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EU set to amend sanctions on Russia to boost food trade

Tuesday, 19 July 2022 4:10 PM [ Last Update: Tuesday, 19 July 2022 4:20 PM ]

European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium, on June 17, 2022. (Photo by Reuters)

The European Union (EU) will amend some of its tough sanctions on Russia by allowing the unfreezing of some of the country's funds to boost food trade, amid an unfolding global food crisis, according to a draft document.

Only hours after it proposed additional sanctions on Russia's top lender, Sberbank, the EU revealed a new regulation under which it will unblock assets at Russian banks linked to trade in food and fertilizer.

EU nations will be able to unfreeze previously blocked economic resources owned by top Russian lenders VTB, Sovcombank, Novikombank, Otkritie FC Bank, VEB, Promsvyazbank and Bank Rossiya, said the document.

The draft document said money could be released "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."

The new regulation will be adopted on Wednesday.

At the same time, the bloc will adopt new sanctions against Russia's Sberbank. The bank will become subject to the freezing of its assets, with the exception of resources needed for food trade, an EU official told Reuters.

The European Union and the United States have imposed harsh sanctions against Russia, in response to Moscow's military campaign in Ukraine this year. Russia launched the military offensive in Ukraine on February 24. The sanctions sent the prices of grain, cooking oil, fertilizers, and energy skyrocketing.

Experts warn that rising food prices and shortages in the fragile emerging markets in Africa and West Asia could lead to a humanitarian disaster.

Russia has said formerly that difficulties in the global food market, which had been building up for a long time, were further exacerbated due to "illegitimate sanctions against Russia."

Earlier this year, President Vladimir Putin warned that the West's sanctions were fomenting a global crisis that would whiplash against the European Union and trigger famine for some of the world's poorest countries.