BRUSSELS – The Trump administration will need Europe's agreement to lift any sanctions against Russia to make a recent ceasefire in the Black Sea work, but that could prove difficult.
Under a Black Sea ceasefire agreement brokered by US President Donald Trump's administration this week, Russia and Ukraine have agreed to a truce, although Moscow has said its participation will be subject to a number of preconditions, including the lifting of sanctions.
The deal was to include the lifting of some Western sanctions, particularly on banks and other services involved in agricultural exports, including fertilizer supplies, the Kremlin said.
The Trump administration appears to agree, according to the Wall Street Journal, but Kyiv has said it has not agreed to any easing of measures against Moscow.
Russia's Double Game
The exclusion of Russian banks from the international payment system SWIFT was one of the first measures taken by EU member states shortly after Russia's invasion of Ukraine.
Currently, eight Russian banks are affected, with the exception of Gazprombank, which was removed from the list to allow EU countries to pay for Russian gas and oil supplies. In effect, the latter is restricted by US sanctions.
The Kremlin said compliance with the Black Sea ceasefire would depend on the reconnection of Rosselkhozbank, which provides agricultural loans, and several other banks to the SWIFT system.
Rosselkhozbank plays a key role in financing food production and exports, but has been blacklisted for operations supporting Moscow's war machine.
However, Russia's request is partly misleading. When the EU imposed economic sanctions on Russia after February 2022, food products were explicitly excluded.
In other words, Russia has access to the world market for grain and fertilizers and has been trading in these goods ever since.
According to Alexander Kolyandr, a researcher at the Centre for European Policy Analysis (CEPA), a key reason for Moscow's message was “to score points with countries in the Global South by saying that Russia wants stable or low food prices because Russian agriculture is not under sanctions.”
Rapid movement is unlikely
While the Trump administration may want to lift sanctions on Russia to secure the deal, its implementation depends on EU approval, which is unlikely to happen quickly.
“An end to Russia's unprovoked and unjustified aggression in Ukraine and the unconditional withdrawal of all Russian military forces from all of Ukraine would be among the main prerequisites for changing or lifting sanctions,” the European Commission spokesman said.
Russia's Black Sea grain trades are seen as Moscow testing whether it can begin to undermine the EU sanctions regime.
Kyiv and its European allies fear that any concessions – even if they seem minor – could lead to the erosion of the Western sanctions framework against Russia since the start of the war in Ukraine. Moscow could also try to divide the US and Europe over the right sanctions policy.
Because SWIFT is based in Belgium, it must comply with EU rules and sanctions legislation, so “at some point we [the Europeans] will have to step in,” one EU diplomat told Euractiv.
“SWIFT will not be able to connect Russian banks to the network unless the EU changes its sanctions legislation,” said Janis Kluge, a senior fellow at the German Institute for International and Security Affairs.
SWIFT did not respond to Euractiv's request for comment.
The EU's economic measures against Russia, which must be renewed every six months by unanimous vote of all 27 member states, are set to be extended until July 31.
EU diplomats say lifting sanctions against Russia before a full ceasefire and withdrawal of troops from Ukraine remains impossible.
“ They are still analysing what this means or could mean. But for now it is a statement that we have nothing to do with,” a second EU diplomat told Euractiv.
“Until the sanctions are extended [in July], nothing will change, and we will work to ensure that nothing changes, because Russia itself has not changed and does not have its own goals,” the diplomat said.
Hungary, US pressure
Most EU member states are concerned that Hungary, which was one of the first EU countries to respond to the Black Sea deal, has called for the lifting of sanctions against Russia and has repeatedly used the agreement to extend it as a political bargaining chip.
“Theoretically, an EU country could threaten not to extend sanctions if the ban on the use of SWIFT for Russian banks is not removed from the sanctions legislation,” Kluge said.
Trump's return to the White House in January also prompted Budapest to increasingly violate the periodic extensions. Trump may try to use the confusion to his advantage.
The European Commission did not comment on whether it had been contacted by US officials about the matter.
There is also a workaround option in the US, at least in theory.
Analysts say Washington may reopen correspondent accounts in the United States for Russian banks under American jurisdiction.
“It means I can trade in dollars, do trades in dollars, do whatever I want with U.S. dollars,” Kolyandr said. “[It’s] possible without SWIFT. It would be extremely cumbersome, tedious, and slow, but it’s possible.”
But Washington cannot force SWIFT to reconnect the Russians, both analysts said.
“Trump could also potentially try to put pressure on SWIFT, which would make life very difficult for them, but that cannot be in conflict with EU rules,” Kluge said.
Asked what reaction Washington should expect if it tried to pressure the EU to quickly reverse Russia's measures, a third diplomat quipped: “I can't see that happening – at least not by common sense.”
[EPD]
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