As Ukraine grain deal emerges, US aims to ease concerns over Russia sanctions

During Russia's attack against Ukraine, farmers harvest wheat in the Donbas, Ukraine, 13 July, 2022.

Thursday's (14 July) US attempt to facilitate Russian food exports was aided by assurances given Thursday to shipping companies, banks and insurance companies that these transactions would not violate Washington's sanctions against Moscow following its invasion of Ukraine.

The United Nations and Turkish officials have tried to broker a deal with Moscow in order to allow these Russian exports. This would also allow for the shipment of grain from Ukraine's Black Sea port of Odesa. These ports were blocked by the war.

This US written clarification was issued just days after officials from Turkey, Russia, Ukraine and the UN met in Istanbul to discuss resuming Ukraine’s grain exports. Turkey said that the parties would meet again next week to conclude a deal.

The factsheet stated that the US Treasury Department strongly supported efforts by the United Nations "to bring both Ukrainian grain and Russian grain onto world markets and reduce the impact of Russia’s unprovoked invasion on Ukraine on global food supply and prices."

The conflict in Ukraine has caused prices to soar for grains, cooking oil, fuel, fertilizer and other commodities, creating a global food shortage.

Eduard Zernin (head of the Russian Union of Grain Exporters) described the U.S. action as "an act of kindness" and "a real step in the fight against hunger around the world."

He told Reuters that he hoped that other countries would follow his lead and issue clarifications and licenses to remove any hidden sanctions that prevent the supply of grain to those in need.

Russia's 24 February invasion of Ukraine and blockade at its ports has stalled exports. Hundreds of ships were left stranded, and around 20 million tonnes of grain remained in Odesa silos.

Moscow denies responsibility for the worsening of the food crisis. Instead, it blames Western sanctions for slowing down its food and fertilizer exports as well as Ukraine's mining activities at its Black Sea ports.

Russia and Ukraine are the two largest global suppliers of wheat. Russia is also a major fertilizer exporter. Ukraine, however, is a significant producer and processor of sunflower oil and corn.

The U.S. Treasury clarified that the sale and transportation of agricultural commodities as well as medicines and medical devices was permitted and would not violate a series of sanctions Washington has placed on Russia.

Washington stressed that Russia does not have any sanctions against its production, manufacture, sale or transport of agricultural commodities including fertilizer. Also, that insurance or reinsurance was allowed for the shipping or transportation of these products is not prohibited.

Washington's sanctions prohibit imports of Russian seafood and fish to the United States.

US officials were able to provide assurances that the U.N.-led negotiations to revive Ukraine's food exports began in May. Linda Thomas-Greenfield, Ambassador to the United Nations had stated that Washington was ready to provide written assurances (known as "comfort mails") to shipping companies and insurance companies regarding Russian exports.