EU moves to unblock Russian bank funds to boost food trade

EU moves to unblock Russian bank funds to boost food trade

The EU is preparing to carve out exceptions in its tough sanctions against Moscow that would unblock assets at Russian banks linked to trade in food and fertiliser, a document showed on Tuesday.

Member countries “want to make it abundantly clear that there is nothing in the sanctions that is slowing the transport of grain out of Russia or Ukraine,” an EU diplomat told AFP on condition of anonymity.

The EU’s proposal is part of the bloc’s latest sanction update that is being negotiated by member states. It will require unanimous approval to enter into force.

The derogation would be available to banks already blacklisted by EU sanctions when, according to the draft plan, “such funds or economic resources are necessary for the purchase, import or transport of agricultural and food products, including wheat and fertilisers”.

It comes as Brussels battles Moscow’s allegations that Western sanctions — and not its invasion of Ukraine — are causing a global food crisis.

One EU diplomat said allowing the food exception was “completely understandable”.

Shipments across the Black Sea have been blocked both by Russian warships and mines Kyiv has laid to avert a feared amphibious assault.

The food shortages have raised the risk of famine for tens of millions of people in poorer nations, particularly in Africa, where leaders have complained to the EU about the banking sanctions.

The United States said last week that it would not bar the sale of farm equipment to Russia nor prohibit the trade of agricultural commodities such as fertiliser.

Since February, when Russia invaded Ukraine, the EU has deployed an escalating series of six sanction packages against Moscow, with the latest intended to close loopholes.

The EU is also targeting Russian gold exports to fulfil a decision agreed by the world’s most industrialised nations at a G7 meeting in late June.

EU envoys are expected to decide on the measures at a meeting on Wednesday morning, with an announcement later in the day or on Thursday.

Hungarian premier Viktor Orban — the closest EU leader to the Kremlin — last week slammed the EU’s sanctions policy, arguing that Europe had “shot itself in the lungs” by hurting Europeans more than Russia.

Agence France-Presse (AFP) is a French state-owned international news agency based in Paris. It is the world's oldest news agency, having been founded in 1835 as Havas.

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