Russia is reportedly unlikely to extend the Black Sea Grain Initiative, following negotiations in May to extend the deal past July 18th, which is the current deadline for all parties to either extend or collapse the deal.  The Black Sea Grain Initiative was initially brokered by the United Nations and Turkey between Russia and Ukraine in an attempt to mitigate the global food crisis catalyzed by the Russian invasion of Ukraine. This deal also guaranteed the safe passage of food exports departing from Ukrainian ports.

Ukrainian officials cite a new ammonia terminal in Russia’s Taman Peninsula, which is expected to be completed by the end of 2023 and is anticipated to replace the Russia-Odesa pipeline that has been inactive since 2022. This development has led Ukrainian officials to believe that Russia will force the collapse of the Black Sea Grain Initiative because Russia will no longer need Ukraine’s ports to export ammonia, upon the opening of its new ammonia terminal.

The Russian government claims financial sanctions are impeding exporters’ ability to receive payment for their goods. However, the Ukraine-coalition economies, such as those mentioned previously, have not sanctioned food nor most fertilizer exports following the invasion of Ukraine. The USDA Foreign Agricultural Service predicts that Russian wheat exports may exceed 45 million tons in the 2022-2023 reporting year, which is a dramatic increase of 36% since the previous year. These increases in production can be attributed to favorable weather conditions, increased planting area for most crops, and better funding for agricultural producers.

This report also points out that the very trade barriers Russia alleges to face, comes directly from the Russian government itself. “Export volumes could be even larger, but the Russian government continues to apply export taxes and quotas, trade-restricting measures that are self-imposed,” per the report.

Russian fertilizer also saw increased exports in 2022; One source reports that Russia urea exports rose 12% in 2022 while phosphate-based fertilizers, diammonium and monoammonium phosphate rose 9%. The only Russian export that saw decreases was the potassium-based fertilizer muriate of potash, and this decrease can be attributed to the fall of a pipeline connecting Russia to the Ukrainian port of Pivdennyi on the Black Sea, which remains closed.  

The collapse of this deal could lead to devastating consequences worldwide. Several Sub-Saharan African and Middle Eastern nations are highly reliant on Ukrainian grain imports for their food security and source more than 90% of their wheat imports from the Black Sea region.

Keeping as many pathways open for moving grain is critical,” the U.S. Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs Alexis Taylor said. “Russia continues to really weaponize food in this war and really impacts some of our most vulnerable on the planet.”

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Photo of Dj Wolff Dj Wolff

David (Dj) Wolff is the co-chair of Crowell & Moring’s International Trade Group and a director with Crowell Global Advisors, the firm’s trade policy affiliate.

At Crowell & Moring, he serves on the steering committee for the International Trade Group, where his practice

David (Dj) Wolff is the co-chair of Crowell & Moring’s International Trade Group and a director with Crowell Global Advisors, the firm’s trade policy affiliate.

At Crowell & Moring, he serves on the steering committee for the International Trade Group, where his practice focuses on all aspects of compliance with U.S. economic sanctions, including day-to-day compliance guidance, developing compliance programs, responding to government inquiries, conducting internal investigations, and representation during civil and criminal enforcement proceedings. Dj works regularly with non-U.S. clients, both in Europe and Asia, to evaluate the jurisdictional reach of U.S. sanction authorities to their global operations, identify and manage the potential conflict of laws that can result from that reach, as well as to support client’s design, implementation, and evaluation of a corresponding risk-based sanctions compliance program. Dj also regularly leads teams in diligence efforts on trade and related regulatory areas on behalf of his U.S. and non-U.S. clients in the M&A arena, having successfully closed more than 30 deals with an aggregate valuation of several billion dollars over the last 18 months.

Dj is ranked by Chambers USA in International Trade: Export Controls & Economic Sanctions. He has previously been recognized by Law360 as a Rising Star in International Trade (2020), by The National Law Journal as a “DC Rising Star” (2019), by Who’s Who Legal: Investigations as a “Future Leader” (2018 and 2019), Acritas Star as an Acritas Stars Independently Rated Lawyers (2019), by Global Investigations Review as one of the “40 under 40” in Investigations internationally (2017), and WorldECR as one of the five finalists for the WorldECR Young Practitioner of the Year award (2016).

Photo of Jeremy Iloulian Jeremy Iloulian

Recognized as a “Rising Star” in International Trade by Super Lawyers, Jeremy Iloulian advises clients globally on complex cross-border regulatory, compliance, investigative, and transactional matters and policy developments that touch U.S. national security, international trade, and foreign investment, including those relating to

Recognized as a “Rising Star” in International Trade by Super Lawyers, Jeremy Iloulian advises clients globally on complex cross-border regulatory, compliance, investigative, and transactional matters and policy developments that touch U.S. national security, international trade, and foreign investment, including those relating to U.S. export controls (EAR and ITAR), economic sanctions, anti-boycott laws, the Committee on Foreign Investment in the United States (CFIUS), and various national security controls on fundamental research and supply chains.

Jeremy has extensive experience counseling U.S. and non-U.S. clients, including public and private companies, private equity sponsors, and nonprofits spanning a multitude of industries, including aerospace and defense, energy, entertainment, fashion, food and beverage, health care, infrastructure, technology, telecommunications, and transportation. He provides strategic guidance on managing risks for dealings in high-risk jurisdictions such as China, Russia, Venezuela, and the Middle East, among other countries and regions. He regularly advocates on behalf of such clients before the U.S. Bureau of Industry and Security (BIS), Directorate of Defense Trade Controls (DDTC), Office of Foreign Assets Control (OFAC), Bureau of Economic Affairs (BEA), Census Bureau, Department of Energy, and Nuclear Regulatory Commission (NRC).

Additionally, Jeremy has previously counseled on, presented on, and published research related to international environmental law, specifically the United Nations Convention on the Law of the Sea (UNCLOS) and Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).

Prior to and during law school, Jeremy interned at multiple government agencies, including the United Nations, the U.S. State Department, and the Iraqi Embassy in Washington, D.C.

Photo of Emily Devereaux Emily Devereaux

Emily Devereaux is a senior international trade analyst I in Crowell & Moring’s Washington, D.C. office. She provides practice support to the International Trade Group on import regulatory matters pending before the Office of the U.S. Trade Representative (USTR) and U.S. Customs and

Emily Devereaux is a senior international trade analyst I in Crowell & Moring’s Washington, D.C. office. She provides practice support to the International Trade Group on import regulatory matters pending before the Office of the U.S. Trade Representative (USTR) and U.S. Customs and Border Protection (CBP). She works closely with attorneys developing courses of action for clients impacted by investigations under Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962. She also supports unfair trade investigations, including antidumping (AD) and countervailing duty (CVD) investigations, sunset reviews, and changed circumstance reviews before the Department of Commerce and the International Trade Commission (ITC).