EU and UK agree to pay for Russian gas in rubles, but with certain conditions

Previously, Russia issued a new decree requiring “unfriendly countries” to pay for Russian gas in rubles. “Unfriendly countries” include all countries that have imposed sanctions on Russia.

Currently, European companies can pay for Russian gas at Moscow’s request for payment in rubles, while not violating EU sanctions.

The scheme proposed by the European Commission sees companies transferring their payments in euros or USD to a bank account in Russia, where the currency will be converted into rubles. The Brussels memorandum says that the obligations of the European companies will be completed once the payment in rubles is deposited in a Russian bank. Therefore, they will not violate EU sanctions against Russia.

“EU companies can require their Russian counterpart to fulfill their contractual obligations in the same way as before the adoption of the decree, i.e. deposit the amount due in euros or USD,” the document states. referring to the Moscow decree to pay for gas in rubles.

In addition, the British Treasury also issued an interim document allowing British companies to transfer money to Gazprombank to pay for Russian gas – despite London’s imposition of sanctions on the company. national gas company. The sanctions waiver runs until May 31 and will allow British companies to meet new gas payment requirements issued by Russia in April 2022.

British authorities explain the waiver period as part of the EU’s plan to phase out energy imports from Russia.

Moscow issued a new decree in early April in response to Western sanctions, which required “unfriendly” countries to “pay for Russian gas in rubles”. Essentially, this new policy requires gas importers to deposit payments in euros and dollars into an account at Gazprombank. These funds will then be converted to rubles to complete the payments.

The Kremlin decree came as a response not only to anti-Russian sanctions but also to the decision of Western governments to illegally freeze assets of the Central Bank of Russia with foreign currency deposited in their home country. Moscow recently announced it would sue these governments and fight to free the funds.