NewsWorldUkraine-Russia war, EU divided over gas payment in rubles

Ukraine-Russia war, EU divided over gas payment in rubles

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Ukrainian war, the European Commission is divided, following national fault lines, on the question of paying for gas supplies from Russia in the manner decided at the behest of Vladimir Putin, who imposed by decree on European companies that buy methane from Gazprom to open a ruble-denominated account with Gazprombank, the bank of the colossus led by Aleksey Miller who is the direct heir to the Soviet Union’s Gas Ministry. Read also Today the Dutch executive vice president Frans Timmermans and the Italian commissioner for the economy, Paolo Gentiloni, provided two apparently different, if not opposite, readings of Eni’s (and other Gazprom’s client companies) decision to to align itself, as a precaution and reserving the right to resort in the appropriate places in the face of a unilateral modification of the contractual conditions, to the methods imposed by Moscow to pay gas to Gazprom. The Italian company is not the only one to have acted in this way: also others European companies have done so, to avoid jeopardizing gas supplies. With a sudden stop of Russian methane, according to what the Commission itself has predicted, Europe would certainly end up in recession and inflation, already very high, would rise above 9% in 2022. In fact, yesterday Eni announced that it will open an account denominated in rubles, as requested by the Russian authorities, however clarifying that the invoices show prices in euros, that the exchange risk is not borne by him and that the payment of the gas is considered concluded at the moment of the payment in the community currency. what the spokespersons of the Commission have said several times, and what Timmermans has said, the mere opening of a ruble account would seem to constitute a violation of the sanctions. “I want to be very, very clear about this: paying for gas in rubles violates EU sanctions, it is very simple”, the Dutch Labor member screamed, questioned on the decision of many EU companies, including Eni, to adapt as a precaution to the requests The number two of the Commission added that the payment in rubles constitutes “in any case a violation of contracts, in which the currency in which the consideration must be paid is clearly indicated. It is clear in the contracts: it says euros or dollars. , never rubles. Thus, simply “paying for supplies in Russian currency” is not in line with the contracts and is not in line with the sanctions regime “adopted by the EU against Moscow for the war in Ukraine. they are not that simple: does it suffice to open a second account in rubles to affirm that the payment is made in rubles? Gentiloni, who is the Commissioner for the Economy and who was President of the Council (he is the only former Prime Minister of the Commission together with the Latvian Valdis Dombrovskis), gave a different answer from that of his colleague, a socialist like him. “As we know – he said – almost all contracts” for the purchase of natural gas from Russia “are denominated in euros or dollars. The payments of European companies are made according to these contracts and are made in euros and dollars. . And that does not constitute a violation of the sanctions. “” If they asked me ‘they are paying in rubles: is this a violation?’ – continued Gentiloni – of course the answer would be different. But this is not what is happening with the European companies. And I think, as far as I know, that the way of paying is quite similar, perhaps identical, between the different energy companies “. The point seems to be a question for business lawyers, namely when is the moment in which the payment is considered completed, and therefore whether or not the mere opening of a ruble account with Gazprombank, imposed by the Russian authorities, is enough to set up a payment in rubles, ergo a violation of the sanctions. Eni, which acts in agreement with the Italian government, believes that this is not the case, and it is not the only one, given that other European companies are adapting to the decree wanted by the Kremlin. Part of the Commission, starting with Chief Spokesman Eric Mamer (presumed to express the position of the president) and the executive vice president, appear to be of different opinion. Energy Commissioner Kadri Simson left the press conference prematurely today and there was no way to question her on the point. Russian decree, by virtue of a “unilateral amendment claim” of the existing contracts of Gazprom Export. First of all, Eni recalls that it has “rejected these changes for some time”. Therefore, the opening of the accounts takes place “on a temporary basis” and “without prejudice to any contractual rights of the company”, which provide for “the fulfillment of the obligation to pay against the payment in euros. This express reserve – underlines Eni – will accompany also the execution of the relative payments “. The decision, specified the group, was” shared with the Italian institutions “and was taken” in compliance with the current international sanctions framework “. A discussion is also underway with Gazprom Export “to expressly confirm the allocation to Gazprom Export itself of any costs or risks connected with the different execution of payments”. Therefore, the exchange risk is not borne by the buyer. Gazprom Export and the competent Russian authorities have confirmed, among other things, that “the invoicing (actually received by Eni in the last few days in the contractually correct currency) and the related payment by Eni they will continue to be executed in euros, as contractually envisaged “. Therefore, according to Eni, the payment is made in euros, not in rubles. Gazprom and the Russian authorities have also confirmed that “the operational activities of converting the currency from euros to rubles will be carried out by a clearing agent operating at the Moscow Stock Exchange within 48 hours from crediting and without involvement of the Russian Central Bank “. Furthermore, “in the event of technical delays or inability to complete the conversion on time, there will be no impact on supplies”. For the San Donato Milanese group, the procedure appears “neutral in terms of costs and risks” and “not incompatible with the sanctioning framework in force “. Eni, however, “in the absence of future complete, exhaustive and contractually justified answers from Gazprom Export, will initiate an international arbitration on the basis of Swedish law (as required by the existing contracts) to resolve the doubts regarding the contractual changes required by the new payment procedure and the correct allocation of costs and risks “. In any case,” Eni firmly reiterates that it will comply with any future regulatory measures that may intervene to sanction gas trading or current counterparties “. For the company, therefore, which is not alone, these payment methods do not violate EU sanctions. Prime Minister Mario Draghi also held the same line, speaking of a “gray area”, in which the EU sanctioning framework is not violated. The point, explains Simone Tagliapietra, senior fellow of the Brussels think tank Bruegel to AdnKronos, is that “paradoxically”, Gentiloni and Timmermans “say the same thing, even if it may appear contradictory. And it appears so – he continues – because currently we are still in a gray area, where it is not clear whether there will be repercussions for those companies that, while paying in euros / dollars, they open an account in rubles. The European Commission is expected to clarify this front soon, with a clear and decisive position “. The multilateral ‘chicken game’ on gas initiated by Vladimir Putin therefore continues, between Brussels, Moscow and the many EU capitals. Meanwhile, the sixth package of sanctions, which provides for a gradual embargo on oil imports from Russia, remains on hold, blocked by Viktor Orban’s Hungary veto, more than two weeks after Ursula von der Leyen announced her pending approval.

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