Brussels: U.S. Secretary of State Marco Rubio has been reassuring European leaders in recent weeks that they will have a seat at the negotiating table when the time comes to discuss sanctions on Russia. However, that moment may arrive sooner than Brussels anticipated.
Following a new round of talks in Saudi Arabia, the U.S. announced that Russia and Ukraine had agreed to implement a partial ceasefire focused on “energy facilities”. The deal falls short of the broader ceasefire that former President Donald Trump had been advocating.
Additionally, both parties committed to ensuring “safe navigation, eliminating the use of force, and preventing the use of commercial vessels for military purposes in the Black Sea,” according to the U.S. readout of the agreement.
While the White House provided a broad outline of the commitments, it omitted detailed technical specifics. However, the Kremlin was quick to articulate its own conditions for reactivating the “Black Sea Initiative.”
Russia’s Demands for Sanctions Relief
Moscow outlined five key demands, chief among them the lifting of “sanctions” and “restrictions” that it claims hinder the export of food products and fertilizers. These demands extend to agricultural machinery and insurance for cargo shipments. The most notable condition involves reconnecting the Russian Agricultural Bank (Rosselkhozbank) and “other financial organizations” involved in agricultural trade to SWIFT, the global financial messaging system.
SWIFT, established in 1973, facilitates secure and rapid transactions for more than 11,000 financial institutions across over 200 countries. Given that SWIFT is headquartered in La Hulpe, Belgium, its operations fall under EU jurisdiction and are subject to EU sanctions.
The Role of SWIFT in Sanctions
Prior to February 24, 2022, SWIFT was largely unknown outside the financial sector. However, following Russia’s full-scale invasion of Ukraine, Kyiv called for Russian banks to be expelled from the system to cripple Moscow’s ability to finance its war efforts. The campaign led to the EU expelling seven Russian banks from SWIFT on March 2, 2022. Later in June, three more banks, including Rosselkhozbank, were disconnected.
Rosselkhozbank, a state-owned entity, plays a vital role in financing Russia’s agricultural exports, which are a key revenue stream for Moscow through global sales of wheat, barley, and corn. Although the EU has not directly sanctioned Russian agricultural exports, restrictions on Rosselkhozbank have disrupted payments between Russian exporters and foreign buyers, exacerbating tensions. This was a major factor in the collapse of the original Black Sea Initiative, which had been brokered by Turkey and the United Nations.
With Trump now engaged in the ceasefire negotiations, Russian President Vladimir Putin has seized the opportunity to push once again for Rosselkhozbank’s reconnection to SWIFT.
The U.S. Response and EU’s Position
While the White House’s readout did not explicitly endorse Russia’s demand, it stated that the U.S. would support restoring Russia’s “access to the world market for agricultural and fertilizer exports, lowering maritime insurance costs, and enhancing access to ports and payment systems for such transactions.” The phrase “payment systems” is widely interpreted as a veiled reference to SWIFT. However, the ultimate decision does not rest with Trump, as SWIFT operates under EU jurisdiction.
When asked for clarification, the U.S. State Department declined to comment. Trump himself acknowledged the Kremlin’s conditions, stating, “We are thinking about all of them right now. There are about five or six conditions. We’re looking at all of them.”
A Tough Choice for the EU
Putin’s demands place the European Union in a difficult position. Rejecting the request could frustrate Trump, who is keen to secure at least a partial ceasefire to advance his diplomatic agenda. On the other hand, granting sanctions relief could be seen as a sign of weakness, potentially emboldening Moscow to push for further concessions.
Moreover, lifting sanctions contradicts Ukrainian President Volodymyr Zelenskyy’s stance. He has repeatedly called for maintaining strict measures against Russia until the war ends. “There must also be clear pressure and strong action from the world on Russia – more pressure, more sanctions from the United States – to stop Russian strikes,” Zelenskyy stated in a recent social media post following renewed Russian drone attacks.
During her visit to Kyiv to mark the third anniversary of the war, European Commission President Ursula von der Leyen reaffirmed that sanctions would only be eased if Moscow took “concrete steps” toward a lasting resolution. “What we see is that the sanctions already have a massive effect on the Russian economy,” she noted, citing “skyrocketing inflation” and “spiraling interest rates.”
Internal Divisions Within the EU
Appetite for sanctions relief remains low among EU diplomats, who point to Russia’s continued military aggression as proof that Putin is not serious about peace. The EU’s sanctions regime, built over 16 successive packages, is one of the most complex in history. Unraveling it would require extensive deliberations and unanimous approval from all 27 member states.
Ahead of an upcoming summit in Paris, the Élysée Palace emphasized that the focus was not on lifting sanctions but rather on strengthening them if Russia failed to accept an unconditional ceasefire. “Of course, the Russians can always opportunistically link partial progress towards a ceasefire to the lifting of certain sanctions,” a French official stated. “But for us, as long as Russia has not stopped the war because a peace settlement has not been reached, guarantees have not been given to Ukraine, and war reparations have not been paid, sanctions will always remain a necessary instrument for us to exert pressure on Russia.”
Nevertheless, the debate is now unavoidable. Under EU rules, sanctions must be renewed every six months by unanimous agreement. This makes the process vulnerable to political maneuvering. Since Trump’s return to diplomacy, Hungary—a longstanding critic of sanctions—has twice threatened to block their renewal and could do so again when the sectoral restrictions come up for review on July 31.
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“The last EU sanctions on individuals were maintained because Marco Rubio pressured Hungary to keep the measures in place. If there is no such pressure, the EU sanctions regime is in great danger,” said Maria Shagina, a senior fellow at the International Institute for Strategic Studies (IISS).
Although EU approval would be necessary for Rosselkhozbank to regain full SWIFT access, Washington might seek alternative measures. According to analysts, the U.S. could signal that transactions with the bank would not face legal consequences, thereby encouraging private institutions to resume dealings with Russia.
Jan Dunin-Wasowicz, a sanctions compliance expert, suggests that Russia’s SWIFT demand is a strategic move aimed at testing both Washington and Brussels. “The request to the Trump administration could be an attempt to leverage the U.S. to pressure the EU into easing EU measures. It may ultimately be testing the EU’s resolve to stay the course and continue its sanctions policy,” he said.
Conclusion
Russia’s push for sanctions relief has put the European Union in a precarious position, forcing it to navigate a complex web of diplomatic, economic, and political challenges. As talks progress, Brussels faces a critical decision: remain firm in its stance against Moscow or risk alienating a key ally in Washington. Either path carries significant consequences, ensuring that the debate over sanctions relief will remain at the forefront of EU policymaking in the months to come.
