Europe is still confused about how to pay its Russian gas bills
The confusion centers on the logistics of the payments themselves. Several European gas buyers have been preparing to work around the Kremlin’s demand that gas bills be paid in rubles, rather than the euros or dollars stipulated in contracts.
According to Russia’s new payment mechanism, buyers in “unfriendly” countries must open two accounts at Gazprombank — one in euros and the second in rubles, from which payments for the gas would be made.
But on Tuesday, the European Commission said companies opening an account in Russia’s Gazprombank to allow their payments to be converted into rubles would fall foul of EU sanctions.
That statement appeared to contradict guidance the Commission gave just four days earlier, which led some of Europe’s biggest energy companies to assume they could get around the currency issue by opening two accounts with the Russian bank.
It comes as several large European companies are attempting to pay their bills on time without violating sanctions.
“Anything that goes beyond opening an account in the currency of the contract with Gazprombank and making a payment to that account, and then issuing a statement saying that… you have finalized the payment, contravenes the sanctions,” Eric Mamer, the Commission’s chief spokesperson, said at a press briefing.
Since then, European gas distributors, national governments and EU officials have been scrambling to avoid a wider interruption in supplies, while upholding sanctions imposed on Moscow over the invasion of Ukraine.
Last month, the European Commission said it “appear[ed] possible” for the new payment mechanism to work. On Friday, it said that so long as buyers pay in euros and dollars, and make a “clear statement” that they have done so, they will not breach EU sanctions.
“[Buyer’s should] consider their contractual obligations regarding the payment already fulfilled by paying in euros or dollars,” the commission said in a guidance note to EU member states, and shared with CNN Business.
Europe’s companies try to pay
Friday’s guidance has spurred some of Europe’s big energy companies to put new arrangements in place, with payment deadlines looming this month.
Italy’s ENI said Tuesday that it had started the process of opening two accounts with Gazprombank, one in euros and another in rubles. It said that, once it makes its deposits in euros, an agent at the Moscow Stock Exchange would convert the funds into rubles within 48 hours.
The company said in a press release that the new process was “not incompatible with existing sanctions” and would not, at the moment, face any European regulation to try to stop it.
“We are prepared for payment in euros and have opened a corresponding account,” a company spokesperson said. “We are therefore acting in accordance with European and German regulation.”
“We have today line of sight for a solution that will allow us to pay using the currency for the contract, which seems to be acceptable for Gazprom and which is in compliance with the EU sanctions at least to our understanding,” CEO Catherine MacGregor told reporters on a call.
MacGregor said Engie’s next gas payments were imminent, but did not say whether it had opened, or intended to open, an account with Gazprombank.
German gas distributor Uniper said last month it would continue to pay for its Russian supplies in euros but added that it believed a “payment conversion compliant with sanctions law” was possible.
Not everyone agrees, however.
Finland’s state-owned gas company Gasum said on Tuesday that it “does not accept” Gazprom’s payment terms, and was preparing for its gas deliveries from Russia to be cut off.
— Robert North contributed reporting.
Quoted from Various Sources
Published for: Ipodifier