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The Curious UN-Russian Side Deal to Get Russian Food and Fertilizers to World Markets

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UN Secretary-General António Guterres speaking at the signing ceremony of the Black Sea Initiative in Istanbul, July 22, 2022, to get Ukrainian grain out of its seaports into global markets. A separate agreement between the UN and Russia signed that day is supposed to propel Russia’s own foodstuffs and fertilizers back onto the market, too, but it could be used by Russia as propaganda. 

A new agreement between Russia and the United Nations to specifically propel Russia’s food products and fertilizers back into commercial markets was signed in Istanbul last week. It comes with big ambitions for a country waging war and an international body dedicated to peacemaking: helping to achieve the “zero-hunger” Sustainable Development Goal, ensuring “unimpeded access” of foods, fertilizers and its raw materials to vulnerable countries and alleviating the disruptions in global supply flows.

A curious goal is packed near the bottom of agreement: advising Russian companies on how to do business with the UN as a vendor, even though Russia has been a main player in lucrative UN procurement activities for decades.

This memorandum of understanding, signed on July 22, is a side deal to the Black Sea Initiative, led by the UN and Türkiye. The side deal will be carried out by the UN Conference on Trade and Development (Unctad), directed by Rebeca Grynspan, in liaison with the Russian mission to the UN. PassBlue has seen a copy of the MoU, which is a three-year plan and was signed by Secretary-General António Guterres and Andrey Belousov, Russia’s top deputy prime minister.

The Black Sea Initiative, a separate agreement also signed on July 22, by Russia, Türkiye, Ukraine and Guterres (as a “witness”), is supposed to enable Ukraine’s 22 million tons of grains stuck in its Black Sea ports since Russia’s Feb. 24 invasion to be commercially shipped through “safe channels” provided by Ukraine in its waters and onto global seas and markets. The overarching aim is to reduce the severity of the food crisis wracking much of the world, brought on by various factors, including the pandemic and, more recently, Russia’s war on Ukraine.

The initiative begins immediately and is renewable in 120 days. It was signed at the Dolmabahce Palace in Istanbul, where Guterres and President Recep Tayyip Erdogan presided over the ceremony. Grynspan and Martin Griffiths, the UN humanitarian relief chief, were also present. Griffiths will establish a Joint Coordination Center in Istanbul to implement the initiative, the UN said, with Russian, Turkish and Ukrainian participation. The UN’s International Maritime Organization, which regulates shipping, is said to play a central role as well.

But the Black Sea deal has already been bruised — if not breached — by Russia, which attacked the major Ukrainian port of Odesa less than a day after the agreement was signed in Istanbul. (The separate Russia-UN deal reiterates Russia’s role in guaranteeing the grain deal succeeds, saying Russia “will facilitate the unimpeded export of food, sunflower oil and fertilizers from Ukrainian controlled Black Sea ports.”)

A source familiar with the narrower Russia-UN deal noted to PassBlue that the “Ukrainian controlled Black Sea ports” wording is different from the Black Sea plan, which names the ports: Odesa, Chernomorsk and Yuzhny. In addition, the Black Sea pact was signed by Oleksandr Kubrakov, Ukraine’s infrastructure minister, at the Istanbul ceremony, and not by a military official to avoid interaction with Defense Minister Sergei Shoigu, who signed for Russia.

The UN reacted quickly to the July 23 attack, saying Guterres “unequivocally condemns reported strikes today in the Ukrainian port of Odesa.” The United States, which is not a party to the initiative but supports it in theory, also reacted to Russia’s assault on Odesa, with Secretary of State Antony Blinken saying: “This attack casts serious doubt on the credibility of Russia’s commitment to yesterday’s deal and undermines the work of the UN, Turkey, and Ukraine to get critical food to world markets.”

As for the special arrangement between the UN and Russia to get its fertilizers and food products into world trading, it remains to be seen whether it will work as well. The MoU never says where and how the Russian goods will be exported and puts the onus on the UN to overcome a range of obstacles.

Russia is the globe’s largest exporter of fertilizer, including ammonia. The emphasis on getting these goods to developing countries in Africa and elsewhere could be spun cynically by Russia, as Western countries repeatedly call out Russia for weaponizing food in its war on Ukraine, leaving essentials like bread in short supply in far-away rural communities, for example, in the Sahel region of West Africa or the more ravaged Horn of Africa. (In fact, Sergey Lavrov, Russia’s foreign minister, began a trip on July 24 to Egypt, Ethiopia, Republic of Congo and Uganda to counter Western accusations of Russia weaponizing food in Africa, the Russian foreign ministry said.)

For Russia, the deal could be a huge gain because it aims to remove all barriers, imagined or otherwise, that companies in finance, logistics and insurance circles may face when doing business with Russia, as they fear they will be fined and incur other black marks. These industries have also been hit the hardest in Russia from Western sanctions.

“The signing of the Russia-UN memorandum reiterated the absolutely artificial nature of the West’s attempts to shift the blame for the problems in supplying grain to international markets on Russia,” the Russian foreign ministry said about the deal.

It also implies that the UN will act on Russia’s behalf, saying, “The Russian Federation will inform the Secretariat of the impediments to access of food and fertilizers, including the raw materials required to produce fertilizers (including ammonia), originating from the Russian Federation to the world markets.” And the UN secretariat “will endeavor to engage relevant authorities and the private sector to effectively exempt food and fertilizers” originating in Russia from measures imposed on the country, “based on the principle that those measures do not apply to food and fertilizers.”

Yet the word “access” is not defined in the document, possibly on purpose. Additionally, Western sanctions deliberately exempt Russian food and fertilizers. The US has also said it will provide “comfort letters” to companies that want to do business with Russia legally in these products. The emphasis in the UN plan on overcoming commercial barriers may be an attempt by Russia, the source told PassBlue, to have the ban on Russia’s participation in the all-important Swift financial system dropped.

The section in the agreement on the UN advising Russian companies on “how to do business with the UN and the procedure and requirements for becoming a registered vendor” is another confounding aspect of the plan. It seems intentionally written to include any Russian vendor — rather than only food- and fertilizer-related — into the UN procurement system, thus trying to pre-empt further requests by Ukraine and its allies to stop buying Russian goods and services. In 2021, these totaled more than $282 million.

At a press conference in Cairo with Egyptian Foreign Minister Samey Shoukri on July 24, Lavrov said of the UN: “On issues related to the export of Russian grain, UN Secretary-General A. Guterres took upon himself the obligation to achieve the removal of unlawful restrictions on logistics and financial chains that were introduced by the United States and the European Union. Let’s see how he fulfills his obligation. Now it depends more on the Secretary General.”

As the source told PassBlue: “There is nothing illegal about the sanctions being applied by the West on Russia,” adding that this “overkill” to ask the UN for help in this new deal can be wielded by Russia as propaganda, just as Lavrov visits Africa. “It could suggest that the UN is on Russia’s side.”

We encourage our readers to comment on our stories — with civility, of course. What do you think of the UN’s grain deal agreements?

 


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The Curious UN-Russian Side Deal to Get Russian Food and Fertilizers to World Markets
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Gary Grant
Gary Grant
3 months ago

Is it not curious that the Russia-UN Memorandum of Understanding is for three years; but that the Black Sea Grain Initiative is for 120 days with Russia apparently able to prevent its renewal for another 120 days?

Salim Lone
Salim Lone
4 months ago

There seems to be real panic at PassBlue over this extraordinary UN breakthrough to get desperately needed Ukrainian and Russian food and fertilizer to Africa and other regions. In essence, it appears PassBlue fears Russia will spin the deal to make itself look good.

The author worries that this life-saving agreement will undercut western countries’ condemnations of Russia for weaponizing food in its war on Ukraine – seemingly unaware that the West is sending massive amounts of REAL weapons to Ukraine. This project is part of the US’s publicly declared goal of crushing Russia and its economy, which could easily spiral into a much more destructive global conflict.

Hard as it is to believe, there is not a single sentence hailing this singular UN achievement in negotiating an agreement in the middle of a bitter war to alleviate mass hunger in the poorer countries and provide Ukraine with billions of dollars in income. . .

To avoid misunderstanding, let me state that I consider this Russian aggression a forbidden international crime. That the West has also undertaken similarly unlawful aggressive wars against Iraq, Vietnam etc in no way minimizes Russia’s criminality against Ukraine.

Like many UN staffers I was excited by PassBlue’s creation, expecting it would offer more balanced media coverage of global issues than is available in the mainstream media that we all rely on. Alas, that turned out to be a misplaced hope, but it is not too late to go back to the drawing board.

Carl Freeman
Carl Freeman
4 months ago

What a curious article. Instead of lauding a remarkable breakthrough, an outstanding success for the United Nations and for diplomacy in the midst of hostilities, the writer seems obsessed by a need to discover possible Russian ulterior motives.

The millions that suffer inadequate food supplies and rocketing prices have no such preoccupations. They will simply welcome the agreement and hope that their situation improves.

Salim Lone
Salim Lone
4 months ago
Reply to  Carl Freeman

Perfectly put Carl!

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