Commission clarifies how companies can legally pay for Russian gas

The European Commission has explained how EU companies can pay for Russian gas without violating coalition sanctions against Russia, with an updated directive on the subject seen by Reuters.

Last month, the Commission told countries that European companies would be able to pay for Russian gas, but only if certain conditions were met, after Russia asked foreign buyers to start paying for gas in rubles because otherwise there is a risk that lose their supplies.

In an updated directive released Friday in the EU, the Commission reaffirmed its previous directive that EU sanctions do not prevent companies from opening a bank account and that companies can pay for Russian gas. – if they pay in the currency agreed in their existing contracts and declare the transaction completed when that currency is paid.

Almost all the supply contracts that EU companies have signed with the Russian giant gas company Gazprom are in euros or dollars.

Russia cut off gas supplies to Poland and Bulgaria last month after the two countries refused to comply with its demand for ruble payments. EU governments and major importers have called for more clarity from Brussels on whether they can continue to buy gas, which heats homes, generates electricity and supplies factories across Europe.

Companies should make a “clear statement” stating that when they pay in euros or dollars, they consider that they have fulfilled their obligations under existing contracts, the directive states.

It should be understood that “such paid in this currency permanently relieves the company of payment obligations under these contracts, without any further action on their part in terms of payment”, it is added.

By completing its obligations once it has deposited euros or dollars, a company can avoid engaging in transactions with the Russian central bank, which has been sanctioned and which could be involved in converting euros into rubles.

The decree of President Vladimir Putin states that a transaction will be considered complete only after the conversion of foreign currency into rubles.

“Our fundamental position remains the same. The payment process provided for in the Russian Decree of 31 March would violate EU sanctions, but there are options available for EU companies to continue to pay in euros or dollars as provided. from the agreed contracts “, said a representative of the Commission.

SOURCE: AMPE