• Officials draw up waiver allowing transit of Russian fertilizer to developing countries
The European Union imposed a new sanctions package on Russia on Friday that officials hope will significantly ease food-security problems facing developing and poor countries.
The sanctions agreement, which EU leaders advanced to a summit on Thursday, came amid intense lobbying by UN Secretary-General Antonio Guterres. He called on several European leaders in recent days to ease the transit of Russian fertilizers through EU ports.
At the heart of the issue is a battle of narratives over who is to blame for the rise in food and fertilizer prices in recent months. Western countries have blamed Russia's invasion of Ukraine for the rise in prices. The Kremlin blames Western sanctions.
Immediately after the Russian invasion, wheat prices rose by 46% and corn by 11%. Prices stabilized after the signing of a grain-export agreement brokered by the United Nations and Turkey in July. The United Nations World Food Program said earlier this year that 50 million people are close to famine.
The EU has consistently pointed to language in its sanctions law saying that food, fertilizer and other key humanitarian goods are exempt from sanctions. The reality has become more complex.
In recent months, ships carrying fertilizers have been stopped or not allowed for weeks to transit through major European ports, such as Rotterdam in the Netherlands, because of concerns over sanctions.
Among the targets of EU sanctions on Russia's elite are current or former owners of some of Russia's biggest companies that produce and distribute fertiliser. These include Andrey Melnichenko, founder of EuroChem Group; Andrey Gurev, former head of PhosAgro, and Vyacheslav Moshe Kantor, owner of Akron Group.
Customs officials in some member states said that as a result of the sanctions, ships carrying approved fertilizers linked to the Russian oligarch could not transit through their ports because the facilities could not accept payment for port fees and other costs or Cannot allow payments to companies affiliated with companies. For the oligarchs whose EU assets were frozen. Some ships transited but were held back for weeks due to the need to obtain clearance from national authorities, who themselves were unsure of the embargo rules.
Under Thursday's deal, after days of arguments within the 27-nation bloc, it was agreed that national governments could unfreeze assets when strictly necessary for shipments of fertilizers. Exemptions must be reported to the European Commission, the EU's executive body, to ensure that they are properly implemented.
To prevent breaches of the sanctions, the exemption would only apply to people or entities linked to a significant Russian agrifood business that was active in the region before it was approved. The shipment must be part of a United Nations program shipment or a U.N. Should go to a developing country covered by the U.S.'s food-security priorities.
The exemption was contested by Poland and Lithuania, which strongly opposed the weakening of the sanctions regime and believed that a widespread loosening of restrictions could allow Russian authorities to circumvent EU sanctions. He was staunchly opposed to suggestions of direct exemptions to specific Russian oligarchs.
On the other hand, EU member states with major ports were concerned that the exemption would not be strong enough or clear enough to ensure that ships carrying fertilizer and food would be able to come and go freely. At least one member state held last-minute calls with customs officials on Thursday evening to ensure the proposed rules would allow transit.
Those involved in the talks say the waiver should significantly improve the transit of fertilizers through the bloc, though they acknowledge difficulties may remain. One potential challenge: identifying which countries are part of the U.N.
The war in Ukraine happened when the world was in the grip of a fertilizer crisis. According to the World Food Programme, fertilizer prices have almost doubled since May 2020. Global production of corn, rice, soybeans and wheat is expected to decline by 2.4% this year due to fertilizer shortages, according to Grow Intelligence, a New York-based analytics platform cited by WFP.
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