Russian Foreign Ministry said.

Norwegian Ambassador to Russia Robert Kvile was summoned to the ministry in protest over Oslo's decision to expel 15 Russian diplomats from the Russian embassy in Norway and military attache's office, the ministry said.

Agencies-Xinhua