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EU states seek clear advice on Russian gas demands
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EU states seek clear advice on Russian gas demands

28.04.2022 From our online archive
Moscow's added demand for gas payments in rubles seen as effort to divide EU
Polish Prime Minister Mateusz Morawiecki talked about Russia stopping gas deliveries outside a transmission point in Rembelszczyzna near Warsaw on Wednesday
Polish Prime Minister Mateusz Morawiecki talked about Russia stopping gas deliveries outside a transmission point in Rembelszczyzna near Warsaw on Wednesday
Photo credit: AFP

Several European Union nations are pushing for clearer guidance from the bloc on Russia’s demand to pay for gas in rubles, saying the current advice is too ambiguous.

The European Commission told the ambassadors at a closed-door meeting on Wednesday that it will fine-tune the wording of its guidelines, according to people familiar with the discussions. A number of countries who raised the issue want the commission to clarify that buyers don’t have any workarounds to acquiesce to the Kremlin’s demands, one of the people said.

The confusion comes after Russia cut off gas sales to Poland and Bulgaria, which refused to pay in rubles. At the same time, four European companies went ahead and made payments in rubles, although it’s not clear whether they were from EU countries. Others are prepared to open ruble accounts. 

Russian President Vladimir Putin’s decree stipulates that European gas buyers open two accounts with Gazprombank JSC -- one in a foreign currency and one in rubles. Gazprombank would then be responsible for converting the foreign currency into rubles and transferring the money to Gazprom. The EU said that Russia’s process for any exemptions remains unclear. 

In a question-and-answer document published last week, the EU said that the Kremlin’s payment procedure would be a breach of contract, as well as EU sanctions. But the bloc also said payments may be allowed in euros and dollars as long as any legal obligations end once the initial euro or dollar payment is made to Gazprombank.

European Commission President Ursula von der Leyen’s warning on Wednesday was more definitive.

“It’s very clear and the request from the Russian side to pay in rubles is a unilateral decision and not according to the contracts,” she told reporters. “Companies with such contracts should not accede to the Russian demands. This would be a breach of the sanctions so a high risk for the companies.”

It remains unclear whether Moscow would accept that transactions are complete after the initial payment is made in euros or dollars, even if the funds are then converted to rubles. Member states are expected to discuss the issue at an upcoming meeting of EU energy ministers, two of the people said. The EU has scheduled the meeting for May 2.

©2022 Bloomberg L.P.


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