EU warns against opening ruble accounts to pay for Russian gas

The EU has just published updated guidelines on how companies can legally continue to buy Russian fuel in light of the fact that since the end of March Russia has been asking customers buying gas abroad to pay in rubles or with credit. risk of loss of supply.

In updated guidance, shared with EU countries over the weekend, the EC confirms the orders punish Russia The EU does not prevent companies from opening an account at a designated bank.

Companies can pay for Russian gas – as long as paying in the currency agreed to in existing contracts and declaring the transaction complete when that currency is paid.

Nearly all existing EU companies’ supply contracts with Russian gas group Gazprom are denominated in euros or dollars, Reuters noted.

However, a spokesman for the European Commission said on May 17 that opening an account in Russian rubles at Gazprombank would violate EU sanctions.

“It goes beyond the instructions that we give to member states as to what is permissible under current governance practices,” an EC spokesperson told a regular news conference.

According to Reuters, there is confusion as customers buying Russian gas in Europe struggle to settle payment problems and seem to have different views on payment options.

Finnish energy supplier Gasum announced on May 17 that it would not pay under Gazprom’s proposed payment arrangement. Gasum will also refer disputes over payments in rubles to arbitration.

“In this situation, Gasum has no choice but to refer the contract to arbitration. In this challenging situation, we will do our best to be able to provide the necessary energy to the Finnish customer. Lan” – Gasum CEO Mika Wiljanen stated in the statement.

Meanwhile, French power company Engie said it would make the next payment to the group Russian gas in euros before the end of May as both companies have agreed on a solution in line with European sanctions.

On the same day, Uniper, Germany’s largest Russian gas importer, confirmed that it was transferring euros to an account at Gazprombank. Germany’s RWE has opened an account in Russia for gas payments in euros.

Italy’s Eni is expected to make a decision on the payment of Russian gas in the next few hours or days.

EU countries are responsible for implementing sanctions against Russia, which were unanimously approved by 27 member states. Brussels could launch legal action against governments that fail to enforce those sanctions.

The decree of Russian President Vladimir Putin notes that a transaction will be considered complete only after the foreign currency is converted to ruble and companies will need 2 bank accounts to make this happen – each account is a currency.

Russia cut off gas to Bulgaria and Poland last month after those countries refused to comply with demands for payment in rubles.

The European Commission’s guidance recommends that companies make a “clear statement” that, when paying in euros or USD, they consider their obligations under applicable contracts to be complete.

By terminating its obligations after paying in euros or USD, the company can avoid dealing with the central bank. Russia – the bank is being punished.