Financial Scheme for Grain Supplies between Russia and Saudi Arabia Discussed at the FBA EAC Platform
A collaborative meeting on the advancement of agro-industrial partnership between Russia and the Kingdom of Saudi Arabia was convened in Moscow at the premises of Financial and Business Association of Euro-Asian Cooperation, under the direction of Alexander Biryukov, head of the Association's representative office in West Africa and Mauritania. The session was chaired by Alexey Kazartsev, head of the FBA EAC International Banking Committee, and focused on enhancing cooperation in the agro-industrial sector, with particular emphasis on the formulation of a specific project for barley supply. Participants included representatives from the Kingdom of Saudi Arabia, namely Jihad Alsharaoune and Khaled Shumaimiri, as well as Vladimir Dubinkin, a member of the Board of Directors of the Russian-African Commonwealth Foundation.
The primary objective of the meeting was the comprehensive development of a reliable financial framework for the barley supply agreement. The proposed model stipulates a prepayment to Russian farmers in April, followed by the delivery of the grain crop in June and July. For the successful implementation of this scheme, Saudi investors require clear assurances and transparent settlement mechanisms.
During the session, experts conducted an in-depth analysis of various financial models, including cross-border settlements through intermediary banks, and deliberated on the use of bank guarantees to secure obligations. Each model was assessed in terms of its compliance with regulatory requirements of both nations, its capacity to mitigate sanctions risks, and its potential for tax efficiency.
As a result of the discussions, the participants agreed upon specific action items for the forthcoming weeks, which include refining the business model details, negotiating with prospective partner banks, and conducting a thorough review of taxation aspects.
The meeting underscored the mutual interest of the parties in expanding agricultural exports. The resolution of complex financial issues on the neutral ground of the FBA EAC platform represents a tangible step towards the realization of the project. The Association continues to discharge its mandate by providing international business representatives with a conducive environment for constructive dialogue and the formulation of concrete solutions in the realm of economic cooperation.