As Ukraine’s grain agreement emerges, the United States aims to ease concerns over Russia’s sanctions

Farmers harvest wheat, in the middle of Russia’s attack on Ukraine, in the Donbas region, Ukraine July 13, 2022. REUTERS / Gleb Garanich

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WASHINGTON, July 14 (Reuters) – The United States on Thursday sought to facilitate Russian food and fertilizer exports by assuring banks, shipping and insurance companies that such transactions would not violate Washington’s sanctions against Moscow over its invasion of Ukraine.

Activation of these Russian exports is an important part of the efforts of UN and Turkish officials to mediate a package deal with Moscow that will also allow shipments of Ukraine’s grain from the Black Sea port of Odesa, which has been blocked by the war.

The written US clarification came the day after Russia, Ukraine, Turkey and UN officials met in Istanbul for talks aimed at resuming Ukraine’s grain exports. Turkey announced that the parties would return next week to sign an agreement. Read more

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“The United States strongly supports the United Nations’ efforts to bring both Ukrainian and Russian grain to world markets and to reduce the impact of Russia’s unprovoked war on Ukraine on global food supplies and prices,” the US Treasury Department said in a statement.

The war in Ukraine has caused prices to skyrocket for grain, cooking oil, fuel and fertilizer, prompting a global food crisis.

Eduard Zernin, head of the Russian Union of Grain Exporters, described the US move as “an act of good will” and a “real step in the fight against world hunger.”

“We sincerely hope that other countries involved will follow this example and issue the necessary clarifications and licenses to remove covert sanctions that hinder the supply of grain to countries in need,” he told Reuters.

RUSSIA, UKRAINE KEY SUPPLIERS

Russia’s invasion and blockade of Ukraine’s ports on February 24 has halted exports, leaving dozens of ships stranded and some 20 million tonnes of grain trapped in silos off Odesa.

Moscow has denied responsibility for exacerbating the food crisis and instead blames a relaxing effect of Western sanctions on curbing its own exports of food and fertilizer and Ukraine for mining in its Black Sea ports.

Ukraine and Russia are major global wheat suppliers, and Russia is also a major fertilizer exporter, while Ukraine is a major producer of corn and sunflower oil.

The U.S. Treasury Department made it clear that the sale and transportation of agricultural goods, as well as medicines and medical equipment, were permitted and would not be in violation of a series of sanctions imposed by Washington on Russia.

Washington also stressed that there were no sanctions against Russia’s production, manufacture, sale or transportation of agricultural products, including fertilizers, and that it was not prohibited to offer insurance or reinsurance for the transportation or shipping of these products.

Imports of Russian seafood to the United States are prohibited under Washington’s sanctions.

When UN-led talks began in May to revive Ukraine and Russian food exports, US UN Ambassador Linda Thomas-Greenfield had said Washington was ready to provide written assurances – known as “consolation letters” – to shipping. and insurance companies in relation to Russian exports.

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Reporting by Daphne Psaledakis and Michelle Nichols; Editing Aurora Ellis and Jonathan Oatis

Our standards: Thomson Reuters Trust Principles.

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