The European Commission cautioned Russian gas purchasers on Thursday that converting payments into roubles might violate sanctions, as officials attempted to clarify the EU’s position on Moscow’s payment mechanism, which has caused consternation in the bloc.
On Wednesday, Russian gas giant Gazprom halted supplies to Poland and Bulgaria after they refused to pay in roubles for gas, marking Moscow’s harshest retaliation yet to Western sanctions over the Ukraine conflict.
The escalation comes after Russian President Vladimir Putin signed an order last month requiring ‘unfriendly’ countries to pay for gas in roubles under a new payment structure.
Buyers are required to put euros or dollars into a Gazprombank account, which must then convert the funds into roubles, deposit the earnings in another foreign buyer’s account, and transmit the payment in Russian currency to Gazprom.
Energy ministers from across the European Union will gather on Monday to examine the matter, which has divided member states about whether sanctions would be broken if they adopted Russia’s scheme.
A senior EU official stated at a press conference on Thursday that sanctions would be respected if EU customers declared their purchases for gas were finished once the payment was made in euros and before it was changed into roubles.
The problem for European customers is that the law compels them to register a rouble account with Gazprombank, where their euro or dollar payments will be deposited after conversion into Russian currency.
According to Russia’s order, the payment would only be considered complete if the gas-to-roubles conversion is completed, a process that will include Russia’s central bank, which is subject to EU sanctions.
‘What we cannot accept is that companies are required to open a second account, and that the amount in euros is in the full control of the Russian authorities and the Russian Central Bank between the first and second accounts, and that the payment is only complete when it is converted into roubles,’ a senior EU official said.
‘This is an egregious violation of the sanctions.’
The official warned that even opening a roubles account with Gazprombank could violate EU sanctions, albeit he did not provide a definite opinion.
The comments on Thursday came in response to a request for clearer advice on the subject from EU country ambassadors on Wednesday.
Poland and Bulgaria stated the Commission’s guidance was confused during the discussion, while nations like Denmark, Finland, Greece, Slovakia, and Spain indicated greater clarity was needed, according to EU sources.
Post Your Comments