EU rejects Trump and Putin: Sanctions on Russia and SWIFT disconnections remain in place

According to the ceasefire agreement in the Black Sea signed by the Trump administration, Russia and Ukraine agreed to a truce. However, Moscow said that its participation would depend on many preconditions, including the lifting of sanctions.

While the Trump administration may be willing to lift sanctions against Russia to cement the deal, its implementation depends on EU approval. But it is unlikely to happen quickly.

"The end of the Russian unprovoked and unjustified aggression in Ukraine and unconditional withdrawal of all Russian military forces from the entire territory of Ukraine would be one of the main preconditions to amend or lift sanctions," said a European Commission spokesperson.

Russia's double game

According to the Kremlin, the agreement was supposed to provide for the lifting of some Western sanctions, in particular against banks and other services involved in the export of agricultural products, including fertilizers.

The Kremlin has said that compliance with the Black Sea ceasefire agreement will depend on the reconnection of Rosselkhozbank, which lends agricultural products, and several other banks to the SWIFT system.

Rosselkhozbank plays a key role in financing food production and exports, but it has been blacklisted for operations supporting Moscow's military machine.

However, Russia's request is partly misleading. When the EU imposed economic sanctions on Russia after February 2022, food was explicitly excluded.

In other words, Russia has access to the global grain and fertilizer market and has been trading in these goods ever since.

Quick lifting of sanctions is unlikely

The Russian Black Sea grain auction is seen as an attempt by Moscow to test whether it can begin to undermine the EU sanctions regime.

Kyiv and its European allies fear that any concessions-even if they seem minor-could lead to the collapse of the West's sanctions framework against Russia since the beginning of Russia's full-scale invasion of Ukraine. Moscow may also try to divide the US and Europe over the question of the right sanctions policy.

Since SWIFT is based in Belgium, it has to comply with EU rules and sanctions legislation. Therefore, "at some point, we [Europeans] will have to be looped in," one EU diplomat told Euractiv.

"SWIFT cannot connect Russian banks to the network unless the EU changes its sanctions' legislation," said Janis Kluge, a senior research fellow at the German Institute for International and Security Affairs.

The EU's economic measures against Russia, which must be renewed every six months by unanimous decision of all 27 member states, are due to be extended until July 31.

According to EU diplomats, it is still impossible to lift sanctions against Russia before a complete ceasefire and withdrawal of troops from Ukraine.

"Before the sanctions roll-over [in July], nothing changes, and we’ll work on nothing to be changed because Russia itself hasn’t changed nor have its goals," a European diplomat told Euractiv.

Disconnection from SWIFT

The exclusion of Russian banks from the SWIFT international payment system was one of the first measures taken by EU member states shortly after Russia's full-scale invasion of Ukraine.

So far, 8 Russian banks have been affected, with the exception of Gazprombank, which was excluded from the list to allow EU countries to pay for Russian gas and oil supplies. The latter is restricted by US sanctions.