Putin Tells Erdogan Russia Will Rejoin Grain Deal If Sanctions Eased, SWIFT Reconnected

Erdogan returns from Sochi with no progress toward restoring deal...

By Tyler Durden: Monday's meeting between Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan appeared to produce little of significant substance, but Putin took the opportunity to make his demands known as Turkey is attempting to restore the original UN-backed Black Sea Grain Initiative deal.

Putin laid out that his country would would be fine with returning to the deal if sanctions against Russia’s agricultural industry are lifted. "I would like to confirm again our position of principle: we will be ready to consider the opportunity of reviving the grain deal. I told [Erdogan] today again, and will do this immediately after all arrangements set in it on lifting of restrictions on Russian agricultural exports are fulfilled," Putin said following dialogue with the Turkish leader in Sochi.

He stressed Russia's return is contingent on the West signing a memorandum to facilitate Russian food and fertilizer exports. "We will do this as soon as all the agreements on lifting restrictions on the export of Russian agricultural products are fully implemented."

Crucial to this, and key to the demand, is to have the Russian Agricultural Bank (Rosselkhozbank) reconnected to the SWIFT payment system. This was mentioned days ago when it was revealed there's a new UN proposed package on the table, still under negotiation.

Sources in Turkey's Anadolu said among the most important elements of the package include "the connection of the European subsidiary of the Russian Agricultural Bank (Rosselkhozbank) to the SWIFT system and the unblocking of frozen assets of Russian companies producing fertilizers in Europe." This would also involve the necessary of lifting of restrictions on ship insurance and access to currently banned ports.

Russian Foreign Ministry spokesperson Maria Zakharova issued a weekend statement saying, "The new package of UN proposals regarding the 'grain initiative' provides for the reconnection of Rosselkhozbank to SWIFT and the unfreezing of assets of Russian companies... Earlier, all this was also 'conditional', but it never came into effect."

But all of the above, particularly easing SWIFT restrictions, would require definitive action on the part of the United States and its allies, which is unlikely in the wake of Russia's now weekly bombings of Ukrainian ports and oil and grain storage facilities, particularly on the Danube near NATO-member Romania. Additionally, America is helping Kiev to set up alternate shipping of exports, chiefly through the maritime territory of nearby Romania and Bulgaria.

Still, Erdogan sounded optimistic coming out of the talks with Putin in Sochi, telling the media he expects a resolution soon. "As Turkey, we believe that we will reach a solution that will meet the expectations in a short time."

The two sides did appear to reach a limited short-term deal for Russia to send one million tons of grain to Turkey for processing and export to poorer nations. Putin said he would given this grain to needy populations for free.

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