EU To Relax Sanctions On Russian Banks To Allow Food Trade

The European Union (EU) will soften its restrictions on Moscow on July 20 by consenting to the unfreezing of some funds of major Russian banks that may be needed to reduce bottlenecks in the global trade of food and fertilizers, a draft document showed.

Notably, the move occurs amid criticism from African leaders about the adverse effects of the sanctions on the trade, which may have aggravated shortages mainly led by Russia’s war in Ukraine and its barricading of ports in the Black Sea.

Under the revised regulation, which is likely to be effected by EU envoys earlier this week, EU nations will be able to unfreeze formerly obstructed economic resources owned by major Russian lenders Sovcombank, Otkritie FC Bank, VTB (VTBR.MM), Novikombank, Bank Rossiya, and Promsvyazbank, the document said.

Separately, under fresh sanctions to be effected on Wednesday, Sberbank (SBER.MM), Russia’s biggest bank, will also become prone to the freezing of its assets, with the exception of resources required for food trade, an EU official told reporters.

The EU Looking For Ways To Support Food Trade

The draft document said funds could be disbursed “after having determined that such funds or economic resources are necessary for the purchase, import or transport of agricultural and food products, including wheat and fertilizers”.

Under the amended sanctions, the EU also intends to speed up exports of food from Russian ports, which traders had ceased servicing after EU sanctions despite the measures clearly excluding food exports, an official said.

The EU has so far denied its restrictions had an impact on food trade.

Besides, the EU, together with Britain, the United States, and others, placed sweeping restrictions on Russia after it invaded Ukraine on Feb. 24. Russia regarded its actions as a “special military operation” to demobilize and “denazify” Ukraine. The West and Kyiv say Moscow is engaging in an unwarranted war of aggression.