EU Rejects Russia's Call for Sanctions Relief, Demands Unconditional Troop Withdrawal

The European Union firmly rejected the Kremlin’s insistence that the Russian Agricultural Bank, also called Rosselkhozbank, along with other financial institutions engaged in agricultural trade, should be reinstated to SWIFT as part of a condition to stop attacks in the Black Sea region and secure safe passage. The EU maintains that the ongoing invasion of Ukraine prevents them from providing any form of sanction relief, whether comprehensive or specific.

The surprising demand was made public earlier this week after technical talks between Russia and the United States in Saudi Arabia meant to introduce a partial ceasefire in Ukraine, which has still not entered into force.

A representative from the European Commission stated on Thursday that one of the key prerequisites for modifying or removing sanctions would be the conclusion of Russia’s baseless and unwarranted assault on Ukraine, along with a complete and unconditional pullout of all Russian troops from Ukrainian soil,

The spokesperson also stated, “It is essential for Russia to exhibit real political commitment to cease its unlawful and baseless invasion.” They further emphasized, “All potential peace agreements or talks should result in a fair and enduring cessation of hostilities within Ukraine.”

The EU’s present objective is to intensify, not reduce, the pressure on Russia, as the official clarified, adding, “This is precisely why we’re utilizing every tool available.”

SWIFT is a secure platform designed for swift and precise financial transactions, linking over 11,000 entities spanning more than 200 nations. Headquartered in La Hulpe, Belgium, this system operates within the purview of EU law and consequently adheres to European Union sanctions regulations.

During the initial year of the conflict, several Russian banks, such as Rosselkhozbank, were removed from SWIFT to restrict Moscow’s capacity to fund its military operations.

Although Russia operates an alternative financial system, called SPFS, the exclusion from SWIFT has been a sore point for the country as it has created significant obstacles in the payments between Russia's agri-food firms and their clients worldwide.

Rosselkhozbank's desired return to SWIFT was only included in the Kremlin's read-out, which had five paragraphs detailing pre-conditions to restart the Black Sea Initiative.

The White House’s statement merely mentioned facilitating “the restoration of Russia’s ability to participate in global markets for agricultural products and fertilizers, reducing maritime insurance expenses, and improving access to ports and transactional payment systems.”

The last part – "payment systems for such transactions" – appeared to refer to SWIFT, even if the US lacks authority over the system.

In an interview With Fox News, U.S. Treasury Secretary Scott Bessent stated that “all options are being considered,” but he also pointed out that Moscow’s preliminary conditions were “untimely.”

"Whether the sanctions increase or decrease will depend on Russia’s next actions as decided by their leaders. In my opinion, President Trump won’t shy away from escalating these sanctions if doing so provides him with an advantageous position for negotiations," Bessent stated.

"There will be extensive discussions regarding numerous aspects concerning the appropriate method to reintegrate Russia into the global community. However, I believe it’s too early to debate the specifics of an agreement before we actually have one," he noted.

Speaking in Jamaica, US Secretary of State Marco Rubio said the Russian demand for targeted relief and the EU's role in the process would be examined.

"We're going to evaluate that. Some of those conditions include sanctions that are not ours. They belong to the European Union," Rubio said, warning that striking a peace deal would not be "simple" and take "some time".

'A strategic mistake'

The comments made by U.S. officials sharply differ from those of their European Union peers. There is minimal enthusiasm within the union for easing sanctions, particularly as Russian attacks persistently cause devastation throughout Ukraine and result in civilian casualties.

The sanctions framework has been established through an unprecedented 16 rounds of measures. Dismantling this intricate construct with a simple signature will not occur easily in Brussels.

On Thursday, another Commission spokesperson noted that we frequently encounter Russian attempts to downplay the effects of our sanctions and other measures on their economy. It’s peculiar that they are pushing for us to ease these pressures.

Following a gathering of the coalition of the willing in Paris, French President Emmanuel Macron firmly dismissed any possibility of easing sanctions. He stated unequivocally on Thursday, “We all concurred that this is not an appropriate moment to consider sanction relief in any form. Sanctions cannot be lifted until peace has been achieved.”

German Chancellor Olaf Scholz stated that it would be entirely meaningless to do so prior to the conclusion of the war. "Regrettably, we remain quite far from achieving this," Scholz commented.

President Volodymyr Zelenskyy, who was present at the meeting, implored his Western counterparts to disregard Vladimir Putin's demands and intensify economic pressure on Russia instead.

"Sanctions should not be lifted in any form until Russia ceases this war. Additionally, I believe more pressure is necessary, along with further rounds of sanctions," stated Zelenskyy.

A European Union representative also voiced support for this stance, cautioning that succumbing to the urge for premature easing of economic penalties would be "a significant error in strategy."

However, this firm stance masks underlying weakness.

According to EU regulations, sanctions must be renewed every six months with unanimous agreement, which implies that a single member country can disrupt this intricate procedure. Following President Trump’s inauguration, Hungary, a longstanding opponent of these measures, has twice issued threats. block the rollover .

Should Washington ultimately consent to the SWIFT requirement, Hungary might take a firm stance and compel the other member nations to provide partial sanction relief as a precondition for extending the measures past the upcoming deadline of July 31st.

Instead, the United States might convey messages indicating that Russian dollar transactions processed via the system would not be subject to legal repercussions. Nonetheless, complete reinstatement into SWIFT would rely solely on EU consent, thereby providing the European Union significant influence over these discussions.

"SWIFT isn’t able to operate outside the bounds of EU legislation. While the US has the authority to change its statutes and rules, it doesn’t have the power to directly put Russian organizations back into the SWIFT system again," stated Alessandro Rebucci, an economics professor at the Johns Hopkins Carey Business School, to Euronews.

We are now witnessing the boundaries of America’s coercive influence. Coercion isn’t how the U.S. maintained global dominance until January 19, 2025," he noted, pointing out the day prior to Trump's swearing-in. "Instead, it was achieved via mutually beneficial alliances, talks with opponents, and assertive yet fundamentally constrained threats leveraging its substantial power.