Russian bank sues JPMorgan

The Russian Agricultural Bank, Rosselkhozbank, has filed a lawsuit against US financial services firm JPMorgan Chase in a Moscow court, according to an online Russian database of arbitration cases, local media reported on Wednesday.

It shows that the lawsuit was filed on November 20 and the court has yet to start processing it. However, the document provides no further details on the case.

Rosselkhozbank, Russia’s key agricultural lender, is the main financial intermediary for Russian food and fertilizer exports. Last year, the bank was targeted by Western sanctions and disconnected from the SWIFT international payment system.

Reconnecting Rosselkhozbank to SWIFT was one of Moscow’s main demands in unsuccessful negotiations over the Black Sea Grain Initiative, which was terminated by Russia in July. The agreement, which was brokered by the UN and Türkiye last year, was supposed to facilitate the delivery of Ukrainian grain to world markets amid the conflict between Moscow and Kiev. It was also expected to help lift Western sanctions that deterred Russia’s agricultural exports.

According to Reuters, in April 2023, the US gave JPMorgan permission to process payments for agricultural exports via Rosselkhozbank in accordance with the grain deal. The arrangement was supposed to be a substitute for reconnecting the bank to the SWIFT system. However, this cooperation also stopped in early August, after Moscow withdrew from the grain deal in July, according to the Russian Foreign Ministry.

“It was JPMorgan’s decision, and in fact, we had ... made clear to the Russians that if they could show signs they were returning to the deal, it would be much easier to keep this payment system alive,” the head of the US State Department’s Office of Sanctions Coordination, James O’Brien, told Reuters at the time.

JPMorgan made a “completely commercial decision based on business and reputational factors,” O’Brien claimed.

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