In an updated guidance on the matter reviewed by Reuters, the European Commission described how EU companies can pay for Russian gas without violating the bloc’s sanctions against Russia.
After Russia insisted that international buyers start paying for gas in roubles or face losing their supply, the Commission notified countries last month that European corporations might be able to pay for Russian gas provided certain requirements were met.
The Commission confirmed its previous advice that EU sanctions do not prevent companies from opening an account at a designated bank, and companies can pay for Russian gas – as long as they do so in the currency agreed in their existing contracts and declare the transaction completed when that currency is paid – in updated guidance shared with EU countries on Friday.
Almost all supply contracts between EU companies and Russian gas giant Gazprom are in euros or dollars.
Last month, Russia suspended gas supplies to Poland and Bulgaria for failing to meet its rouble payment demand. Several EU countries and large importers have asked Brussels for clarification on whether they can continue to buy gas, which heats homes, generates electricity, and powers companies across Europe.
According to the guidance, companies should issue a ‘clear declaration’ stating that when they pay euros or dollars, they consider their responsibilities under current contracts to be met.
It should be clear that ‘such payments in that currency discharge definitively the economic operator from the payment obligations under such contracts, without any additional actions on their part regarding the payment,’ according to the statement.
By terminating its commitments after depositing euros or dollars, a corporation can avoid dealing with the Russian central bank, which is subject to sanctions and could have been involved in changing the euros to roubles.
According to President Vladimir Putin’s edict, a transaction would be considered complete only when the foreign money was changed to roubles.
‘Our fundamental position has not altered. The payment mechanism outlined in the Russian Decree of March 31 would violate EU sanctions, although there are possibilities for EU enterprises to continue paying in euros or dollars in accordance with the agreed-upon contracts,’ according to a Commission spokesperson.
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